Are You Really Ready for Your First Place?

How to Prepare Financially

 Although you may feel ready to live on your own, make sure your finances are in order before you take the big step.  When determining how much rent you can afford, keep in mind that the US Housing Department recommends not spending more than 25-30% of your gross salary for rent. (i.e. if you make $30,000 you should look for apartments that run about $750/month)

 

Complete a Financial Summary (Budget) to get a good look at your financial status, debt payments, emergency fund, savings, and retirement savings.

  Next consider all the additional expenses

associated with living on your own and how they will affect your budget.

Some of the additional expenses to consider are utilities, telephone and cable bills, groceries and renters insurance. You’ll also need to budget in items such as cleaning supplies and light bulbs.

Have you put aside enough money for first and last months rent, security deposit, utility company deposits, fees for hooking up utilities, kitchen items, furniture, curtains, laundry.

  Once you’ve added everything up,

compare your budget to your income. Is your income more than sufficient to cover your projected budget? If you’re struggling to make your budget work on paper, it will be even harder to make it work in reality.

 

Even though you want to find a place that fits your budget, you want to make sure it’s in a neighborhood you like, are familiar with and feel safe in. It’s not a bargain if you live to far from friends and family or have to make a long commute to work.

How to Review the Lease

 When signing a lease, be sure to read what you are agreeing to carefully. It is a legal document and you are responsible for all the terms and requirements laid out in it. Make sure that you get your lease in writing and that you keep a copy for your records once it is signed.

If you are unsure about anything in the lease, ask the landlord. Understand what is and isn’t included in the rent.

Some apartments include heat and electricity while others don’t. Some include cable and maintenance while others don’t.

Ask about pets and roommates before committing to a space.

Make sure the lease includes a military clause.

 

Make sure the security deposit refund procedures are spelled out in your lease or rental agreement.

To protect yourself and avoid any misunderstandings, make sure your lease or rental agreement is clear on the use and refund of security deposits, including allowable deductions.

 

How a Bad Roommate Can Ruin Your Credit Score

 While roommates can save you money on rent, they can also damage your credit score if they forget to pay their half of the rent or say they will send in payment for a utility bill in your name and don’t.

The effects of a bad roommate could affect your credit and therefore your loan interest rates for years. 

Screen roommates carefully. Ask questions about habits, attitudes about cleaning, overnight guests and on-time payments. Make sure to ask about any and late payments on rent, credit cards or installment loans.

  Be prepared to pay the full rent. Have

one or two months rent in an emergency fund if your roommate moves out or loses his or her job.

 

For any bills in your name, collect your roommate’s share and then pay the bill yourself. Any late payments or eventual collection notices could go against your credit rating. One way to prevent any problems is to have your roommate set up an automatic bill pay from his or her checking account to go to you.

If you move out, get your name off of all joint bills. With your roommate’s permission, switch all utility and other bills (i.e. cable) to his or her name.

  

How to Decorate Inexpensively

  Make a list of the basic items you need and how much you have available to spend.

Hit garage sales, thrift stores, consignment shops, estate sales, eBay and craigslist. 

Questions?