Saving for an Apartment

[heather]

I work part-time, attend college full-time and am planning on starting on saving for an apartment. I hope to get one within 5 months. On top of that, I have to get a car within about 2-3 months (only have $950 so far in the bank), have to save up also for car insurance and license plate, and I need to get a cell phone by time winter comes in 2-3 months.

Anyone have and advise?

Thanks!

[project15]

Move back home with your parents :-) Jk. I was in your shoes about 4 months ago. To get an apartment, you will need a security deposit (usually the cost of the first month's rent) and also the first months rent and possibly the last months rent for some places. That can easily add up. Maybe look for someone looking for a roommate?

Regarding the car, with $0 down and low montly payments, you can get into a lease, but we all know leasing isn't the smartest financial decision. However, if it's your only option for low monthly payments until you get more money, it may be an option that suits your needs. However, you have to have full coverage insurance in a lease. I would suggest trying to save up $3,000 for a beater car (a cheap, reliable import like a honda or toyota) and putting the minimum insurance on it.

For the cell phone, one option you can do is a prepaid phone. No contracts to sign so when you start getting more money, you can quit using that and get onto a cell plan for more luxury minutes.

Be sure to look for a job ASAP since you will need proof of employment to get approved for most of these options.

[neatdesign]

It is difficult to respond to your post because you give so few details about your situation and plans:

1) What city & state do you plan to rent an apartment in?
2) What's your monthly take-home pay?
3) Do you plan on obtaining other employment to increase your overall income?
4) Do you plan on having a roommate(s) to split the rent?
5) How much are your other monthly expenses?
6) How old are you, and how long have you been driving?
7) What kind of car do you want to buy, and for how much?

You'll be surprised at how little $950 will pay for. For instance, we pay $980/month for rent and one car payment. That does not include utilities, car insurance, car registration or personal property taxes for the car.

Once we have more information, hopefully we'll be able to give you a bit more insight.

~ Jenney

[scrava]

Look in the paper/online and see how much apartments in your area go for. 1 br, studio, 2 br if you are up to the task of finding a roommate. Then, look and see if 1 months' security is normal, 2 mos, etc.

I would try to get heat included. Tell us more about your sit and I bet we can help more.

[mbhunter]

Hmmmm ... saving up for an apartment? Can you do that?

An apartment is an ongoing expense ... it would seem you would need enough income to cover the rent, utilities, etc. Is this possible? If not, why not?

From my own experience it's a shock going off your parents' payroll (assuming you're on it to begin with). My first year in graduate school was a lesson in this. I had about $60 every two weeks left over after paying for my room. I hadn't eaten yet! So those two semesters I dipped into savings. Oh, by the way, I didn't have a car.

My shoot-from-the-hip advice would be to hold off on the apartment until you have the income. But again, not knowing the specifics, YMMV.

[heather]

Let's see. To anwer neatdesign's questions:

1. Most likely Shelbyville, Indiana, or close to it.
2. I actually just started a job and got my first pay check this past Friday. It's a part time job and I get paid every 2 weeks. And this check was $222 and I doubt I'll get any other check bigger than that unless I get lucky and a lot of hours are thrown my way. (P.S. - the job I have now ends in November)
3. If I can/have to get another job, I will. But it might be hard to fit in between this job and school.
4. I plan getting a place with my boyfriend, but right now, he isn't able to save anything up because he's trying to pay off some credit card debt.
But he's idea is that we'll have to save up at least $1,000 for the security deposit, first month's rent, food, and maybe some furniture (which he has a couch, love seat and bed already, & also, I'm gonna use my dresser and we plan on getting a place with closet space for his clothes)
5. I don't really have any other monthly expenses except for gas. And that's probably $30-40 a week, which would add up to about $120-160 a month.
6. I'm 19, about to turn 20, and have been driving for about 3 years.
7. I don't have a certain kind of car I want to buy just something that'll get me to school and work and back. The amount.... I don't know - cheap!

Oh, and also, I don't have to worry about paying for school because it's pretty much covered by financial aid.

I hope that helps!

Thanks!

[safari]

If I understood you correctly, your total income is about $450 a month, so after paying for gas, you're left with about $300. Even you save enough money for a security deposit and first month rent, how are you going to pay monthly rent going forward? What about utilities, food and all other expenses? It doesn't sound like your boyfriend will be able to contribute any money, so I don't see how you can afford a car, let alone an apartment, given your financial situation.

[pearlieq]

Originally Posted by safari

If I understood you correctly, your total income is about $450 a month, so after paying for gas, you're left with about $300. Even you save enough money for a security deposit and first month rent, how are you going to pay monthly rent going forward? What about utilities, food and all other expenses? It doesn't sound like your boyfriend will be able to contribute any money, so I don't see how you can afford a car, let alone an apartment, given your financial situation.

Yeah, that's pretty much what I was thinking too. I'm not sure if getting an apartment is really practical right now with the income you earn. You're cutting it really close. What are you going to do when your car dies or have some other kind of emergency?

Plus you said your hours are variable at your current job and the job is ending in November? What kind of money are you going to be able to count on for rent? Most places won't rent to you unless you can prove you have a job with enough income to pay the rent. They check your paystubs, run credit checks, and will sometimes even call your work to verify.

It looks like 1 bedroom apartments in Shelbyville, IN cost about $500 a month, give or take about $50. Assuming your boyfriend was going to split the rent, here's what your situation would look like:

Income: $ 400/month

Rent: $250/month
Utilities: $50/month (This would have to cover electric and/or gas, phone, TV, water, and trash. You can do without some of these, and your apartment complex may provide some of this as part of your rent.)
Gas: $120 (Based on $30/week or one tank of gas per week).

Total: $420

In this scenario you're already $20 in the hole every month and you haven't even eaten yet! Let alone paid car insurance, cell phone bills, gone to a movie with your friends, and any kind of car payment, maintenance, or repairs!!!

The other thing that you need to think about is whether it's really a good idea to move in with your boyfriend. I'm sure he's a great guy, but what if things don't work out? Anyone's who ever shared an apartment can tell you horror stories about roommates who skipped out on the rent, moved out without telling anyone, ran up huge phone bills and then disappeared, etc.

You've got to be really careful about who you move in with. Personally, I wouldn't recommend moving in with a guy unless you're engaged. It's just so easy for things to go wrong, and for you to be left to answer to the bill collectors. I'm sure you care for each other very much, but moving in is as much of a financial decision as a romantic one.

You're very smart to be considering these kinds of things BEFORE you take the plunge. I know you'll make the best decision for you!

[neatdesign]

1. Most likely Shelbyville, Indiana, or close to it.

2. I actually just started a job and got my first pay check [$222] this past Friday. It's a part time job and I get paid every 2 weeks.

Others have already touched on these, so all I'll say about #1 and #2 is, based on your income, I think you'll find yourself drowning in debt pretty quickly if you move into your own place right now.

3. If I can/have to get another job, I will. But it might be hard to fit in between this job and school.

Would you be willing to become a part-time student if you need to work more to keep up with your expenses? Are your parents willing to kick in a few extra bucks to cover you if money is tight and you can't pay your bills? (Not recommended, in my opinion.) If the answers to these questions are "No" and/or "I don't know" then you aren't ready for your own place.

4. I plan getting a place with my boyfriend, but right now, he isn't able to save anything up because he's trying to pay off some credit card debt.
But he's idea is that we'll have to save up at least $1,000 for the security deposit, first month's rent, food, and maybe some furniture.

BIG RED FLAG. If your boyfriend can't save any money because he has too much debt already, then you should NOT get an apartment with him. For starters, he has already proven that he spends beyond his means. How is he going to afford the new expenses of an apartment if he is barely keeping up with his current expenses? Secondly, you say that "his idea" is to save up $1000-$2000 for rent, deposit, food and furniture -- BUT, if HE cannot save any of his own money anyway, then who does that leave to do all the saving?? I'll give you one guess...

If you were married to him (not just engaged, but married) things might be different. But otherwise, this is a situation you'll want to avoid. It doesn't have anything to do with how nice or loving he is, or how committed you both are to your relationship. Once you introduce money and joint expenses into the mix -- ESPECIALLY when it's obviously not going to be split 50/50 -- you are just asking for trouble. Don't believe me? Watch "Judge Judy" some time.

5. I don't really have any other monthly expenses except for gas. And that's probably $30-40 a week, which would add up to about $120-160 a month.

Food? Books and supplies for school? Entertainment? Toiletries? Cleaning supplies? Clothes? Phone and internet services? Water and trash services? Electricity? Credit card bills? These are just some of the ongoing expenses one usually has to pay for when living on one's own. There are probably quite a few that aren't mentioned here, these are just for starters. If these expenses don't immediately come to mind when you think of what you'll have to pay for, then you are not ready to live on your own.

6. I'm 19, about to turn 20...

This is another reason why you shouldn't move in with your boyfriend. At this age, you should try to live independently first, even if it means with another roommate with whom you are NOT in a relationship. If you think you and your boyfriend will eventually marry and be together for the long term, then the BEST thing you can do for both yourself and your relationship is to live on your own for at least a couple of years. I know it seems contrary to how you're probably feeling, but trust me -- I speak from personal experience. If there's one thing I would probably go back in change in my youth, it was not breaking out on my own a bit when I had the chance.

However, the main reason I asked for your age was in relation to car insurance coverage. You aren't in the highest risk group, but you're pretty high up on the list nevertheless. Your young age and driving record automatically means higher premiums, even if your record is spotless. To put this in perspective, I bought a used 2001 Toyota Corolla when I was 29 years old, with a 13-year-old perfect driving record (not even a parking ticket), and it still cost me about $650/year for car insurance.

7. I don't have a certain kind of car I want to buy just something that'll get me to school and work and back. The amount.... I don't know - cheap!

"Cheap" is a very relative term, especially with something like a car. When you think about buying a car, you can't just think of the price of the car, but all the other expenses that go with it. Upkeep and maintenence, insurance, registration, title, taxes, extended warranty, roadside assistance services, parking permits, gasoline -- these should all be added into your car budget. So while the car payment itself might only be $150/month, your other expenses are going to make it WAY higher than that.

Well, I think it's pretty obvious where I stand on this issue! I just want to say that this is not a criticism of you as a person, or even of your boyfriend. I'm sure you're both great people who love each other very much. I just think it's premature for you to be moving out right now, before taking all these little nitty-gritty details -- and their potential consequences -- into consideration. I can certainly understand the draw that living on one's own has, and it's fine to do that, IF you're prepared for it. From the details you've given us, you're not ready.

~ Jenney

[Ima saver]

Wow, Jenney, you really said it all! They really should have a lot more in savings before they attempt to rent a place.

[heather]

Just so everyone knows, I'm not plannin on gettin an apartment this year. I would love to be able to in the beginning of next year, but I'll be lucky to be able to by summer of next year.

When it comes to becoming a part-time student, the scholarship that pays my tuition requires me to be full-time.

My boyfriend isn't able to save up anything right now. But he will once he is able to and when living together, he will help pay for everything.

When I mentioned monthly expenses, I meant what I have to pay for right now, not what I will have to in the future. (I currently live with my mom.)

And once again, I'm not gettin an apartment this year.

[neatdesign]

Originally Posted by heather

Just so everyone knows, I'm not plannin on gettin an apartment this year. I would love to be able to in the beginning of next year, but I'll be lucky to be able to by summer of next year.

You said in your first post, "I hope to get [an apartment] within 5 months." No mention of getting one in 12+ months. I'm sure I can speak for everyone who posted that our responses were based on the shorter timeline you provided.

When it comes to becoming a part-time student, the scholarship that pays my tuition requires me to be full-time.

That's good to know. This means that your income opportunities are probably going to be very limited, since you can't work full-time if you needed to in order to make more money to support yourself. That being the case, I would recommend not getting your own place for at least a year, if not more, to allow you time to save up for all the expenses we have listed previously -- not to mention the unexpected things.

My boyfriend isn't able to save up anything right now. But he will once he is able to and when living together, he will help pay for everything.

Again, if you both put off getting your own place for at least a year, hopefully that will give him an opportunity to save up as well. You don't say when he'll be able to start putting money aside for saving, so it might be more like 18-24 months before it would be prudent for you to move in together. For instance, if he won't be able to start saving money until six months from now, then that's just setting things up to be very difficult for you both financially if you got an apartment only six months after that.

When I mentioned monthly expenses, I meant what I have to pay for right now, not what I will have to in the future. (I currently live with my mom.)

Sorry, I thought it was obvious that the question referred to what sort of expenses you incur now, even if you don't pay for them yourself.

If your mother currently pays for ALL your expenses except for gas -- clothes, entertainment, textbooks, toiletries, etc -- then you need to start taking baby steps towards financial independence BEFORE you move into your own place. There's no reason why a 19-year-old can't pay for her own entertainment, for instance, especially if she has a job. Otherwise it's going to be a rude awakening when you set out on your own and discover just how expensive it is.

How much does it cost to pay for the things that you need and/or do each month, regardless of who pays for it?

~ Jenney

[heather]

1.) When I said that I hope to get an apartment in 5 months, that was hope. Not will. Sorry for the confusion.

2.) He'll be able to start saving before 6 months is up, for sure.

3.) When I mentioned expenses, I was thinking in terms of things a person needs, not wants. I don't have to pay for books because they were covered by financial aid. The last time I got clothes, I paid for them. And in terms of entertainment, the only person I really do anything with is my boyfriend and one of us, or both, always pays. So besides the main bills that come with a house (water, heat, house payment, etc.), I pay myself, as in if I need food all of a sudden (since I eat different food than my mom), then I'll pay for it.

Also, about the whole 'gettin a place in x amount of months' thing, a few things have come up and came to mind that have pushed the possible amount of time back. So yeah, it sucks.