Can I afford it?

[snafu]

No one mentioned the need for content insurance as yet one more expense. The rule of thumb is no more than 28% of gross for accommodations - all in. Life isn't fun when you run that close to the wire. Would you leave your room mate in the lurch by going back home if income failed to meet expenses? Are you leaving parents in need if you currently pay share of cable or other utilities? What is your budget for entertainment or vacation?

If the car needed a major repair are you prepared? Do you have optional [public] transportation? How would you replenish your EF?

[wincrasher]

Of course they are not thinking at all of all the startup expenses needed for an apt - furniture, dishes, linens, etc, etc., deposits, utilities, insurance....

I'm assuming that the $450 is 1/2 the actual rent - so it's a $900 a month 2 bedroom near a university. I'd also assume that much cheaper digs can be found further away from campus. Why does your friend want to live there? If it's the partying and the boys, then you should take a pause and think it over. Better yet, talk about it with your parents.

Most folks go off on their own not being prepared at all. You are more ready than most, but have the unbelievable luxury of getting "more ready".

Welcome to the real world. It's expensive!

Good luck.

[jpg7n16]

I don't think you can afford it. It's likely too high a % of income for you.

Try this experiment out though: On the 1st of next month, I want you to open a new savings account - with $450. Each month, you must pay $450 into this account no matter what. Keep this going for 6 months to a year. (Take special note of your EF balance at the beginning and end)

Since you currently don't pay rent, this will simulate the cashflow of renting.


You will fail the experiment if either of these things happen:
1) You find that you are no longer able to save money each month
2) You find that after 6 months, your EF balance is lower than where you started

If #2 happens- it means that you didn't have enough to pay your rent, and were forced to withdraw from your EF to cover your lifestyle expenses. (aka negative cashflow = expenses are greater than income = bad)


However, if you find that you are still able to save (treat the $450 as an expense - not savings), and your EF balance grows over the timeframe, you pass the experiment and have proven that you can afford this apartment.

[littleroc02us]

Hey man,

Thanks for the numbers. I remember what it was like to be young and broke. I had three jobs and was so tired I would practically fall asleep in the darkroom at the hospital. According to the math you have $170 left after expenses. Go for the apartment as long as you find ways to split utilities, insurance, cable with a roomate. Also, get 2 more jobs, whatever it takes. You will learn invaluable lessons just by working. Lastly, don't waste your money on going out and eating out. That is ususally where it all goes. I know from experience. Work hard and set written goals. Good luck!

[nmboone]

Thanks everyone for the responses. I appreciate everyone's help. I have thought about buying all the stuff that an apartment needs. I imagine that would cost approx. $300 (hopefully at most). I lived in an apartment before years ago when I turned 18 and due to a fire in the apt. I was broke really really fast. I don't want anything like that to happen again!

Also another job would be great but at my current job I work the craziest hours! It's never the same day to day. Jobs like to have a stable person. I'm not trying to make excuses, I'm just trying to explain the difficulty of doing this.

I know for sure I'm not getting that house. But we'll see what happens in the future.