If you’re just starting out in your first place, it’s likely that you’ve secured a job (or some sort of income) to ensure your bills can be paid each month. While the job market has stabilized in recent years, it’s always important to prepare for a worst-case-scenario when it comes to money. What would happen if you lost your job today? How could you pay for your apartment? Would you get evicted?
Thankfully, that’s probably not going to happen. But if your answers to those questions were unsure, keep reading! Here’s some advice on being prepared for a lost job and making sure it doesn’t ruin your first apartment experience.
At any given time, try to have at least one-month’s bill money in a savings account just in case. I know that’s easier said than done (trust me!), but if you start saving now, that will build over time and leave you prepared. If you’re an investor, invest that money in low-risk accounts so you can trust that it’ll be there in an emergency.
By having a one-month cushion of money, you give yourself precious time to search for a new job without risking losing your apartment or getting behind on other bills.
Here are two neat tricks for saving money that my fellow blogger Audra has discovered:
- The 50/50 Trick — It’s easy, whenever you make a purchase that’s a non-necessity, you put the same amount of what you spent on your purchase into your savings account. It’s a great way to hold yourself accountable for your purchases and build a safety net for yourself along the way.
- The “Frog” Method — Like the proverbial frog that does not realize to jump out of the pot when the water is heated slowly, you learn to painlessly save increasing amounts. This is meant to be an annual system, and it’s really simple: you save $1 week 1, $2 week 2, and so on, until the last week of the year you put away $52. Total saved over 52 weeks, $1,378! Of course, nobody forces you increase all the way $52/a week. If after 20 weeks or even 10 weeks, you really feel the pinch, stop increasing but continue saving at that level. If you get up to $20 and continue at that rate, you’ll save $850, and at $10, you’ll save $475 in a year. Not too shabby!
(MFA Editors: We’d like to add the “Change in Your Pocket” method. Empty out your change into a jar every day and deposit in your savings account once a month. Every little bit helps!)
2. Track your spending
If finding money to save at the end of the month is difficult, track your spending throughout the month to find areas you can cut down back on so you can dedicate some funds to your safety net. Perhaps that means cooking more than going out or limiting weekend vacations until you can build up a healthy savings account.
Tracking spending will help you identify areas to limit in order to develop your savings account and safety cushion.
Here are a few of the many posts My First Apartment has published about tracking and controlling expenses:
How to Keep Track of Your Monthly Expenses
Living on Your Own -How to Avoid Budgeting Woes
Our Favorite Money Management Sites
3. Don’t bite off more than you can chew
When finding your first apartment, make sure you find one that is well within your means. If you choose a place that forces you to scrape by each month, perhaps that’s not the best place for you. Make sure that your rent/utilities payments leave you with plenty of spending money for food and activities…and savings!
It’s very important, especially in your first place, to live WELL within your means without forcing yourself to stretch your money. If anything were to happen to your job, and you’re already struggling to make payments each month, you may end up in a situation beyond your control.
Read here more of our proven tips on preparing financially for your first apartment:
As long as you are prepared, even losing your job doesn’t have to mean panic in your first place. Make sure to develop a strong safety net of money underneath you for that worst-case scenario, and you should be out of the woods in no time.