How To Create a Budget for Your First Apartment

BartekSzewczyk / Getty Images

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

Moving into your first apartment is an exciting milestone, but it also comes with a myriad of financial responsibilities. Creating a solid budget will help ensure that you can afford rent, utilities and other essential expenses without unnecessary stress.

Here’s a step-by-step guide to creating a budget for your first apartment.

Determine Your Total Monthly Income

Start by calculating your total monthly income after taxes. This includes your salary, freelance work, side gigs and any other reliable sources of income.

Knowing how much money you have to work with each month is crucial for setting a realistic budget.

Calculate Your Fixed Expenses

Fixed expenses are non-negotiable costs that remain relatively consistent each month. These typically include:

• Rent: Experts recommend spending no more than 30% of your income on rent.
• Renter’s Insurance: This protects your belongings and is often required by landlords.
• Transportation: These might include car payments, gas, public transit or ride-sharing costs.
• Loan Payments: Include student loans, credit cards and any other recurring debts.

Estimate Variable Expenses

Variable expenses fluctuate month to month and include:

• Utilities: Electricity, water, gas and internet costs vary, so research average rates in your area.
• Groceries: Consider how much you spend on food and meal prep.
• Dining Out: Budget for occasional takeout or restaurant visits.
• Entertainment: Include streaming services, concerts, movies and other fun activities.
• Health and Wellness: Gym memberships, medical co-pays and prescriptions would fall into this category.

Factor in One-Time and Emergency Costs

Unexpected expenses can arise, so it’s important to set aside money for:

• Security Deposit and Move-In Costs: Many landlords require first and last month’s rent upfront.
• Furniture and Household Items: Beds, couches, kitchen supplies and cleaning essentials add up quickly.
• Emergency Fund: Aim to save at least three to six months’ worth of living expenses.

Track Your Spending and Adjust as Needed

Once your budget is in place, track your expenses to ensure you’re staying within your limits. Use budgeting apps like Mint, YNAB or a simple spreadsheet to monitor your spending and make adjustments where necessary.

Look for Ways To Cut Costs

If your budget feels tight, consider these money-saving tips:

• Find a Roommate: Splitting rent and utilities can significantly reduce costs.
• Negotiate Bills: Call service providers to see if you can get lower rates on internet, phone or insurance.
• Use Public Transportation: Instead of owning a car, rely on public transit or biking to save money.
• Shop Smart: Look for second-hand furniture — thrifting is also better for the environment! — buy groceries in bulk and use coupons or cash-back apps.

Share This Article: