In the United States, there are more than 43 million renter-occupied households. So, although most people prefer to purchase their home and live in it, renting is still very common.
Most people rent because they aren’t financially ready to purchase a home. Others don’t want the commitment that homeownership brings or have plans to move somewhere else in the future.
No matter the reason you want to rent, saving money for a house can be a challenge, especially if you’ve never lived on your own. If you can relate, keep reading because we will share some budgeting tips and how to save for an apartment!
Start With a Realistic Budget
Before you start saving for your house or apartment, it’s important to have a goal in mind. And how much you need to set aside depends on how much your rent will be.
Of course, you may not know exactly how much you will pay for rent, especially if you have yet to find the perfect place. However, some simple calculations will tell you how to budget for a house.
Generally, you should spend less than 30 percent on rent. For example, if you make $2,500 each month, you should spend no more than $750 on housing. To have an idea of the cost of renting an apartment in a city, you can simply search online and look for their prices. If you’re planning to move to Berkeley, you can look for Berkeley apartments for rent and compare their prices. This way, you can set a budget on how much you should save based on the average price of their apartments.
Nevertheless, saving for an apartment isn’t just about the first month’s rent. You’ll also need to set aside some money for moving expenses, a deposit, and your utilities.
In addition to your moving expenses, you’ll need to build a cushion, so you have some money left over after the move. We recommend saving 20 percent of what you earn every month, which would be $500 if you make $2500/month.
Getting into this habit now will allow you to reach other financial goals in the future, such as purchasing a home.
If you feel like saving money for a house is impossible after seeing all the costs, don’t worry! There are plenty of ways to achieve your saving goal faster, such as:
- Canceling monthly subscriptions
- Eating out less
- Refinancing a high-interest car loan to get a better deal
- Switching to a cheaper cell phone plan
Of course, when you’re saving money, you also have to control your spending on unnecessary items such as clothes or entertainment.
Here is where budgeting comes in handy since you can track your habits and see where you are overspending. And, putting it all on paper makes it a lot easier to see how to save money in categories you may not have thought of, such as groceries.
And, if you want extra help, check out online budgeting tools or special accounts that help you save, such as payactiv.com.
You may not be able to save all the money you need to move out in one month, but little by little, you’ll get there. So, be reasonable with your expectations and see this as an opportunity to create sound spending habits.
Start Planning How to Save for an Apartment Today
Now that you have some useful advice on how to save for an apartment, it’s time to sit down and make some calculations. Then, once you have your savings goal in mind, make a budget and stick to it. If you do these things, you’ll find yourself in your new apartment in no time!
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