A New Renter’s Guide: Understanding Apartment Living Costs

Congrats on discovering your new place. Of course, there’s a lot to be excited about when it comes to moving in. In order for you to start this new place on the right foot, it’s essential that you know your entire financial situation. 

In addition to the monthly rental payment you make, there are several other expenses you will have to include in your monthly budget. 

Read this guide as we walk you through the usual bills you’ll need to include in your budget so that you are prepared and can move in. Be confident with the assurance that you know what your expenses will be and how to budget them.

Budgeting Basics for Apartment Renters

Before we get to the specific bills, let’s discuss your budget. When we refer to your budget, it’s your financial blueprint; it shows precisely where your money is coming from and where it needs to be directed. 

While this may seem like a tricky task, your budget is your best friend for avoiding surprises and feeling much more confident in managing your money.

Start with the 50/30/20 Rule, Then Adapt

A widely used and simple strategy is the 50/30/20 rule. It suggests the following:

• 50% of your income goes to Needs (such as rent, bills, and groceries).
• 30% goes to Wants (such as eating out, hobbies, and shopping).
• 20% goes to savings and debt repayment.

If you live in an area with a higher cost of living, your rent may be consuming the entire 50% in your Needs category. This is totally okay, and you would just need to adjust the other two categories accordingly. For example, if rent is 40% of your income, then you would just have to lower your Wants to 25% if you want to achieve 20% savings.

Categorize Your Apartment Expenses

For a clearer picture, it is best to categorize your apartment costs as follows.

1. Fixed Expenses: monthly expenses that you will pay consistently every month. For example, rent and renters’ insurance premiums.
2. Variable Expenses: bills and accounts that may vary greatly or may not be paid monthly, such as your electric bill, water bill, and gas bill. You will be estimating these costs to the best of your ability.
3. Periodic Expenses: costs that are not monthly bills but happen at regular intervals. For instance, renewing your lease once a year or periodically replacing your kitchen gadget. It’s helpful to set aside a small savings plan for these costs.

Get Practical with Tools

Lastly, select a tracking method that works for you. A simple spreadsheet can work, a dedicated notebook can work, or even a budgeting app can work. Just make sure you record your expenses for the first couple of months so you can see your actual spending behavior. This real-world information is worth its weight in gold, and it allows you to adjust your budget accordingly.

What Bills Do You Have to Pay in an Apartment? A Breakdown of Common Expenses

Image Alt Text: Black Calculator Near Ballpoint Pen on White Printed Paper

Before signing a lease, it’s important to understand what bills do you have to pay in an apartment, such as rent, utilities, internet, and renters’ insurance. When establishing a budget, you should consider all the possible expenses. Here is a more detailed description of the regular bills you could find.

1. Rent: Your Largest Fixed Expense

This is probably your largest and most fixed monthly expense. Your lease should tell you the amount of your rent, due date, and method of payment, which is due each month. Pay attention to paying your rent on time, since that is key to staying in good standing with your landlord and having a positive credit rating.

2. Utilities: The Variable Essentials

Utilities are services that make your apartment operational and comfortable, but the bill you pay often fluctuates depending on your lease and location. Always verify with your landlord what utilities will be part of the rent and which utilities you will need to set up and pay for.

• Electricity: Electricity powers your lighting, outlets, kitchen appliances, and often, air conditioning and heat. The bill can soar based on the outdoor temperature, so it is best to plan on a higher monthly payment in the summer and winter.
• Water and Sewer: In many apartments, the landlord covers water and sewer fees. Some apartments will send a separate bill for the water and sewer fees, so it is a good question to ask before signing a lease.
• Natural Gas: If your stove, heater, or water heater uses natural gas, you will receive a separate bill for natural gas. Just be aware that natural gas can be a larger bill during winter because of the increase in heating.

Make sure to have a full quote of all variable expenses, especially utilities and upgrades meant to improve comfort, but can be expensive to maintain.

3. Internet and Cable: The Connectivity Bills

These services are not required, but a lot of people use them anyway. You will need to contact the providers to set up an account with that company. The internet service may be cheaper if bundled with cable TV. Nowadays, streaming services offer more options at a cheaper price. 

4. Renter’s Insurance: The Crucial Safety Net

This is one of the most crucial but often forgotten expenses. Any insurance held by your landlord will cover the building, but will not cover any personal property inside that building. Renter’s insurance will protect your possessions, including furniture, electronics, clothing, and the like, from being lost due to theft, fire, or water damage. 

Renter’s insurance will also offer liability protection if someone is injured in your home or apartment. Luckily, for the amount you’re protecting, renters’ insurance is usually inexpensive (around $15 to $30 per month in most situations).

5. Additional Recurring Fees

Finally, be mindful of these potential monthly add-ons.

• Parking: If you have a car, you may need to pay a monthly fee to have it in a lot or garage designated for parking.
• Pet Rent: If you have a furry friend, many landlords charge an additional monthly “pet rent,” in conjunction with a one-time pet deposit.
• Trash/Valet Services: Even though having trash collection and valet waste service included is typical, some newer apartment communities have additional fees for this service.

Tips for Saving Money on Your Monthly Apartment Bills

The good news is that you have more control over your expenses than you probably think. With a little foresight and discipline, you can make some solid cuts to your monthly expenses. Here’s how to keep some more cash in your pocket.

Ask the Right Questions

Most landlords use property managers because hiring Northern Virginia property managers can free up your time while ensuring your property stays in top condition. Therefore, we always recommend asking the landlord or property manager which utilities are included in the apartment’s rent when viewing a unit. 

Finding a unit that includes water, trash, or even gas as part of your rent could save you hundreds of dollars yearly. Even better, you can request to see the average amount of utilities paid from the past year’s bills for that unit to give you a good idea of what your future utility costs may be.

Tackle Your Energy and Water Usage

Given that electricity is a large variable expense, small savings on this expense can compound quickly.

• Use LED Bulbs: Consider changing your incandescents for energy-efficient LED bulbs. LED bulbs use up to 75 per cent less energy than incandescent bulbs and will last years longer.
• Unplug Energy “Vampires”: Some appliances, such as gaming consoles, phone chargers, and coffee makers, draw electricity even when off. Keep them plugged into a power strip, and switch the power strip off when it is not in use.
• Be thermostat-smart: Adjusting your thermostat 7-10 degrees for eight hours per day could save you approximately 10% in heating and cooling. It’s easy with a programmable thermostat.
• Save Water: Take shorter showers, fix that dripping faucet, and only run a dishwasher or washing machine with full loads.

Shop Around for Internet and Insurance

People sometimes set these bills to auto-pay and forget about them, which is not ideal.

• Internet: Every year, call your provider to see what promotions they have or what competitors are offering. Usually, they can drop you down to a lower rate to keep your business. Also, check if you are paying for a network speed you don’t actually need.
• Renter’s Insurance: Don’t just take the first quote you receive. Compare prices on different insurers online. Also, ask about bundling it with your auto insurance; this will almost always give you a sizable discount.

Adopt Mindful Daily Habits

In the end, it’s all about what you actually do each day. Make sure you turn off the lights when you leave a room, and take advantage of daylight (sunny or not) when possible. Also, avoid peak-time energy use if your utility company has variable rates. These very small actions taken consistently help create a culture of conservation that truly nets savings on your bill.

Conclusion

A new chapter begins with your first apartment. Educating yourself about your future bills, budgets, and saving strategies empowers you to manage your finances. 

Being prepared will allow you to change your new living space from a source of anxiety into an efficient and affordable place to live. 

Just remember, being a proactive and educated renter is the key to a successful and enjoyable rental experience. Welcome home!