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What Can You Afford in an Apartment?

One of the most important decisions a renter will have to make is determining how much apartment they can afford. This choice will influence several factors, including the size and location of the potential apartment, as well as the types of amenities provided. Those who want to rent an apartment must consider all of their current expenses about their monthly cash flow.

They will also need to consider whether they can make changes to their current budget to make a larger or better-located apartment more affordable.

What Can You Afford in an Apartment
What Can You Afford in an Apartment

Take into account all of your expenses

Renters should carefully consider all of their monthly expenses about their monthly income when determining how much apartment they can afford. Utilities such as gas, water, and electricity, telephone, cell phone, Internet services, cable television, car insurance, renter's insurance, gas for the car, cost of commuting to work, groceries, and other incidental charges are examples of expenses. Subtracting these expenses from the renter's monthly income gives them an idea of how much money they can afford to spend on rent each month. Renters should also consider deducting an additional amount from their monthly income to allow them to save money each month.

Expenses for entertainment, such as dining out, going to the movies, or attending cultural events, should also be considered. This category should include movie rentals as well. Consideration of these expenses is required because otherwise, the renter may not allot a portion of their budget for such purposes and may be unable to participate in previously enjoyed leisure activities.

Is There Room for Growth?

When reviewing the monthly budget, renters should consider whether there is room for improvement in their current financial situation. A renter, for example, may discover that they can reduce their monthly bills by obtaining both their car insurance and renter's insurance from the same insurance carrier. A customer who uses the carrier's services for more than one type of insurance may be eligible for a discount. Similarly, there may be an opportunity to save money by bundling services such as phones, the Internet, and possibly even cable television.

Consider entertainment costs as a source of financial improvement. If a renter currently eats out for dinner on both Friday and Saturday of each week, they may want to consider limiting these dining experiences to only one night per week, or even only one night every other week. This can result in substantial cost savings, allowing the renter to afford a more expensive apartment.

Cell phone and cable television bills are two other areas where renters can sometimes save money. Examine your cell phone bill carefully. If you don't use all of your monthly minutes, it might be worth switching to a plan with fewer minutes. This would reduce your monthly bill without requiring any sacrifices on your part. Cable television is one area where sacrificing could result in more monthly cash flow. Renters who pay higher fees for premium channels may want to consider dropping them. All of these small changes in monthly spending can contribute to the renter being able to afford a more expensive apartment that may be larger or in a better location than the apartment they would be able to afford if no changes were made.

Is It Necessary to Improve?

Although cutting unnecessary expenses is always a good financial strategy, renters should consider whether this is necessary for their particular rental situation before making drastic changes. After determining how much money they can afford to spend on rent, a renter can begin looking for available apartments in that price range. If the renter is content with the options available to them at this time, there may be no need to make financial adjustments. If the renter is dissatisfied with the options available, financial changes and stricter budgeting are required.