My First Apartment http://www.myfirstapartment.com Thu, 27 Apr 2017 19:14:32 +0000 en-US hourly 1 This is How Much You’ll Save in Rent by Living With Roommates in Top 25 Markets http://www.myfirstapartment.com/2017/04/how-much-can-you-save-in-rent-living-with-roommates/ http://www.myfirstapartment.com/2017/04/how-much-can-you-save-in-rent-living-with-roommates/#respond Thu, 27 Apr 2017 12:00:38 +0000 http://www.myfirstapartment.com/?p=23622 Our first apartment budgeting boot camp continues with a roommates edition. Today we show you how much you’ll save living with roommates vs. getting your own place. What do you save getting a 2BR with one roommate vs. a 3BR with two roommates?  Luckily for us, the real estate site Trulia.com has collected information about…

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Our first apartment budgeting boot camp continues with a roommates edition. Today we show you how much you’ll save living with roommates vs. getting your own place. What do you save getting a 2BR with one roommate vs. a 3BR with two roommates?  Luckily for us, the real estate site Trulia.com has collected information about the 25 top U.S. rental markets that helped us answer those two questions. See the market-by-market chart below.

In a nutshell, the average you’ll save living with one roommate in a 2BR apartment vs. living solo in 1BR is 37%, with a range from 31% to 40%, depending on market.  The average you’ll save if you get a 3BR apartment with two friends is 45%, with a range from 40% to 52%. If you want to remember the savings in rough numbers, think in terms of saving about third with one roommate and close to half with two, without having to share bedrooms.

Here’s another interesting nugget from the Trulia study, “An astonishing 60% of millennials in America now either live with parents, siblings, other relatives or roommates, also an 115-year high.” So, if you are still living with your parents don’t panic, you belong in the majority.

(Note: Trulia’s rent levels for New York City appear to be far too low across the board, but the percentage savings are probably in the ballpark. If you are heading to NYC, budget closer to San Francisco level rents.)

Example on how to read the chart:

  • If you rent a one bedroom apartment in Atlanta, it will cost you $1,300 a month in rent on an average.
  • If you rent a two bedroom in Atlanta and split it with one roommate, each will pay $805, or 38% less than living solo in one bedroom unit.
  • If you rent a three bedroom in Atlanta and split with two roommates, each will pay $658, or 49% savings over living solo in one bedroom unit.

Also check out this article in the New York Times that estimates what percentage of your pretax income goes towards rent in six selected markets.

Please share in the comments below how this chart compares to your actual experience.

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3 Keys to Finding the Right First Apartment http://www.myfirstapartment.com/2017/04/tips-finding-first-apartment/ http://www.myfirstapartment.com/2017/04/tips-finding-first-apartment/#respond Tue, 25 Apr 2017 12:00:55 +0000 http://www.myfirstapartment.com/?p=23474 You may have your eye on a brand new, state-of-the-art apartment building in the heart of a booming part of town, but as luck may have it, that apartment may not be the best apartment for you at this time. Before you sign a lease and commit to an apartment, there are three important items…

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You may have your eye on a brand new, state-of-the-art apartment building in the heart of a booming part of town, but as luck may have it, that apartment may not be the best apartment for you at this time. Before you sign a lease and commit to an apartment, there are three important items you must consider first: 1. Affordability, 2. Safety, and 3. Location. Here’s why these are the three most important considerations when finding the right first apartment for you.

  1. Affordability

Being able to afford rent is the key factor in apartment hunting. Just because you love an apartment doesn’t mean you can commit to it if you can’t afford the rent. Here’s why you must be able to afford the rent:

  • Many landlords require you earn a certain amount of money – typically three times the monthly rent – before you can even sign a lease, which helps ensure you pay your rent in full and on time.
  • If you can’t afford rent, you’ll only bring stress on yourself every time you worry about how you will pay your bills. You may also find yourself in a tight spot where you have to decide which bill to pay – rent or another important bill like groceries or insurance.
  • If you start missing payments because you can’t afford your bills, you run the risk of damaging your credit score, which takes a long time to build back up.  Lower credit score will end up costing you money in many ways in the future, for example, in higher car or other loan interest rates or higher insurance premiums. It may even impact on your ability to get a job you want.
  1. Safety

When choosing an apartment, you must first be able to afford it. Second, though, you must make sure the apartment is in a safe area. To ensure the apartment is safe, follow these tips:

  • Ride by the apartment at different times on different days to check out the neighborhood.
  • Notice the people in the area and how they interact with one another.
  • Notice whether you see police officers patrolling the area.
  • Notice the types of businesses in the area.
  • Check out crime reports for the area and see what types, if any, crime has been reported.
  • Google the address of any building you are considering, to see if any criminal or other type of concerning activity has been reported in the building.
  1. Location

We all know the saying that real estate is all about location, location, location. And the thing is this: finding the right apartment for you really focuses on location. Renting an apartment in a popular neighborhood might be ideal, but it may not be an option if you can’t afford the rent or the apartment’s waiting list is full. Consider these location tips:

  • Try looking in a neighborhood close to your favorite neighborhood, preferably within walking distance, so you can still enjoy the same amenities such as restaurants, coffee shops, and shops.
  • Try finding an apartment close to work to reduce your commute time and costs.
  • Try finding an apartment close to activities you plan to frequent.
  • Try finding an apartment close to family and friends.

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Buying Furniture: Where Do I Start? http://www.myfirstapartment.com/2017/04/buying-furniture-start/ http://www.myfirstapartment.com/2017/04/buying-furniture-start/#respond Sat, 22 Apr 2017 16:00:21 +0000 http://www.myfirstapartment.com/?p=23348 Honestly, buying furniture is usually the biggest expense when you are finding your first place. You essentially have nothing unless you find something on Craigslist or if your parents have a whole apartment set lying around their attic. You start from square one. It is crucial to take your budget into consideration and know that…

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Honestly, buying furniture is usually the biggest expense when you are finding your first place. You essentially have nothing unless you find something on Craigslist or if your parents have a whole apartment set lying around their attic. You start from square one. It is crucial to take your budget into consideration and know that you don’t have to buy it all at once. Of course, it would be comforting to have a fully furnished apartment right away but what fun would that be? Here are some tips and sites that I used for my furniture hunt.

Tips:

  • Order your mattress ahead of time so that it is delivered within days of your move-in and so you can kiss that air mattress goodbye!
  • Stay within your budget
  • Shop around! Don’t be pressured to buy that one item on that specific site. You might find it somewhere else for even cheaper!
  • Always check online for coupons and discounts before heading to the store or ordering online.
  • Think what items friends or family could give you, so that you don’t have to purchase those items? Maybe a relative has an old table or couch that they want to get rid of. Always use your family network – it can be a great resource.
  • Find furniture that can work in your current apartment and future apartments.
  • Don’t rush. Seriously.

Helpful Sites + Places:

  1. Target – Always reliable and their items are affordable. You have options to shop online and in store. Magic!
  2. Wayfair.com – Finally got into this site and they have some amazing pieces for a reasonable price. In addition, they deliver in a timely manner. From my experience, their furniture pieces have been easy to put together, as well.
  3. IKEA – Affordable and dynamic pieces, great for a first apartment!
  4. Raymour & Flanigan – Some of their items may be pricey but if you want more sturdy and reliable furniture, this could be your most affordable route.
  5. Pier 1 – Once again, it is on the pricy side but they have some unique pieces and their store also carries decorative items, such as wall art and curtains.  And plenty of  wine glasses that you probably don’t need but want anyways.
  6. Urban Outfitters – Surprisingly they have an apartment section hidden on their site. It includes bedding, furniture, decor, and storage. Really unique items but can be on the expensive side!
  7. Your Local Goodwill and Other Thrift Stores – Some of these sites have furniture that others have donated. If you look carefully enough, you may find a hidden gem of a coffee table or nightstand!
  8. Local Flea Markets – Once again, you never know when you’ll find a gem. Sometimes it’s hit or miss but there’s no harm in looking
  9. Consignment Stores – Same situation, but there is no harm in looking!

Photo Credit: Target

 

Photo Credit: Urban Outfitters

 

Photo: Housing Works Thrift Shop in NYC

As I said before, don’t rush. Take your time and find items that you truly love and that can be adaptable in any apartment. You want to make a good investment in the furniture you buy. Sometimes it may be worth to spend that extra dollar so that you can avoid buying the same piece twice within 2 years. Now go and get furniture happy (within your budget of course!)…

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First Apartment Budgeting Boot Camp: Couples http://www.myfirstapartment.com/2017/04/first-apartment-budgeting-boot-camp-couples/ http://www.myfirstapartment.com/2017/04/first-apartment-budgeting-boot-camp-couples/#respond Fri, 21 Apr 2017 12:00:33 +0000 http://www.myfirstapartment.com/?p=23520 As promised last week, this is the couples week at the first apartment budgeting boot camp. We’ll try to figure out answers to Rachel’s, Celeste’s and Jimmy’s questions. Rachael Rachael asks: “Do you think $810 would be too much rent for my boyfriend and I together?” See Rachael’s question as a comment to http://www.myfirstapartment.com/2012/08/how-much-should-you-plan-for-utilities/this post.…

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As promised last week, this is the couples week at the first apartment budgeting boot camp. We’ll try to figure out answers to Rachel’s, Celeste’s and Jimmy’s questions.

Rachael

Rachael asks: “Do you think $810 would be too much rent for my boyfriend and I together?”
See Rachael’s question as a comment to http://www.myfirstapartment.com/2012/08/how-much-should-you-plan-for-utilities/this post.

Hi Rachael,

You do not give us any information about your incomes or other expenses, but we love a challenge so we try back into an income number you’d need. We’ll do it by 1.) assuming first that each works a 40 hour week and 2.) estimating the hourly pay rate each would need to earn in order to comfortably pay $810 a month in rent plus all the other typical apartment living expenses and target savings. Because commuting expenses between using cars or public transportation make such a huge difference, we’ll show the numbers both ways. As you see below, if you have to get two cars with average expenses, you each have to earn $3 more per hour to pay for them, versus using public transportation. Good luck! Hope this helps.

Rachael’s Budget: NO CARS 2 CARS
Hours-R 40 40
Pay/hr $10.00 $13.00
Total/yr (50 wks paid) $20,000 $26,000
Est. taxes/deductions 15% ($3,000) ($3,900)
After tax take-home – Rachael $17,000 $22,100
Hours-BF 40 40
Pay/hr $10.00 $13.00
Total/yr (50 wks paid) $20,000 $26,000
Est. taxes/deductions 15% ($3,000) ($3,900)
After tax take-home – BF $17,000 $22,100
Cash take-home -combined $2,833 $3,683
Rent -$810 -$810
Utilities, incl. cable/internet (20% of rent) -$162 -$162
Car payments $0 $300/each -$600
Car insurance payments $0 $150/each -$300
Gas est. ($50 each) $0 -$100
or Commuting -$250 $0
Groceries/food est. for 2 -$450 -$450
Laundry/dry cleaning est. for 2 -$60 -$60
Cell phone est. -$160 -$160
Credit Cards $0 $0
Student Loan $0 $0
Other fixed monthly bills $0 $0
Discretionary expenses ($100/wk/person) * -$800 -$800
Cash Outflow/Month -$2,692 -$3,442
Savings (target 10% of take-home) $141 $241
*Clothing, entertainment, vacations, etc.

Celeste

Celeste asks: “Hi! My boyfriend & I are wanting to move in together. I make around $550-600 biweekly & he makes around $400 a week. We have found a 3 bdrm/2bath for $650/mo & $500 deposit. We don’t currently have a car so I’m looking into getting one on payments. We do currently have about $3,000 saved up. Do you think us moving out soon is plausible? Also my best friend wants to move with us but she makes $8/hr & only works 3 days a week.” You can find Celeste’s question as a comment to this post: http://www.myfirstapartment.com/2013/09/getting-your-first-apartment-how-much-money-do-you-need-to-save-to-move-out/

Hi Celeste,

First, congratulations on having saved a nice little nest egg that will cover your initial expenses when you get your own place.

It looks like it will be tight if you have to get a car and still want to continue saving. We’d like to see at least $100/person/week for discretionary expenses, or $800 a month for a couple. You can get close to that number if you stop saving, but that would be a bummer when you are already used to the routine of  putting some money aside.  If your best friend moves in with you two, and manages to pay one third of the rent, you could use that money for savings, and then have about $700 a month for discretionary expenses.  That should be enough, with the savings as backup. See the rough budget below. Good luck! Let us know what happens.

Note: We are assuming that the incomes you mentioned were after taxes and deduction, not pretax.

Celeste’s Budget:
After tax take-home/month – Celeste ($500*2) $1,100
After tax take-home/month – BF ($400*4) $1,600
Cash take-home -combined $2,700
Rent -$650
Utilities, incl. cable/internet (20% of rent) -$130
Car payments -$300
Car insurance payments -$150
Gas est. ($50 each) -$50
or Commuting $0
Groceries/food est. for 2 -$450
Laundry/dry cleaning est. for 2 -$60
Cell phone est. -$160
Credit Cards $0
Student Loan $0
Other fixed monthly bills $0
Target savings 10% of take-home -$270
Amount left for discretionary expenses $480
*Clothing, entertainment, vacations, etc.

Jimmy

Jimmy asks: “Hello, I’m getting married next month the budget has been a very important topic my fiance and me have been talking about since we realize money is the #1 cause of arguments in a marriage. I’ve never lived on my own so I’m trying to take in as much advice as possible. My situation is the following: I will be moving into an apartment with the rent being $750/mo, this includes sewer, water and trash. I live in Arizona so I realize electricity will definitely be higher than normal. We don’t have any car payments or any debt. We don’t watch TV so it would only internet from us. Cell phones together is about $100/mo. Car insurance together is at $110. Our take home pay after taxes is $3,200 a month. What would your suggested budget be for this scenario?” See Jimmy’s question as a comment to this post: http://www.myfirstapartment.com/2012/08/how-much-should-you-plan-for-utilities

Hi Jimmy,

You are so smart that you and your fiance are getting on the same page regarding money issues. If you are both happy to live within your means, you’ll avoid the money arguments altogether. There will be other arguments (about taking out the garbage and how to split holidays with in-laws and countless other things) but they are easier to resolve. On the money front, with your low fixed expenses, this is the time to maximize your savings so you lay a good foundation for future when the big bills start to come with children and houses and other big budget items. First, if your employers offer 401K plans, participate and save at least as much as you need to get the maximum match. In addition, set up automatic transfers from your salary to savings. You should be able to save 20% of your take-home, for emergencies and future, and still have plenty of money for living expenses. See below. Good Luck!

Jimmy’s Budget:
Cash take-home $3,200
Rent -$750
Utilities, incl. cable/internet (20% of rent) -$150
Car payments $0
Car insurance payments -$110
Gas est. ($50 each) -$100
or Commuting $0
Groceries/food est. for 2 -$450
Laundry/dry cleaning est. for 2 -$60
Cell phone est. -$100
Credit Cards $0
Student Loan $0
Other fixed monthly bills $0
Target savings 20% of take-home -$640
Amount left for discretionary expenses $840
*Clothing, entertainment, vacations, etc.

Lesson 4. Moving in together can save you money

Household expenses (groceries, etc.) for two are less than for two people living separately, because there is less waste and you can buy in larger quantities.  Rent and utilities for a 1BR are less than for two studio apartments and about same as two roommate shares.

 

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Apartment Hunting With Your Significant Other http://www.myfirstapartment.com/2017/04/apartment-hunting-with-your-so/ http://www.myfirstapartment.com/2017/04/apartment-hunting-with-your-so/#respond Tue, 18 Apr 2017 16:00:07 +0000 http://www.myfirstapartment.com/?p=23389 Congrats, you are ready to move in with your significant other! Whether you just made the decision, or are apartment hunting again, looking for apartments with your SO is a completely different beast than looking for yourself. After recently finding my first apartment with my SO, I have compiled a bit of advice and insights…

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Congrats, you are ready to move in with your significant other! Whether you just made the decision, or are apartment hunting again, looking for apartments with your SO is a completely different beast than looking for yourself. After recently finding my first apartment with my SO, I have compiled a bit of advice and insights from the process to help you on your journey.

Pre-Hunt

Before you even begin to hunt, figure out your numbers and wishes. One of the great things about moving in together is that now you can take that monthly rent and split it in half! Because of this, you may be finding yourselves in better financial situation than before, often allowing you to get more of what you want in an apartment. However, don’t get too excited because half the cost means having to deal with twice the personalities. Before getting started, have a conversation with your partner and talk through what you are actually looking for.

  • Logistics

Start off with the logistics: What part of town? How many bedrooms? Combined budget? Are pets a concern? Parking or public transportation?

  • Wants

Then move to the wants: Walk up or elevator? Eat in kitchen? In unit W/D? Is air conditioning necessary? Fitness center?

  • Style

Finish off with style: New construction? High ceilings? Old school charm? Stainless steel? Cottage-y feel? Urban vibes?

The Hunt

If you are anything like my SO and I, there will probably be one of you who heads the hunt (probably the one who is reading this). I found that having one person be the “point-person” for scheduling tours and communicating with rental agencies made the process easier. However, if you and your partner are amazing schedulers, then more power to ya, my friends.

As for the actual touring portion, make sure that as often as possible you are scheduling tours when you both can be there. If one of you cannot be there, try to wear their hat as well as yours when touring and take pictures. I repeat, take pictures! While you’re at it, take notes over key information (lease start, utilities included, etc). It’s often hard to remember small details later in the day. If it works out that you both are there, learn the “2 Block Rule”- while you are within 2 blocks of the place you’re touring, keep your poker face on. Whether you are IN LOVE with a place or can’t get out of there fast enough, stay courteous and attentive throughout the tour. If you give away you’re disposition, it can work against you.

The Big Decision 

This is it. It’s the big decision. It’s time to kick your compromising skills into gear. If you don’t have a clear favorite, narrow it down to your top three choices. From there you can refer back to your “logistics/wants/style” choices and do a pros vs. cons sheet for each one. And before you sign on the dotted line, remember that you are entering into a legal relationship between you, your SO and your new landlord, so make sure you understand all your obligations to all parties.

In the end, whether you chart it out or flip a coin, keep your goal in mind – a home where you and your SO will start making memories together.

 

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Housewarming Party: Do’s and Don’ts http://www.myfirstapartment.com/2017/04/housewarming-party-dos-and-donts/ http://www.myfirstapartment.com/2017/04/housewarming-party-dos-and-donts/#respond Sun, 16 Apr 2017 16:00:34 +0000 http://www.myfirstapartment.com/?p=22700 Welcome to your first apartment! Now that all the hard work is over (finding your place, securing funds for a deposit, filling out applications, waiting to hear you got your place, packing up, moving in, unpacking)…it’s time to celebrate! Moving into your first place is not only exciting, but it is a huge accomplishment and…

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Welcome to your first apartment! Now that all the hard work is over (finding your place, securing funds for a deposit, filling out applications, waiting to hear you got your place, packing up, moving in, unpacking)…it’s time to celebrate! Moving into your first place is not only exciting, but it is a huge accomplishment and no easy feat. Housewarming parties are traditionally ways to invite your friends into your home to help you enjoy the accomplishment. For your first housewarming, check out these tips!

Do…Plan an activity

Whether you leave out cards or a board game, plan to lead a quick tour every half-hour, or turn on a sports match, try to have some sort of activity in play for your party. Activities help people who don’t know each other mingle and breaks up a big room.

Do…Supply light snacks

For any party, consider supplying a few appetizers and drinks for your guests. Feel free to encourage a “BYOB” or potluck style, but as the host, always have a few things to offer as well. See this post for quick, easy app ideas that would be great for your housewarming.

Do…Encourage a drop-in atmosphere

Housewarming parties can take place at any time of day, but I love a 3-hour, afternoon event. Encourage friends to “swing by” to see your new place and hang out for a bit, but don’t force an hours-long commitment, especially on close acquaintances. Afternoon housewarming parties are great because you can start the event around 4PM and by 6PM only your close friends will have stuck around, leaving you all to decide how to handle the rest of the night.

Do…Invite friends from different areas of your life

A housewarming is a great, low-commitment way to include your friends AND close acquaintances…think of friends from work or people you don’t see often. The drop-in atmosphere is low-pressure, and it’s a fun way for everyone involved to meet new people. Use an invitation website or Facebook group to track your RSVP’s!

Don’t…Expect gifts

(Very) traditional housewarming parties encourage guests to bring household items as gifts, much like a wedding shower. However, in an apartment and at a younger age, that norm is slightly different. Don’t expect your guests to bring gifts unless you explicitly ask for them, which I would discourage.

Don’t…Invite too many guests

Remember, you live in an apartment! That means there may not be tons of space for a huge party. Keep your space limitations in mind when inviting friends so that everyone can have a good time comfortably.

Don’t…STRESS!

At the end of the day, a housewarming party is a way to share an exciting accomplishment with those you love (and a way to give back to the friends that helped you move!). Keep it fun, easy, and stress-free for yourself by planning ahead and keeping the party simple.

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First Apartment Budgeting Boot Camp: Brit and Billy http://www.myfirstapartment.com/2017/04/first-apartment-budgeting-boot-camp-case-studies-brit-billy/ http://www.myfirstapartment.com/2017/04/first-apartment-budgeting-boot-camp-case-studies-brit-billy/#respond Fri, 14 Apr 2017 16:00:31 +0000 http://www.myfirstapartment.com/?p=23486 Your first apartment budgeting boot camp continues. Today we look at two real life examples, based on questions we have received from two of our readers, Brit and Billy. (Next week’s lesson will cover apartment budgeting when you are moving in with your significant other.) Brit: “Hi there, I’m also looking to move out of…

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Your first apartment budgeting boot camp continues. Today we look at two real life examples, based on questions we have received from two of our readers, Brit and Billy. (Next week’s lesson will cover apartment budgeting when you are moving in with your significant other.)

Brit:

“Hi there, I’m also looking to move out of my parents lol! I have been saving enough where I have an ’emergency/job loss fund’ and an ‘unexpected bills’ fund. As of now my take home pay after taxes, health insurance,401K is about 1800/mo.

I am looking to see what my target rent should be (and estimated utilities) as I prepare to move out. Car is paid off and parents will cover car insurance. Phone bill is $75, student loans $100, I estimate I would spend $180/mo for transportation, $200/mo on groceries, I would still like to save at least 15% for personal savings.

What would be a good target or range for apartments?”
(You can find Brit’s question as a comment to this post.)

Hi Brit,

Your question tells us that you are a financially responsible person –  you mention having savings and looking to add more, and you are contributing to a 401K plan at work. A great start!

Our basic formula is that your monthly rent should be no more than 35% of your take-home pay.  In your case that would be $630. So, let’s start your budget using that figure for rent. For utilities, our formula, based on our utility surveys, is about 20% of your rent.  Next, you add to your budget all your other known monthly expenses and expected savings. The monthly bottom line shows how much you have left for all your other discretionary expenses, such as clothing, entertainment, vacations, and Starbucks coffee runs. Only you know what that number needs to be for you to have a great first apartment experience and not run out of cash mid-month.

Even with the help from your parents with car insurance, your rough budget below shows clearly that with our formula rent you cannot save an extra 15%.  Also, your grocery budget seems a little light, unless you plan to do some of your shopping at your parent’s pantry. (Yes, it’s been known to happen!) You probably did not include lunches at work, either. Even at $5 a day, it’s another $100.

We don’t know what the rent levels are in your market. If you can get a place in the $500 range, lower your after tax savings target for now, and bump up your savings in your 401K a bit (it’s pretax money, so it has a little less impact on cash flow), then you should be able to make it. You may end up in a roommate share, but that’s ok, too. Good luck! Let us know how things work out.

Brit’s Budget:
Per month take-home $1,800
Max. rent -$630
Utilities, incl. cable/internet (20% of rent) -$126
Car payment (paid off) $0
Car insurance (paid by parents) $0
Gas (included in commuting?) $0
or Commuting/transportation -$180
Groceries/food est. -$200
Laundry/dry cleaning est. -$40
Cell phone est. -$75
Credit Cards $0
Student Loan -$100
Savings (15% of take-home) -$270
Cash left for all other expenses/Month $179
Clothing, entertainment, vacations, etc.

Billy

“Hey I know you’ve been helping a lot of people fine tune their budget on here and I’ve been struggling to make my own any help is greatly appreciated. I make 21/hr and pay 675 for my car 80 for phone 375 in other debt as well as 200 for commuting to work I work 40+ hrs per week what do you think I could afford???”
(You can find Billy’s question as a comment to this post.)

Hi Billy,

You have a well-paying job, but you have dug yourself in a bit of a financial hole. When the car dealer saw how much you make, he sold you set of wheels fully loaded with every expensive option. Or maybe you have a truly lousy credit score and you have to pay super high interest on your car loan. The result is that you pay $875 a month, or one third of your take-home income, for car expenses and commuting. Have you thought of trading down to a less expensive car? On top of that, you have $375 a month payment on other debt. Between these two budget busters, $1,250, or almost half of each paycheck is gone.

Based on our formula rent for someone making $21/40 hours, you should be able to afford up to $1,050 a month, but with you other obligations that is not doable. We don’t know where you live, but if you can find a place in the $500 a month range, you could start digging yourself out of the hole. (See rough budget below.) You’d have less than $100 a week for discretionary expenses, which is very tight, but you probably make a little more than what we estimated because of overtime. You need to pay down your other debt and start saving an emergency fund. Good luck, we are rooting for you!

Billy’s Budget:
Hours 40
Pay/hr $21.00
Total/yr (50 wks paid) $42,000
Est. taxes 25% ($10,500)
After tax take-home – $31,500
Per month take-home $2,625
Max. rent -$500
Utilities, incl. cable/internet (20% of rent) -$100
Car payments (incl. insurance?) -$675
Car insurance est. $0
Gas est. $0
or Commuting (includes gas?) -$200
Groceries/food est. -$300
Laundry/dry cleaning est. -$40
Cell phone -$80
Credit Cards $0
Other Debt -$375
Savings (target 10% of take-home) $0
Cash left for all other expenses/Month $355
Clothing, entertainment, vacations, etc.

Lesson 2. Make saving a priority.

If your company offers a 401K plan with a match, make sure you save at least enough to get the full match. In addition, you should have an emergency fund when you move out, even couple of hundred dollars will get you started. We have built a little slack into our hourly-pay rent formula, using a 50-week year, for two reasons: first, to make up for any unpaid sick or vacation days and second, if unpaid not used, then to give you an extra paycheck to go to savings.

Lesson 3. If you have dug yourself into a budget hole, stop digging.

There are only two ways to balance a budget that has gone out of whack: cut expenses or increase income. If your fixed expenses are the problem then you need to cut what you can. However, you must also find ways to increase your income, with overtime or side hustles, and use that extra money to pay down debt.

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College Graduation Moving Tips http://www.myfirstapartment.com/2017/04/college-graduation-moving-tips/ http://www.myfirstapartment.com/2017/04/college-graduation-moving-tips/#respond Thu, 13 Apr 2017 16:00:57 +0000 http://www.myfirstapartment.com/?p=23338 For many of us, college graduation is RIGHT. AROUND. THE. CORNER. There may be a few things to stress about (finishing finals, saying “bye for now” to close friends, doing a deep clean of your dorm before heading out, planning a graduation party…) but moving doesn’t have to be one of them! Here are a…

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For many of us, college graduation is RIGHT. AROUND. THE. CORNER. There may be a few things to stress about (finishing finals, saying “bye for now” to close friends, doing a deep clean of your dorm before heading out, planning a graduation party…) but moving doesn’t have to be one of them!

Here are a few tips to ensure your move FROM college TO your new first apartment goes as smoothly as possible!

  • Start the deep-clean now

Personally, my least favorite part about a move is the deep-clean that needs to occur for you to retain your security deposit! University housing can be especially strict on cleanliness. Instead of waiting until moving day to do a massive deep clean of your current apartment/dorm, get started now! With about a month to go, you can tackle some of the nastier areas early, leaving you with a simple wipe-down and vacuum on moving day. Trust me, this one is worth it!

  • Pack in manageable segments 

Another great way to be prepared and limit stress is by packing in waves! After class or between the gym and dinner, choose one area of your room to pack up. For instance, focus on one thing at a time, like: Wall decor, Desk, Closet knick-knacks (everything other than the clothes you need), Dresser, TV Stand, Kitchen, Living room. Purchase some plastic bins (or use garbage bags, no judgement!) to gather up your belongings little by little. Then, during the week before you move, you can pack up clothes and bedding. This way, everything gets done over time and you don’t have to spend hours-upon-hours on your last few days of school.

  • Everything must (NOT) go

If you were frugal like me when moving to college, lots of your items are probably cheap and falling apart after four (plus or minus) years of use. Consider donating or throwing away items that you won’t need, don’t like, or are broken. There’s no need to schlep junk into your new place!

  • Solicit moving help from friends and family

For the actual moving day, solicit help from friends and family. This is especially pertinent if lots of family is coming to town to watch your graduation. Ask them (nicely) to stick around to help you load up your car (and possibly their cars, depending on how much stuff you bring home!). The absolute key here is that you. must. be. packed. before this occurs. Friends and family are generally willing to help you “move”…but no one (repeat, NO ONE) likes helping others pack up their junk. Especially when you could have packed in the weeks prior to the move!

  • Coordinate the move with your new apartment 

The ideal situation is to move out of college and into your new apartment within a day or so. That way, you can simply drive all of your stuff directly to your new place without worrying about storage units or moving multiple times. Try to coordinate your moving schedule and the start of your lease with your new apartment so you can simply drive from school to your new place and move in.  Keep in mind that if you are moving to a large city apartment building,  you may need to reserve the use of a service elevator beforehand for your move-in. There may also be some fees involved. Don’t get caught having to keep your stuff in a parked even overnight. It is never a good idea.

  • Try to secure a job before graduation

Now, I’m not laying on any pressure here, but try to secure a job or location before graduation. This will help you decide where to lease your first apartment (which city, which area  in the city, what price range) to ensure you make a smart decision. If you don’t yet have a job, choose a temporary sublet situation in an inexpensive (but safe!) area while you look or consider moving in with family until you know for sure where you’ll be working.

Congratulations on your (almost) degree. It’s a huge accomplishment! What other tips do you have for college grads?

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Beyond Craigslist: Beginner’s Guide to Finding Rental Listings http://www.myfirstapartment.com/2017/04/finding-rental-listings-beginners-guide/ http://www.myfirstapartment.com/2017/04/finding-rental-listings-beginners-guide/#respond Tue, 11 Apr 2017 16:00:24 +0000 http://www.myfirstapartment.com/?p=23344 There is a lot of research that goes into finding rental listings, but luckily there are also plenty of resources you can use to find a perfect place to live. You just have to take the time look and utilize both online and offline resources to see what’s out there. Here are a few places…

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There is a lot of research that goes into finding rental listings, but luckily there are also plenty of resources you can use to find a perfect place to live. You just have to take the time look and utilize both online and offline resources to see what’s out there. Here are a few places where I found a lot of rental options when I was getting ready for my recent move.

Trulia

This is a great resource with great visuals. It gives you the opportunity to filter what is within your budget and how many spaces are available in your area. There are pictures included as well for some listings. This is the perfect resource if you want it all on one site.

Zillow

Similiar to Trulia, it has the same visual and filter format, which can be helpful if you are looking for a new apartment. It shows all your options and the costs. I have had a lot of luck looking on Zillow and find it to be a dependable source.

Classifieds 

If it used to work back in the day, then it certainly is still valid now. Sometimes, real gems are hiding in the classifieds. Of course, there isn’t the typical visual presentation like in new apps but give the classifieds a chance and pick up the phone if you see an ad that interests you. There is no harm in trying.

Realtor

Tried and true. Using a realtor as a resource is helpful when you want to get a better idea of what is in the area and see if there are any options that you have missed elsewhere. Keep in mind that you shouldn’t sign anything. If you sign a contract of some sort, you may have to pay a fee – as much as 12-15% of annual rent in some markets – to the realtor for their assistance. Keep it an open conversation as opposed to committing to a formal contract and make sure you understand when the broker’s fee meter starts ticking.

Ask Around and Network

Always use your co-workers, friends and family as a resource when looking for a new place. You never know who is looking for a roommate or who has fresh leads to available rental apartments.

Neighborhood Bulletin Boards

In smaller markets you can often find bulletin boards in local supermarkets and coffee houses where people post ads about available rooms or apartments. This is another apartment hunting resource that is often overlooked.

Craigslist

Ok, we said beyond Craigslist, but, of course, you’ll also check out this granddaddy of all apartment listings. When you do, use our previous posts to make the most of it, starting with  5 tips to make your search more efficient and how to make good impression on potential roommates.

Happy Hunting! Let us know in comment below how you found your apartment.

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First Apartment Budgeting Boot Camp – Formulas and Guidelines http://www.myfirstapartment.com/2017/04/first-apartment-budgeting-boot-camp-formulas-guidelines/ http://www.myfirstapartment.com/2017/04/first-apartment-budgeting-boot-camp-formulas-guidelines/#respond Fri, 07 Apr 2017 16:00:15 +0000 http://www.myfirstapartment.com/?p=23363 Moving into your first apartment is a big learning experience in so many ways: How to deal with landlords? How to keep your place clean? How to manage to cook and eat a healthy diet? However, for most first time renters the biggest learning hurdle is how to manage all the new expenses. For the…

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Moving into your first apartment is a big learning experience in so many ways: How to deal with landlords? How to keep your place clean? How to manage to cook and eat a healthy diet? However, for most first time renters the biggest learning hurdle is how to manage all the new expenses.

For the next few weeks we are going to run a MFA Budgeting Boot Camp, so that when your time comes to move out on your own you’ll know what to expect. We are going to do that two ways, with some formulas and guidelines for estimating typical apartment expenses, plus running through some tricky real life budgeting situations that our readers are submitting in the comments, for example in here and here. You can also submit your budgeting dilemmas as a comment to this post. (Please read our Terms&Conditions before posting any comments and protect your personal identity by not including your full name or other identifying information.) We’ll pick couple of interesting situations to cover each week.

Here are typical annual pay levels for 2017 graduates:

  • College – Bachelor’s Degree $41,880 (estimate taxes/deductions at 25%) 1.)
  • High School – $10 an hour, 40-hour week, $20,800 (estimate taxes/deductions at 15%)

Here are typical expenses you’ll have to budget for when you live on your own:

  • Rent (see Affordable Rent Calculator and How Much Rent Can I Afford on My Hourly Pay for how to estimate)
  • Utilities – electric, cable/internet, water, heat, garbage collection (estimate at 20% of rent) 2.)
  • Renter’s Insurance (estimate at $17 a month)
  • Car Loan or Lease (estimate at $300 a month) 3.)
  • Car Insurance (estimate at $150 a month) 3.)
  • Gas (estimate at $50 a month)
  • or Commuting expenses (find out your city’s plan – in NYC  unlimited 30-day MetroCard is $121)
  • Groceries/Food (estimate at $300 a month) 4.)
  • Laundry/Dry Cleaning (estimate at $40 a month)
  • Cell Phone (estimate at $80 a month) 3.)
  • Student Loans
  • Credit Cards
  • Saving – Retirement and Emergency Fund (estimate at 10% of take-home pay)
  • Discretionary Expenses – clothing, entertainment, vacations, etc.

So, let’s see how our two new graduates will fare.

College Grad Salary $41,880:

Take-home pay (after taxes and deductions) per month $2,618 ($41,880 less 25% divided by 12)
Less:
Rent  $1,047 ($41,880/40)
Utilities $209 (20% of rent)
Renter’s Insurance $17
Car Loan or Lease $300
Car Insurance $150
Gas $50
Commuting $0
Groceries/Food $300
Laundry/Dry Cleaning $40
Cell Phone $80
Student Loans ?
Credit Cards ?
Savings $262 (target: 10% of take-home)
Amount lefts for Discretionary Expenses if has a car $162
Amount left for Discretionary Expenses if no car, but uses a monthly MetroCard $541

High School Grad Salary $20,800:

Take-home pay (after taxes and deductions) per month $1,473 ($20,800 less 15% divided by 12)
Less:
Rent  $520 ($20,800/40)
Utilities $104 (20% of rent)
Renter’s Insurance $17
Car Loan or Lease $300
Car Insurance $150
Gas $50
Commuting $0
Groceries/Food $300
Laundry/Dry Cleaning $40
Cell Phone $80
Student Loans ?
Credit Cards ?
Savings $ (target: 10% of take-home)
Amount lefts for Discretionary Expenses if has a car ($88)= Must dip into savings
Amount left for Discretionary Expenses if no car, saves 10% and uses a monthly MetroCard $291

Lesson 1. Your car can be a budget buster

What do we learn from these two hypothetical examples? If you must have a car, you may have hard time carrying the expenses of living on your own.  Luckily, if you are heading to a city with good public transportation options, you may not need a car, making it easier to afford the (often higher) rent.

 

Sources for estimating income and expenses:
1.) Average salary for all majors, as reported by US News.
2.) Average utilities for Studio/1BR per MFA Surveys
3.) Car loan and insurance, and cell phone costs are rough estimates, based on averages of actual expenses paid by MFA’s readers, as described in comments to the site’s posts.
4.) Reference .com – Average grocery bill for one person

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