Can I Afford to Move Out?

The story: Alex’s first apartment math

Alex and Jade add up the full monthly cost of a studio apartment, with a long list of bills beyond rent.

1. Narrator: Alex, 19, found a studio for $1,150 a month and takes home about $2,600 a month. Example numbers.
2. Alex: Rent is less than half my pay. Easy, right?
3. Jade: What about power, internet, food, your phone, the bus, renters insurance and savings?
4. Narrator: Those can add hundreds more each month. Rent is just the first bill.
5. Narrator: Many landlords also check that income is about three times the rent. For $1,150, that’s $3,450 a month before tax.
6. Alex: With a roommate in a two-bedroom, my share could drop to about $700. That changes everything.
7. Narrator: Add up the whole month before you sign.

What you’ll learn

1. Rent is the first bill

   A full month includes rent, utilities (power, water and gas), internet, food, transport, phone, renters insurance and savings. Add them all before deciding what you can afford.

2. Roommates, alone or at home

   Living with roommates splits rent and utilities, often saving hundreds a month. Living alone costs the most. Staying home a little longer can help you save first. Each choice has trade-offs.

3. The landlord’s income check

   Many landlords want your income to be a few times the rent, often about 3×, but it varies. Rent-to-income compares the two. If you don’t qualify alone, a guarantor or a roommate may help.

   Example: $900 rent × 3 = $2,700 a month of income.

4. Cost of living varies

   The same apartment costs very different amounts in different cities. Local rent, utilities and transport all change the math. Use local numbers, not national averages.

Key words

cost of living

what it costs to live in a place each month

rent-to-income

your rent compared with your income

utilities

services like power, water and gas

Common questions

What else costs money when you first move in?

Often a security deposit, first month’s rent, application fees, utility deposits and basic furniture. Many people save for these before moving.

Remember this

Rent is just the first bill.

Try it: Price a sample move-out

1. Open the 50/30/20 budget calculator linked in this lesson.
2. Enter a sample take-home pay of $2,600 a month (example).
3. Check whether rent plus other needs fit in the needs share, using rents from a sample city.

Try the 50/30/20 calculator embed with a sample city.

Live facts

Numbers that change over time, with when they were last checked and where they come from.

• Typical local rents (Fair Market Rents, by year)

  Source: HUD User(opens in a new tab)