Moving out on your own for the first time? It's an exciting and scary thought to contemplate. Decorating your own apartment, having privacy and inviting over whoever you choose are the fun parts. But, juggling bills and rent is the snag in a perfect plan. To make sure you get your bills paid and enjoy life at the same time, it's smart to create a budget. Check out these easy steps for planning your first budget.
You need to start budgeting before you even begin to think about an apartment search. You don't want to end up in an apartment that you can't afford after you've signed the lease. So, look at your income and how much money you have saved for a deposit and first month's rent. This will help you decide on how much apartment you can afford. You should also factor in how much furniture and moving expenses will cost.
Now that you know what your rent will be, you need to make an estimate of how much you will spend on monthly expenses. Some areas that you need to list on your budget in addition to rent include: food, transportation, utility bills, entertainment and other expenses (health insurance, car insurance, student loans, gym memberships, debt, etc). The picture is of a sample of a budget. These numbers are hypothetical. The items and costs on your budget will vary depending upon where you live and what utilities you are required to pay. To make these estimates, research rates in your area and ask friends how much their utilities cost them.
Once you've made the estimates and totaled up your monthly expenses, subtract those expenses from your monthly income. Two things will happen. You will either have leftover money, which you can save, or you will be left with a negative number. If the number is negative, you need to examine your budget to determine if you can afford living alone on your income. You may need to find a roommate to split costs, find a less expensive apartment or cut luxury items out of your budget.
Now put your budget into action. During the month, keep your budget in mind and try to stay within its limits. If you find that you can't, it's time to move on to the next step and revisit your original estimates.
After a month goes by, you need to reassess the budget that you made. Get all of your bills together and see how much you actually spent and compare it to your estimated budget. You may have set unrealistic estimates in your original budget and have to change certain items and costs.
If you spent more than you expected, look at your adjusted budget and see where you can save some money. Maybe you need to cut back on entertainment like shopping, dining or going out. Or, you may have to cut out entire portions of your budget. The first things to go besides excess entertainment include Internet and cable. If your apartment has a business center with Internet access, it may be easier for you to cut this item out.
Keep revisiting your budget. The more aware you are of your spending, the more control you will have over your money. A budget gives you a guideline and holds you accountable.