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How much should I save up for an apartment?
Moving into a new apartment can be an exciting experience. Yet whether you want to rent your first apartment or you’re getting ready for a new lease, there are steps you should take in advance to prepare for the big day.
In particular, it’s important to make sure you set aside enough money to pay for your upcoming move.
The exact amount of money you need to save when you move into a new apartment can differ based on factors such as your location, your credit, and the property you’re leasing (among other details). In general, it’s a good idea to save at least four times your estimated monthly rent to make sure you have enough money to cover up-front deposits, first and last month's rent requirements, and basic moving expenses.
The following guide can help you understand how much money you should save for an apartment and the types of expenses you may encounter when you move. You’ll also discover helpful tips you can use to save money for an apartment so you’ll be better prepared.
How much should I save for an apartment?
When you’re saving money to move into a new apartment, it’s a good idea to start by figuring out how much you can afford to spend on rent each month. Experts often recommend keeping your rent costs at 30% or less of your monthly income.
From there, you’ll typically want to save at least four times your monthly rent to cover up-front moving expenses. For example, if you know you can afford $1,500 per month in rent, you would want to save around $6,000 for a new apartment.
As you start to stash money away for your upcoming move, here’s a look at some of the expenses you might encounter along the way.
Application fees
Many apartment complexes and landlords charge application fees when you submit a rental application. These fees can vary from state to state and often range between $25 to $100.
Security deposit
When you rent an apartment, it’s common for landlords to require an up-front security deposit as part of your new lease agreement. Security deposits are often equal to one month’s rent. But if you work to improve your credit score before you apply for an apartment, you might be eligible for a lower security deposit requirement.
Read more: 10 tips to improve your credit score
First and last month’s rent
As a new tenant, it’s also common for a landlord to request the payment of your first month’s rent up-front. Some landlords may want you to pay your last month’s rent in advance as well, in addition to the security deposit. But this requirement could vary depending on the property you’re interested in leasing and your credit score.
Utility deposits
With some apartment complexes, the cost of utilities like electricity, gas, and internet (among others) may be included with your monthly rent. In other cases, you may have to pay for utility services separately. And if you have to set up new utility accounts in your own name, there’s a chance you may encounter initial deposit requirements for these services as well.
Moving expenses
It’s also important to set aside enough money to cover the cost of moving expenses when you lease a new apartment. Moving fees could range from a few hundred dollars to several thousand dollars depending on whether you plan to rent a truck and move your belongings on your own or higher professional movers. Be sure to plan accordingly as you budget for these expenses.
New furniture and household items
If you’re moving into your first apartment or upgrading to a larger space, you may need to save money for new furniture and other household items.
Appliances are often (though not always) included in apartments. But you’ll need to budget ahead for furnishings such as beds, couches, tables, and any other items you want to purchase for your new living space. It’s also wise to set aside money for other essentials you may need to buy such as kitchen and cleaning supplies.
Tips for saving money for an apartment
For most people, saving thousands of dollars for a new apartment takes time. But there are steps you can take to speed up the process and improve your chances of success.
Use a high-yield savings account
A high-yield savings account (HYSA) could be a great place to store your savings as you tuck away money for your future apartment. As the name suggests, a high-yield savings account typically earns more interest than a traditional savings account, helping your balance grow at a faster rate.
Additionally, by keeping your savings in a dedicated account (separate from your checking account), you may reduce the temptation to spend those funds on anything other than their intended purpose.
Read more: The 10 best high-yield savings accounts available today
Automate your savings
Another strategy for saving for an apartment is to regularly transfer a set amount of money into your HYSA through automated savings.
Automating your savings can help ensure you never forget to save toward your financial goals. Yet even with this approach, it’s still important to review your accounts (and your budget) on a regular basis for suspicious activity and to make sure you don’t need to make adjustments.
Read more: Should you automate your savings? Pros and cons to consider first.
Update your budget
Having a plan for your money is essential — especially when you’re saving toward an important goal like moving into a new apartment. Updating your personal budget might help you find ways to reduce your monthly expenses and accomplish your financial objectives even faster.
Read more: Your complete guide to budgeting
Consider a roommate
Finding someone willing to split upfront moving costs with you could be a great way to get into a new apartment even faster. If you find a reliable roommate, it could also make the cost of housing more affordable on a monthly basis.
Be willing to compromise
If saving enough money for your desired apartment is proving to be difficult, you might consider renting a more affordable place. Moving into an older building, renting a place with fewer amenities, or being willing to accept a longer commute could potentially save you a considerable amount of money — both in up-front costs and in recurring rent costs each month.
Bottom line
Before you begin searching for the perfect apartment, it’s important to prepare yourself financially for a successful move. Understanding the types of up-front expenses you’ll encounter is a great first step. From there, it’s important to begin saving as much money as possible toward those future costs.
It can take time to save thousands of dollars for a new apartment. Yet using strategies like a high-yield savings account, automated savings, budgeting, and others might help you reach your goal faster.
