Budgeting Tips for First-Time Renters
In all seriousness, the property management company wouldn't have accepted your application if they didn't think you were a good prospective tenant who could make the monthly payments. So, in theory, you shouldn't have anything to worry about. But, since you're new to the world of renting, there's a good chance you're in need of some budgeting tips to get you on the right path. After all, managing your money well enough to make sure you never miss a rent payment can take a lot more self-discipline than you might be used to.
Keep reading to find out some of our best apartment budgeting tricks for new renters.
1. Always Pay Your Rent First
Make this your golden rule and you're off to a good start. Your rent will likely be your biggest expense so it's wise to budget for this first. The best way to do that is to make a point of paying your rent as soon as you get your paycheck. While we wouldn't say that other bills aren't important, paying rent should be your top priority since it secures the roof over your head for another month. With that taken care of, meeting your other financial obligations should be a lot easier as you'll have a better idea of how much money you have to work with.
2. Transfer Your Rent Money to a Separate Account
Depending on when your payday is or how many you have per month, it's not always easy or even possible to sync up your paycheck and monthly rent payments. If this is the case, look into the possibility of opening up a separate account for paying bills. This practice is especially helpful if you get paid every week, every two weeks, or if you’re a freelancer or small business owner without a set payday. But it's also a good idea if you share the rent with someone else or you just need the extra discipline of a separate account. By setting aside the correct proportion of each paycheck to cover your monthly rent, paying rent on time will be a lot easier. And, while this account could be for rent payments only, you could use it to pay for all your recurring bills, from your internet provider to your insurance premiums.
3. Set Up Automatic Rent Payments
It's all well and good having a separate account for paying the rent and other expenses. But, if you have to remember to make transfers every month, it's easy to let bills slip through the cracks.
Setting up automatic payments is a convenient way to avoid ever missing a payment. It's also secure and can even help to improve your credit score. But, most important of all, you don't run the risk of incurring late fees and throwing off your budget as a result.
4. Check Your Past Outgoings
Before you set up your first apartment budget, it's a good idea to look back at your past outgoings. Seeing what you used to spend money on in black and white is a great way to get a handle on your future finances.
After all, before paying rent was a priority we bet you didn't think twice about getting coffee to go every morning or splashing out on designer sneakers. Now, while you might still be able to afford these extras, you're going to need to budget for them first.
Start by going back over old bank statements and credit card bills and try to think back to any cash payments you've made or make on a regular basis. Write all this spending down and categorize your spending into categories such as “entertainment,” “food,” or “personal care” and calculate the totals. With all your previous outgoings accounted for, learning how to budget should be a lot easier.
5. Make a Budget...and Stick to It
With a better idea of your finances, it's time to set your first apartment budget. To start, set aside an amount for your fixed expenses such as rent and utilities. You may be able to adjust some payments in the future, but for now, you need to budget for your current situation.
Next, you should look at working out how much you need to cover other expenses, such as food, transport, and clothes. For these kinds of ongoing expenses, it's often more helpful to set weekly budgets as you're unlikely to only buy gas or food once a month. Another bonus of setting weekly budgets is that you'll have to wait to buy anything more expensive, such as an item of clothing. Often, delaying the purchase can make you think twice about whether you really want it and save you money in the long run.
Using an online app such as Every Dollar or YNAB can help you visualize and track your budget and spending.
6. Find Ways to Save on Utilities
With a preliminary budget in place, you'll have a much better idea of how far your money will stretch each month. You might also find that some bills are more expensive than you'd anticipated. The good news is, while your monthly rent is a fixed amount, your other bills aren't set in stone. Take a look at the utilities and other fees you pay out every month and consider whether you could reduce these costs to best deflect the cost of your rent.
Some ways to keep your utility bills down include changing regular light bulbs for energy-efficient bulbs and adjusting the temperature setting on your thermostat by just a few degrees. You should also buy blinds for all your windows. These will help you block out heat during summer and trap heat in during winter, making it easier to cut down on AC and heating costs.
7. Cut Back on Unnecessary Expenses
Apartment budgeting doesn't have to mean the end of treating yourself to small luxuries. But it does mean being more mindful about your spending habits, as well as investigating possible cost-effective alternatives.
Start by considering how much value you get from certain subscriptions and memberships. Depending on the onsite amenities in your new apartment community, you may be able to cancel your gym subscription and use the apartment gym for free.
Likewise, you might have access to free onsite parking, extra storage space, or even entertainment facilities such as a billiards room or an outdoor dining area. With this in mind, you could rethink the way you socialize with friends, move your belongings out of storage, and maybe even save money on your car insurance if you were previously covered for overnight on-street parking.
And, even if your apartment doesn't have these amenities, there are ways to cut back. For example, instead of paying out for several streaming services, consider which you use the most and cancel the rest. Or, if you only go to the gym on weekends, find out if you can change your membership to a cheaper weekend-only membership.
8. Pay with Cash
One of the simplest yet effective budgeting tricks is to pay with cash. Yes, we know that only 41 percent of Americans carry cash on them these days and that paying by cash is seen as inconvenient. But the real issue here is that paying by card is too convenient.
Swiping a card doesn't give you the same emotional response that physically handing over cash creates. Small car payments are easy to lose track of. But, as you might have seen when you looked back at your old outgoings, a dollar here and a dollar there can soon add up.
The best way to stick to a budget is to take out a set amount each week to pay for everything and avoid using cards as much as possible. As well as making it easier to keep track of your outgoings, you can't spend what you don't have so it's much less likely you'll go over your budget!
9. Shop Around
When it comes to sticking to your budget and making the cash you have go further, shopping around can save you a lot of money. Your food bill is likely to be one of your biggest expenses after rent. But you can save money by collecting coupons, picking up in-store promo leaflets, downloading supermarket apps, and cherry-picking the best offers. Bulk buy non-perishable items like toilet paper, cleaning products, and toiletries, and take advantage of special offers on these items, as well as on canned and frozen foods.
You should also reassess how you buy fresh food and whether buying smaller packs could help you avoid waste. Or, better yet, start cooking in batches and freeze food. Having home-cooked meals ready to go saves you from having to cook every night, plus you'll be less inclined to blow your first apartment budget on takeout.
Don't be afraid to shop around when it comes to other expenses too. For example, instead of letting your insurances renew, ask if your company can reduce your premiums and find somewhere cheaper if not.
Budgeting Tips for Renters
As these helpful budgeting tips show, learning how to budget involves a lot of organization and prioritization. But first, you need to face your finances to ensure that paying rent on time every month won't be a problem.
Yes, can seem overwhelming when you see everything down on paper and have to make the numbers work. But knowledge is power, and knowing where your money goes each month as well as how to stretch it further makes apartment budgeting a lot easier.
For more information or to schedule a tour, feel free to contact us today!