How to save up money for an apartment

Renting an apartment is often a smart choice. Renters aren’t responsible for duties like property maintenance or property taxes, which makes renting an appealing option. Renting is also often much more affordable than owning a home. However, it’s still important to plan carefully before renting an apartment.

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How much should you save up for an apartment?

As a general rule, you should have at least three times your rent saved before moving into a new apartment. That means that if you’re looking to rent an apartment that’s $1,200 per month, you should have at least $3,600 saved for rent. However, beyond the equivalent of three months’ rent, you’ll also need additional savings for groceries and other living expenses. Follow these steps to save and budget for an apartment.

1. Create an apartment budget

Whether it’s your first apartment or your fifth, creating an apartment budget will help you understand how much you’ll need to save and spend on one. To start, look at your income; this will determine how much you can spend on rent.

It’s wise to follow the 50/30/20 rule. According to the 50/30/20 rule, allocate 50% of your income to essentials (rent and groceries), 30% to discretionary items (like entertainment and dining out), and 20% towards savings and debt repayment (student loans etc.).

For example, if you make $3,500 per month, you can spend $1,750 each month on essentials like rent, groceries, and utilities. You can spend $1,050 on “wants” and $700 toward your savings or debt repayments.

2. Check how much apartments and utilities cost in your current area or desired city

Looking at active apartment listings in your area or desired city can give you an idea of how much you’ll need to spend each month on rent. If apartments in your area are on the more expensive side, you might need to spend longer saving up for an apartment. To ensure you budget accurately, research average utility costs in your area or ask potential landlords for estimates.

3. Cut back on unnecessary spending

When you’re budgeting for an apartment, cutting back on certain types of spending can make a huge difference. For example, going out to eat fewer times per month can help you build your savings, making it easier to afford new furniture or your security deposit. Instead, try meal planning at home to save money. It’s also wise to look at your other areas where you’re spending money each month. For example, are there any streaming services that you rarely use? If so, canceling those subscriptions can help you save money.

4. Consider getting a roommate

Two-bedroom apartments are often much more affordable than one-bedroom apartments or studios. If a one-bedroom or studio is out of your budget, look for a two-bedroom apartment and a roommate to share it with.

Diligently saving for your apartment requires patience and discipline, but the reward of having your own space is well worth the effort. Up next, learn what renter’s insurance is and if you need it.