How To Budget for an Apartment

Fees and Expenses To Include in Your First Apartment Budget

how to budget for your first apartment: rent, renter's insurance, utility deposit, natural gas, security deposit, electric, water, administration fees, internet and cable

The Balance / Bailey Mariner

Creating a budget to rent your first apartment can be a little tricky, especially if you're also new to managing your money. Maybe you just graduated from college, got your first full-time job, or have some friends you are planning to move in with.

No matter your personal situation, you may feel overwhelmed by the inevitable spending you will be doing, especially when it comes to paying rent. However, there are many steps you can take to lower costs enough for your budget to accommodate your living arrangement. Learn how here.

Key Takeaways

  • To budget for an apartment, you'll need to find out the costs for your rent, insurance, food, transportation, entertainment, and possibly utilities.
  • Ask your landlord about any miscellaneous fees, either one-time fees or ongoing, monthly costs, that will affect your expenses.
  • Splitting an apartment with roommates can bring your costs down considerably.
  • If possible, it's a good idea for your rent to be no more than 30% of your income.

Importance of Budgeting for an Apartment

Depending on where you live, you might find that renting is more expensive than you originally anticipated. Or perhaps you discover that your salary doesn't get you as far as you had hoped.

Either way, it's important to know how to budget for your first apartment or living situation, whatever it may be. With a proper plan in place, you won't be spending more than expected, and you will have more funds for other things.


If you don't plan ahead for the price of rent, you may end up breaking a lease, which can hurt your credit score. There are legal consequences of breaking a lease, too, including the possibility that your landlord would sue for breach of contract.

How To Start Your Apartment Budget

The following process will guide you in starting your first budget:

  • Figure out your monthly income.
  • Calculate all your monthly expenses.
  • Subtract your expenses from your income to see what's left.
  • Give yourself a small buffer.

If it's your first time living on your own without any financial help, you might have to adjust your expectations and numbers a few times to make them realistic. You likely didn't have to deal with the same expenses during college or while living with your parents, so give your best estimate for what you'll spend on each item. For example, you'll need to estimate how much money you'll spend on groceries, gas, entertainment, and insurance.


Budgets aren't set in stone and can be modified to reflect your actual living expenses. You can change your budget after paying a few months of expenses once you've compared your actual spending to your forecasted spending.

How To Account for Living Expenses

Finding an apartment that includes utilities in the rent can simplify your budget. However, this option isn't always available. If utilities such as gas, electric, and water are not included in the rent, you will need to factor them, along with other common living expenses such as renter's insurance, into your apartment budget as follows:


This amount should stay the same each month for the duration of your rental contract unless you get a monthly rental agreement, which is not binding but also doesn't prevent rent increases. In addition, most rental agreements require at least one to two months of a security deposit, so be sure to account for that, as well.


Tenants typically pay for this utility. Because you're in an apartment, your electricity bill should be fairly small each month. If you miss any payments, the utility company can turn off your electricity until all fees have been paid.

Natural Gas

Gas is often paid for by the landlord and is not typically expensive. However, if you are responsible for this utility, make sure you are able to make the monthly payments, as the utility company can easily turn off your heat and hot water for the money owed.


Landlords also often pay your water bill. However, in certain cases, you may need to pay for this utility, and you want to be sure you can make the monthly payments.

Internet and Cable

You'll be responsible for this charge, and you may be able to get a bundled service from your cable or cellphone provider at a lower rate. Depending on your apartment complex, you may have to pay an installation fee. Make sure to inquire about this fee when shopping for a provider. In addition, cable may be optional if you don't watch much television. Consider streaming services as a cheaper option if you don't watch cable channels often.

Miscellaneous Fees

Also, be aware of these common fees that many apartment complexes and landlords charge:

  • Pet fees
  • Garbage pickup
  • Pest control
  • Parking
  • Storage/garage
  • Administration fees

Not all apartments come with these fees. However, it's a good rule to ask if they do. Some fees may occur on a monthly basis, while others may be a one-time charge.

You might find you can afford the monthly rent without an issue, but the upfront costs to move, such as security deposits, renter's insurance, and administration fees, seem overwhelming. To get a realistic picture of what you can actually afford and to avoid any surprise charges, you should also include these expenses in your budget.

Security Deposits

In addition to paying the first month's rent, you will likely need to pay a minimum of one month's rent as a security deposit. If you use a broker, you might have to pay them another month's rent as a fee. For example, if you rent an apartment that costs $1,000 per month and you use a broker, you would have to pay $3,000 upfront. Even without a broker, you would need to pay $2,000 upon moving into your apartment.

Some places may give you a break on the security deposit. Instead of a traditional deposit where you get your deposit back as long as there's no damage, you might be able to make a non-refundable deposit for a much smaller amount, like $175.

If there are damages to the apartment that exceed that amount, you may be on the hook for those at the end of your lease. If you agree to this non-refundable option, make sure you save a little money each month in case you are charged an additional fee at the end of your lease.


If you have pets, you might also have to pay a deposit for them. This amount is typically much smaller than the monthly rent, but it should be included in your budget.

Renter's Insurance

This covers all your belongings in your apartment in case of theft or certain types of damage. Renter's insurance is usually fairly low-cost. You can cut the cost even more by bundling this insurance with your car insurance coverage if you have a vehicle. You may also be able to get multiple quotes for renter's insurance to compare costs.

Many management companies require that you have proof of insurance before you move, and it's a good idea to insure your belongings regardless. Renter's insurance is usually $10 to $20 a month, depending on the area you live in and your type of apartment. If you have a car, ask your car insurer if they offer this coverage, as you might get a bundle discount.

Utility Deposits

Some landlords require that utilities be in the tenant's name. Therefore, you may have to pay a deposit for service, especially if this is your first time paying utilities. Deposits can range from $70 to $150, but as long as you pay your utilities on time, you should receive a refund when you move out. You may have to wait a few months to a year. If you continue service with these utility companies elsewhere, you can expect to receive a credit on your statement instead of a refund payment.

Administration Fees

If you want to apply for an apartment, the management company will likely need to run your credit and conduct a background check before it's time for you to move in. You typically have to pay an administration fee for this service of about $100, although some companies will waive the fee if they're offering a special.

How To Keep Apartment Costs Down

If the rent for the apartment you want is too expensive, look at some factors that could affect your costs:

  • Living in a studio or a basement apartment is typically cheaper than living in a one- or two-bedroom apartment.
  • Living near a city center is going to cost more than living on the outskirts or suburbs of the city.
  • Living far away from your place of work or social life might be less expensive, but it could leave you with high transportation costs.

Weigh the pros and cons of location and housing to determine an acceptable situation that can accommodate your budget and offer the quality of life you want. For example, living near your job or in the city could be a strategic decision if you can give up your car and all its expenses.


Consider living with roommates when possible, as this can reduce the costs of living expenses significantly. For example, if you had two roommates, you'd be splitting monthly cable three ways instead of paying for it all yourself. If you don't have close friends in the area, consider looking for roommates through community Facebook groups of the area you are planning to live in.

How Much Rent Should You Pay?

There's a good rule for rent that states your monthly rent shouldn't be more than one-third of your monthly income, and many apartment complexes and landlords follow this rule. For example, if you earn $3,000 a month, you should be able to qualify for an apartment that costs $1,000 a month.

The reasoning behind this rule of thumb is that by capping your rent payment at 30% of your monthly income, you'll still have plenty of money left to cover other living expenses and to work toward your financial goals.


Deciding how much to pay in rent is not always a one-size-fits-all situation. Be sure to take all factors into consideration before deciding how much of your income will go toward rent.

The Bottom Line

Consider your options and take all of the fees into consideration when choosing an apartment. The location and style of the apartment you are interested in will vary, so it's important to note all the fees when making comparisons. For example, one apartment may have a lower base rent but higher monthly fees, making it less of a deal.

Run all the numbers, ask questions, and start saving month-by-month for those initial move-in costs. If you do, you'll be ready to move before you know it.

Frequently Asked Questions (FAQs)

What do you need to rent your first apartment?

During the application process, you'll likely be expected to provide identification, a Social Security number, and pay stubs from your job. You may also be asked for a bank statement. Since first-time renters typically have sparse credit histories and relatively low income, they may be asked for a referral letter from a family member or employer. A co-signer may help alleviate concerns if you can't provide any of this information, for instance, if you're a full-time student without regular paychecks from a job.

What do you need to buy for your first apartment?

You may already have some basic furniture from your room back home, but you still have plenty to buy to furnish your first apartment. You'll likely want small kitchen appliances, dishes, and silverware, for example. You may also need to buy more wall decorations, house plants, or shelves. And don't forget the necessities, such as cleaning supplies, a first-aid kit, and linens.

What are some questions to ask the property manager when looking for your first apartment?

Depending on the property, you may want to ask about the nearest grocery stores, shopping centers, and other places you'll regularly visit. You may want to ask about available amenities and the noise level in the complex or neighborhood, especially on weekend nights. Also, find out about the process for having repairs handled. Nearby highways and public transit routes can also help you decide on an apartment.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Experian. "Does Breaking a Lease Affect Your Credit?"

  2. Commonwealth of Massachusetts. "The Attorney General's Guide to Landlord and Tenant Rights."

  3. Automated Housing Referral Network. "Pet Deposits: Your Rights and the Law."

  4. Allstate. "Is Renters Insurance Required?"

  5. Federal Trade Commission Consumer Advice. "Renting an Apartment? Be Prepared for a Background Check."

  6. Joint Center for Housing Studies of Harvard University. "Measuring Housing Affordability: Assessing the 30 Percent of Income Standard."

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