Having a concrete budget is important in deciding not only if you should be renting an apartment, but also how much you are able to allocate towards rent alone.
We here at CLV Group and InterRent REIT have prepared a list of things you should consider when preparing your budget:
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Determine Your Income
First things first, you need to determine how much money you will have to cover your expenses and rent. This may include:
- The income you make from working throughout the year and in the summer
- Student loans above and beyond the amount needed to cover your tuition, books and food
- Money your parents or other family members are giving you to assist with your rent and expenses
- RESP amounts that your parents and grandparents have saved up for you to use toward your income
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List Your Expenses
Second, make a list of expenses you already have, which may include the following:
- Bills: cellphone, debts, etc.
- Transportation: vehicle expenses, insurance, public transportation costs
- Food: depending on whether or not you currently pay for food
- Clothing
- Entertainment
- Education
- Miscellaneous/Savings: make sure you leave a little safety factor for rainy days
- Other: Look into where your money goes on a monthly basis and create a spreadsheet or outline of a monthly budget that explains your current living patterns
Next, make a list of expenses that are associated with renting your own apartment:
- First and last month’s deposit
- Monthly rent
- Look at your needs and the market prices in your area for a general price
- Utilities
- Renters insurance
- Food (this expense may change when changing living situations)
- Bills (this expense may change, with common additions being cable, phone and internet)
- Laundry (both supplies and cost of machines or utilities)
- Cleaning products
- Kitchen and bathroom supplies
- Furnishing
- Decorating
- Moving expenses
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Calculate Your Net Income
Once you have calculated the above numbers, subtract all of the expenses from the income to determine your net available income. If you have a surplus, this means you will be able to afford rent. If there is a deficit, however, you will not have enough money to cover your rent and all of your other expenses. If the deficit is a small amount, you may be able to work it out if you budget to limit your entertainment, food and clothing expenses.
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Talk to Your Parents About Co-Signing as a Guarantor
If your budget indicates that you might struggle to afford to rent on your own or even with roommates, it’s time to talk to your parents or grandparents about co-signing as a guarantor. A guarantor is basically agreeing to pay your rent in the event that you cannot do so.
By creating a stable budget, you aren’t just finding out whether or not you can afford to rent your own apartment, you are actually facilitating this occurrence. Following a budget means your expenses stay in check, allowing you to have enough money for all your expenses, and rent, every month. Looking for an apartment within your budget? We have plenty of affordable options for you to choose from at CLV Group and InterRent REIT. Check out our available listings today.
