I'm 27M. I currently make 19.50/hr (full time), soon likely to be increasing to 21/hr. Living at home is starting to weigh on me and I am getting to the point where I am ready to get out there on my own two feet, and I found a beautiful apartment that I love that could be mine for $1,080/mo, and it feels like the answer I've been looking for.
I know that I could afford this apartment, especially after I get my raise, but I want to make sure it's wise and there's nothing I'm missing. I have 2.5k saved up and a good reliable car, and relatively minimal debt that I'm working on paying off each month (mostly in the car.) All of my fixed expenses each month total up to $1,090 (not counting this apartment, if I were to go for it.)
This apartment just feels like a fresh start in a way I haven’t felt in a long time. I don’t want to romanticize it or make a decision based purely on emotion, but I also don’t want to be so cautious that I never move forward. Just need some advice on whether or not to take the leap.
Can I afford this apartment?
byu/FreeHotdogMandate inpersonalfinance
Posted by FreeHotdogMandate
18 Comments
How much is the independence worth versus your financial opportunity?
Only you can answer that. You can afford it, but every month is a little further from owning if that is your goal.
If you can tough it out a few more months and build your emergency fund you’ll be in a better spot.
Assuming $2200 including all your expenses, you want to aim to have a minimum of $6600, say $7k for a nice round number. I’d build that buffer which should only take a few months at your income/expense ratio if you’re diligent
You’re probably making ~$2500/month currently. If your fixed expenses are $1,090, that leaves you with $1410 left over per month. Now if you were to rent, that’s $300 left over each month. But it’s likely your fixed expenses will increase -> utilities, internet, groceries, anything to furnish your apartment etc. Even with your raise, that’s only an extra $200/month. It’s nice, but not a windfall.
It also depends what your fixed expenses are. $1000 in fixed expenses on your current wages seems like a lot for a single person living at home, especially considering you only have 2.5k saved up. Are you saving any money in that? If not, that should be a priority. Check out the wikis such as the Common Topics [https://www.reddit.com/r/personalfinance/wiki/commontopics/](https://www.reddit.com/r/personalfinance/wiki/commontopics/) or PF based on age [https://www.reddit.com/r/personalfinance/wiki/index/](https://www.reddit.com/r/personalfinance/wiki/index/)
And I guess to directly answer your question, you *could* afford it but you’ll be scraping by and really not have or be able to build any sort of financial safety net with all your expenses (apartment, fixed expenses, etc) on your current wage.
Looks like you would have $170 left over each month.
((19.5×40×4)×.75) – hourly wage * 40 hours a week * 4 weeks in a month *.75 which accounts for taxes
I calculated your take home pay (net) to be 2,340
1080 apartment
1090 other expenses
Does “other” include savings? Groceries, going out?
Are you saving for retirement?
What’s your take home pay after taxes, health insurance etc.? Are you saving for retirement in a 401k? Are you saving beyond that after your paycheck?
How much of your own food do you pay for now? If it’s not all then that’s gotta be factored in. Then factor in utilities (Heat, electricity, and you’ll likely want a home Internet hookup) Some rents include heat but they will advertise that if they do.
It’s a stretch because with the raise after taxes you gonna be around 26-2700/mo? If you have access to overtime whenever you want so you can further increase that income I’d say yeah do it
or if you’re comfortable with around 50% of your income going towards rent, go ahead if it’s for your sanity, but know that it isn’t wise to do that, especially with only 2.5k (I’d want at least 5k) saved.
Wise thing is to have a roommate and split the bill putting you around (<800/mo) if you must get away from home but I know that isn’t always a desirable idea. Personally, I don’t wanna live with one, so I’d be willing to take a riskier path with the understanding of what I’m getting myself into.
Ideally housing shouldn’t be more than 25% of your income so it’s a little much, especially when considering you’ll have to get stuff for the apartment and you should get renters insurance plus you’ll have utilities. Might be better to get a roommate to reduce your rent.
What is your net (take home) monthly income? Around $2,500?
> I have 2.5k saved up
You should save up a lot more before you move out. You’ll have to pay your first month’s rent, a security deposit, and any fees/deposits required to set up utilities in your name. It would be smart to save up a six month emergency fund before you move out, because you won’t be able to save much once you are paying for rent and utilities.
> All of my fixed expenses each month total up to $1,090
What are these expenses? Are you including irregular spending on things like vehicle maintenance and repair, healthcare, clothes, gifts for others? You’ll probably need to find a way to reduce these to afford $1,090 in rent, plus utilities, without living paycheck to paycheck.
Brother, don’t rent an apartment without having an emergency fund. Have 6 months, 7k USD in your situation, saved in case you were to lose your job.
After the emergency fund is complete, then yes, get your own apartment brother.
Not yet. Emergency fund is too small. Rent a room instead. Get roommate(s).
Sorry but this will be a poor financial decision IMO. Others have already done the math.
You might be able to *pay for* the apartment but you can’t *afford to* with your current income.
With that salary I think you need a roommate. A small obstacle could ruin the plan. Miss a week of work due to illness. Car repair. Etc.
You need to find a different apt and get a roommate. Get that rent down and split the utilities.
Nope, you are just asking to live paycheck to paycheck.
Not only do you need first month, next months rent and a security deposit you’ll also need extra cash to furnish the place (even if it’s just necessity it’s still going to cost you a bit for bare essentials). Paycheck might even take a hit if you need to take days off to move depending on what you are bringing.
You need to save up at least 5k (10k is more recommended so you have an emergency fund after everything else) and I highly recommend having your car paid off.
Set a minimum percentage of your income that you’re always going to save and invest, no matter what. 30% (total, including retirement withholdings like a 401k) is a solid number. Save it first, by transferring money out of your checking account and into your savings and investment vehicles right on payday, every payday.
Can you afford to move out and pay all your bills on what’s left of your income after you save? That answer answers to your question too.
CN you get out of that car? Payment and insurance are high for what you make. If you could cut those down then maybe.
It might be a lot, but have you considered a second job? It’s the route I took and it sucks at times, but I’ll be apartment ready by May ’26.
I make $23/hr full time by day and $21/hr 25-30hrs a week at night at ups. That $300 paycheck weekly is the difference for me and well worth the aching shoulders and lack of sleep.
I had a decent job at 20 making 80k, but company went bankrupt and I lost everything due to poor financing and no emergency fund. I’ve been building back slowly since ’23, and aim to be out of the basement I’m renting and into a proper apartment
Doing the math, your expenses are a little under half your income, and rent alone would eat up the rest. Independent living is pricey as are the first few months spent furnishing and buying all the small things(kitchenware, etc) aim to have your rent be 30-40% of your income
TLDR a part time night gig(UPS/AMAZON) can expedite your timeline