Before you are ready to sign the lease to your first apartment, you need estimate the cost to move out and save enough money to cover these 5 expenses that you’ll have to pay before or on your moving day.
1. Payments to the landlord
Your landlord will require you to pay the first month’s rent plus a security deposit that is typically equal to your monthly rent. In addition, you may also have to pay your last month’s rent, to provide landlord security that you don’t skip out at the end of the lease without making your final rent payment. So, as you sign the lease you are writing a check to the landlord equaling two to three months of rent.
Use this worksheet to estimate how much rent you could qualify for on your annual salary and this one if you are paid hourly.
In addition to the rent and security, your landlord probably charges you $50-$100 in various application fees, such as for a credit check, even before you are accepted for the apartment.
2. Utility deposits
Your electric, gas and water companies and your cable/internet company may require security deposits or ask you to pay for the first month of service in advance. Any deposits are typically based on your estimated usage. For example, if you have electric heat, your initial payment will be higher than if you only use electricity for lights and to power all your appliances and equipment. After you move in your electricity, water, etc. utilities bill based on usage. When you move out you’ll need to request to get any deposits back.
To show how these deposits may work, here is typical language from a Comcast Cable agreement:
“You will be billed monthly, in advance, for recurring Service charges, equipment charges, and fees. YOU MUST PAY THE FIRST MONTH’S SERVICE CHARGES, XFINITY EQUIPMENT CHARGES, DEPOSITS, ACTIVATION FEES AND INSTALLATION CHARGES ON OR BEFORE THE DAY WE INSTALL ANY OR ALL OF THE SERVICE(S).”
We estimate that your utilities will total somewhere around 20% of your rent, depending where you live and what is included in your rent.
3. Moving costs
Depending on how far you move and how many possessions you have, you may need to rent a van or truck, or even hire a moving company. You may have seen ads for moving trucks for as low as $19.95 a day. Those rates do not include all the fees you’ll be paying, so even a quick, small, in-town move will easily add up to $100 all in, and moving to a different city will cost from several hundred dollars up. Be sure to get a cost estimate when you make your van reservation.
4. Starter Furniture
If you don’t bring any furniture, your move will be easier and cheaper, but where are you going to sleep? An inflatable mattress will work for a few nights, but if you planned properly and saved a little more, you can order to have a mattress delivered to your new place on your moving day. Even if you don’t have any furniture, you probably have bedding to get started with, and to be upgraded as your budget allows.
You’ll also need at least one lamp, curtains or window shades, and a desk or table and couple of chairs. Read how one of our bloggers furnished her place for under $1,000.
5. Starter pantry and supplies
There are a few supplies that you need on your moving day, starting with toilet paper and paper towels and some kind of cleaning product. If you are a coffee or tea drinker, you’ll need a coffee pot or water kettle for your wake-up coffee. Your first trip to the supermarket will probably run at least $50-$100 if you want to stock up on some basics.
Savings target estimate:
Our rule of thumb is that you should save at least 3 times your expected monthly rent before your move. Here is the savings target range if you make $15 an hour or about $30,000 a year:
Landlord: $1,550-$2,350 = first month rent ($30,000/40= $750), one month security deposit, last month rent, plus $100 for application fees
Utilities upfront: $150 = 20% of rent
Moving costs: $100 to $500 = small in-town move or long distance move
Furniture: $500 to $1,000 = mattress +
Basic supplies: $50 to $100
TARGET SAVINGS: $2,350 to $4,100
Good article, the information was very helpful!
I feel I am going a bit overboard, for planning to move out… I am 19 and still live at home, really want to get out on my own here soon. I also attend college full time; I am taking generals right now.
I have about 5600$ saved up in my bank account, and I have 2500$ in my moving out/ investing account (would use it for a down payment).
My plan is to save up 15,000$ for a cushion of rent and expenses, just in case, I can’t pay it. My necessities would be close to 550$ and 1500$ for furniture. So I am looking at about saving up 20,800$ for moving out?…
Is that overkill? Thank you for reading.
PS. I only make an average of 1000$ per month.