Beating Broke

Personal Finance from the Broke Perspective

Living Costs to Calculate Before You Sign a Lease

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You’ve found the perfect apartment or house to rent, and you’re ready to sign on the dotted line and move into your dream home. Not so fast! Before you sign the lease, make sure you’ve calculated all your living costs, including unexpected expenses, so that you aren’t blindsided with bills you didn’t plan for.

The only thing worse than not moving into that dream space would be losing it because you can’t afford to live there anymore. Here are the expenses you need to consider.

  1. Add-Ons

In addition to your rent, you’ll have a variety of add-on expenses, depending on the lease agreement. This section might include water, sewer, trash removal and heating and cooling costs. Many landlords cover items such as water and sewer because if these bills aren’t paid in some localities, a lien may be placed on the property.

Ask before you sign whether or not trash pickup is included. It typically is in apartments, but not as often in homes and smaller units. It’s rare for a rental to include your heating and cooling. If any of these items aren’t included, ask for a typical range per month so that you know what to expect.

  1. Parking

Not all rentals, especially if in the city, come with free parking. You’ll need to either make a decision to park on the street — which is challenging when events are going on and may make your car less safe — or pay for parking, which adds to your monthly expenses.

Ask your potential landlord what the deal is when you’re touring, and look up street parking rules (if applicable) to learn more about permits, street cleaning, and winter snow removal. You may even try to use this information to negotiate the overall cost of your rent or parking fees.

That one-bedroom that was $700 per month becomes $775 per month when you factor in the cost to pay for a nearby parking lot space. Trust me, I know the pain — it’s a sacrifice I ended up making to live in a downtown center.

  1. Insurance

Keep in mind that you’ll need renter’s insurance to cover your personal belongings. While most rentals do have insurance to cover the structure itself, it won’t cover the items you own. You must secure a separate policy. Rates will vary depending on the area where you live and how much coverage you need.

The average cost of renter’s insurance varies by state, but nationwide is about $187 per year. While that isn’t a huge amount of money, if you’re on an extremely tight budget, it could make or break you.

  1. Unplanned Expenses

Don’t forget to budget in a miscellaneous or emergency fund. Things will happen that you didn’t plan for. Perhaps you got a parking ticket because you didn’t realize you couldn’t park in that spot (I made this mistake too many times when I first moved). Maybe your car needed a repair unexpectedly.

A good rule of thumb for those getting their first apartment is to first save up a $1,000 to $2,000 emergency fund. This amount should cover most minor repair bills or the little things that happen that you didn’t plan for. Of course, you’ll also need all the typical deposits and first and last month’s rent on hand as well as money to pay deposits for utilities.

  1. Pets

If you have a pet or plan to get one, you should know that most apartments charge a pet deposit and small monthly fee to cover any damage potentially caused by that pet. Occasionally, you’ll find a rental that doesn’t charge this fee, but it’s rare.

You should also budget for damages your pet might cause. For example, if your cat claws up the carpet, you’ll want to get it repaired so that you don’t have to live with frayed carpeting the entire time you rent. Plus, it will be cheaper for you to make the repair than trust the landlord to fix the problem for a reasonable fee.

  1. Flakey Roommates

Perhaps you’re ready to move out, but you need a roommate in order to afford living on your own. The problem is that some roommates are flaky and don’t pay their share of the bills in a timely manner or sometimes ever.

If your name is on the lease, you should protect your living situation by having the other person sign an agreement. If they don’t pay their share, you may have to ask them to leave so that you can get a roommate who will share the bills. Prepare for this scenario by setting aside extra funds to cover your roommate’s portion for a couple of months if needed.

Before You Sign the Lease

These issues are all factors to consider before you sign the lease and take the leap into paying for that place you’ve always dreamed of. Renting can be a positive experience or a horrendous one, and planning ahead helps smooth the edges to make it as good as possible.

Top Money Saving Tips for Home Essentials

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Furnishing your home is something that can end up costing you a small fortune if you let it. The problem is that we are constantly bombarded with advertising about items that we simply have to have in our homes. The fact is that you do not have to spend a lot of money to make your home look good, and turn it into a comfortable place to live.

There are ways that you can save money on home essentials. Even larger items can be purchased more affordably, if you are prepared to put some time and effort into the process. Let’s take a look at some of the ways in which you can furnish your home more affordably.

Re-using and making yourself

All too often we throw things out, just because they have started to look a little worse for wear. Have you ever thought of simply putting items to a different use? Doing so is good for the environment, and for your bank balance. For instance, creating pillow covers is just one of many uses for old curtains. Upscaling items you already have can be a great way of giving a fresh look to your home.

Buying second hand

You do not always have to buy new items for your home. You can pick up some great bargains in second hand stores, and at auctions and garage sales. Remember that you should always haggle over the cost. You will usually be able to get a reduction on the marked price. You may even want to hold a garage sale yourself, so you can make some extra cash to buy items for your home as well as getting rid of things you no longer need. This means that you end up spending less from your household budget.

Doing your research

There are some things that you would not want to purchase second hand, such as a mattress for your bed. When you are buying a mattress you need to know that it’s going to last and that it’s hygienic; you cannot do this if you buy second hand. This does not mean that you cannot get a good deal when buying a new mattress, or other home essentials. You just need to do your research, using sites such as https://www.thesleepjudge.com/best-memory-foam-mattress-reviews/ so that you ensure you get the best value for your money.

Planning ahead

One thing that we all tend to be guilty of sometimes, is buying at the last minute. This is not a good idea. If you know that you are going to need an item, give yourself plenty of time to make a purchase. This gives you chance to look around and get the best deal, instead of having to pay an inflated price because you are desperate.

It’s also a good idea to think ahead generally. There is nothing wrong in shopping during the sales in January for essential items for the following Christmas. You should spend time looking at sales and offers on a regular basis, although it’s important that you do not buy just for the sake of it. Remember, this article is all about saving money on essential items.

There you have it, several ways that you can save money but still get those home essentials that you are looking for.

To Grow Wealthy, Stay Where You Are

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When I was little, I devoured the Little House on the Prairie series.  I felt bad then for Ma and Pa.  I felt bad for the way they struggled financially, facing setback after setback.  I felt bad that they always had to move just as soon as they were settled.

But then I read the books again as an adult.  Then I read them one more time to my daughters.  Now I realize, as much as Pa was a loving father, he was responsible for a lot of his family’s financial hardships.

Life in Wisconsin was good for them.  But once Pa got the itch to go west, his family never had a stable environment.  They never got more than a few years into getting settled and making a life for themselves before they moved again.

Does Moving Now Cause the Same Financial Difficulties?

Grow Wealthy
Grow Wealthy by Staying Put?

Most people would argue that life was different then, and moving around now doesn’t cause as much financial hardship, but as someone who recently completed a 2,000 mile move, I would disagree.

My husband and I had lived in Chicago for 14 years before we made the move last July to Tucson, Arizona.  We went for my husband’s work and because the move would give us a lower cost of living and a pay raise for my husband.  On paper, everything looked good.

We foolishly thought we’d stay for two to four years.  Now, I’m not sure we should move so soon if we want to prosper financially.

Even though my husband’s employer paid for the move, we still had many expenses like setting up the utilities and paying deposits on them, buying a few new pieces of furniture, etc.

Breaking Even and Getting Ahead Takes Years

We bought a house when we moved here, knowing that we weren’t sure how long we’d stay.  We’ve had our mortgage for 15 months now, and in that time, we’ve paid down $4,300 on principal.  Our home has increased just $1,100 in value during that time.  That gives us a cushion of about $5,400, but I’m guessing if we were to sell our house next year (which would be two years that we’ve lived here), we’d be losing money thanks to realtor fees.

We’ve also just reached the point where we’ve started to discover ways to save money in our new city.  Now I know where the cheapest places are to buy groceries, secondhand clothes, etc.  Our first few months here we spent much more than we normally do on groceries because I didn’t know which stores offered the best deals.

We also have finally found decent doctors and dentists.  Our first few months here, we found out my daughter need 6(!) cavities filled.  We had to go to four different dentists before we found one that we liked and could trust.  All of those different visits cost us a little less than $200 out of pocket, and that was before her cavities were even filled.

Of course, I’m not saying never to move.  In our case, the decrease in cost of living and my husband’s raise made it possible for us to own a house, which we couldn’t afford to do during our 14 years living in Chicago.  However, the whole story isn’t just on paper.  When you move, there are many incidentals that add up.  Moving repeatedly can cause you to struggle financially.

It’s no surprise to me that the only time in life when Pa and Ma flourished financially was after Ma put her foot down and refused to move from DeSmet, North Dakota.  Without the constant moves, they could finally get established and become comfortable financially.

How often do you move?  Do you agree that frequent moves are detrimental to your finances?