How Much Apartment Can You Afford?

25 Nov 2009

25 Nov, 2009 Cell Phone Comparison

Deciding how much apartment they can afford is one of the most important decisions a renter will have to make. This decision will help to determine a number of factors include the size and location of the potential apartment as well as the types of amenities offered. Those who are interested in renting an apartment will have to consider all of their current expenses in comparison to their monthly cash flow. They will also have to determine whether or not there are changes they can make to their current budget to make a larger or more well situated apartment affordable.

Consider All of Your Expenses

When deciding how much apartment they can afford, renters should carefully consider all of their monthly expenses in relation to their monthly income. Expenses may include, but are not limited to, utilities such as gas, water and electric, telephone, cell phone, Internet services, cable television, car insurance, renter’s insurance, gas for car, cost of commuting to work, groceries and other incidental charges. Subtracting these costs from the monthly income will give the renter a good idea of how much money they can afford to spend on rent each month. Renters might also consider subtracting an additional amount out of their monthly income to give them the opportunity to save some money each month.

Expenses to be considered should also include expenses for entertainment purposes such as dining in restaurants, going to movie theaters or cultural events. Even movie rentals should be considered in this category. Considering these expenses is necessary because otherwise the renter may not allot a portion of their budget for such purposes and may find themselves unable to participate in some previously enjoyed leisure activities.

Is There Room for Improvement?

When examining the monthly budget, renter should take the opportunity to determine whether or not there is room for improvement in their current financial situation. For example a renter may find they are able to minimize their monthly bills by obtaining their car insurance and renter’s insurance from the same insurance carrier. The carrier may be willing to offer a discount to a customer who utilizes their services for more than one type of insurance. Likewise there may be the opportunity to minimize expenses by bundling services such as telephone, Internet and possibly even cable television.

Also, consider entertainment expenses as an opportunity for financial improvement. If a renter currently eats out in restaurants for dinner on both Friday and Saturday of every week, they could consider limiting these dining experiences to only one night a week or even only one night every other week. This can result in a significant cost savings which may enable the renter to afford a more expensive apartment.

Other areas where renters can sometimes cut expenses are on cell phone bills and cable television bills. Examine your cell phone bill carefully. If you are not using all of your minutes each month, it might be worthwhile to switch to a plan with fewer minutes. This would lower your monthly bill without causing you to make any sacrifices. One area where sacrificing might contribute to more monthly cash flow is with cable television. Renters who pay higher fees for premium channels can consider eliminating these channels. All of these small changes to monthly spending can contribute to the renter being able to afford a more expensive apartment which may be larger or in a better location than the apartment they would be able to afford without making changes.

Is There a Need for Improvement?

Although trimming superfluous expenses is always a good financial strategy, renters should determine if this is necessary in terms of their rental situation before making drastic changes. Once a renter has established the amount of money they can afford to spend in rent, they can start to look for available apartments in that price range. If the renter is happy with the choices available to them at this time, there may not be a need to make financial adjustments at this time. However, if the renter is not happy with the options available, financial changes and stricter budgeting are warranted.

David Riewe
http://www.articlesbase.com/real-estate-articles/how-much-apartment-can-you-afford-123825.html

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10 Responses

M G
2009 Nov 25 1

How much should I make to afford an apartment?
How much money per hour do I need to make in order to afford a $600 dollar a month apartment???
fdm215
2009 Nov 25 2

I think the rule of thumb is to expect to put 25 – 30 percent of your income into your housing costs. So, that should include rent, utilities.
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Smiley
2009 Nov 25 3

What skills have you and what are people willing to pay you?
That determines your income level.
Find that out first – then deduct $600 to see if you can still afford other things….like food etc…

If not – check for a lower cost place to live.
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eMale
2009 Nov 25 4

I live in Tampa Florida and most won’t rent unless the rent is less than 1/3 of your income. Of course you can get a couple roomates to help.
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Good Luck!
Brandi
2009 Nov 25 5

Wow thats an expensive apt. Where I live they run right around 300. OK but anyway.

Say all your bills total out to be $1,000. This includes your light, heat, water, garbage, telephone, and whatever other bills you might have. Including your rent.

And say you want to put back 200 a month for savings.
And say you have a 300 a month car payment.
And then you want a spending allowance of say 600 a month. This is for food, and cds, dvds, games, clothes, what not.

All of that would equal out to be 2100/mo.

So just to be on the safe side well do 2500. Say you work 40 hour weeks. For one month that would be 160 hours.

You would need to make $13.12/hr.

I hope this helps.
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Lisa D
2009 Nov 25 6

Well….first you need to work at your job for a whole month and pay your savings account rent money, insurance money (renters insurance will be about $30/month), fake utilities (if it’s a small apt, I’d avg about $150 for utilities) pay the rest of your bills, and see if there is enough left for food and entertainment that you require. If you don’t have any cash left at the end of the month (besides your fake rent payment in your savings) then you can’t afford to move out.
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Lifesnadir
2009 Nov 25 7

Minimum 1,000 if utilities are included.

1,200 to 1,500 if utilities are not

Include
car payment

car insurance

rent

renter’s insurance (you do want to be protected in case of a fire, don;t you??????)

utilities

food

laundry and laundry products

personal products, like toilet tissue etc.

personal products like razors, menstral pads etc for women (etc)

cable tv

recreation

eating out — even if just an occassional coffee

gifts

SAVINGS (You do plan to save — right??????)

Lifes
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Chi Guy
2009 Nov 25 8

Write out all of your bills on paper (credit cards, insurance and so on).

Write out $600 (rent), 150 – 300 for utilities, 250 food (if you cook), 400 for food if you eat out. Gas, entertainment, savings. If you have any left then go for it.
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ShuckyDucky
2009 Nov 25 9

That really depends on your other expenses like insurance payments, car payments, grocery bills, gas, etc…
And it also depends on where this apartment is. If it’s somewhere where the price of living is high vs. low then you have to take that into account as well.

All I can say is to get the best job you can get. I’m assuming from your question you’re like 20ish and just starting out. If that’s the case, I’d try to find something a little bit lower (but of course that depends on where you live). In NY that’s cheap, but in I dunno…Backwoods, USA that could be really expensive.

I’d get something inexpensive and see how it works out for the first few months. Or if you really want this particular $600 apartment…then find a good job where you can get decent hours and possible overtime pay.
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If Sky has a Limit
2009 Nov 25 10

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