When looking to rent an apartment, one of the most important factors to consider is your financial readiness. Renting requires more than just paying the monthly rent – you also need to budget for a security deposit, utility deposits, moving costs, renters insurance and basic furnishings. Having enough money saved can make the transition into your new rental smooth and stress-free.
How much do you need for a security deposit?
Most landlords will require 1-2 months’ rent as a security deposit when signing a lease. This deposit is held during your entire tenancy, and acts as a type of insurance for the owner. If there is damage beyond normal wear and tear when you move out, the landlord can use your security deposit to cover repair costs. When you move out, any unused portion of the deposit will be returned to you.
Knowing this, you should plan to have at least the equivalent of 1-2 months’ rent available for a security deposit. In expensive rental markets, this can mean saving up several thousand dollars or more. Be prepared for this cost before starting your apartment search.
Average security deposit costs
| Monthly Rent | 1 Month Deposit | 2 Month Deposit |
|---|---|---|
| $1,000 | $1,000 | $2,000 |
| $1,500 | $1,500 | $3,000 |
| $2,000 | $2,000 | $4,000 |
| $2,500 | $2,500 | $5,000 |
First month’s rent
In addition to your security deposit, most landlords will require you to pay the first month’s rent when signing the lease. Therefore, you need to have at least 2-3 months’ worth of rent ready when starting a new rental. If you are relocating from out-of-town, plan ahead to have these funds available.
For example, if rent is $1,500 per month, aim to have $3,000 – $4,500 available to cover the security deposit and first month’s rent. Having this ready will allow you to secure the apartment you want quickly, without scrambling for funds.
Utility deposits
When you start new electric, gas, water, internet/cable accounts, utility companies often require a deposit from new customers. This deposit ranges from $50-$500 in most cases. The deposit is held until you establish a good payment history, then refunded back. However, it’s an upfront cost when transferring utilities into your name.
Call utility providers in advance to inquire about deposit costs in your area. Factor these amounts into your budget. Having $200-$300 available per utility account is a safe buffer when transferring services.
Typical utility deposit costs
| Utility | Typical deposit |
|---|---|
| Electric | $200 – $300 |
| Gas | $75 – $150 |
| Water | $50 – $100 |
| Internet/cable | $50 – $100 |
Moving costs
The costs of physically moving your belongings into the new apartment can add up quickly. If using professional movers, costs range from $100-$150 per hour based on location and amount of items. Even renting a truck yourself and moving with friends will incur rental fees, gas and potentially pizza/tips for helpers.
A moving budget of $500-$1000 is typical for local/short distance moves. For long-distance moves, especially with full-service movers, moving costs can be much higher. Research options and get estimates before budgeting the amount you may need.
Average moving costs
| Moving type | Average cost |
|---|---|
| Local move (under 50 miles) with rental truck | $200 – $800 |
| Long-distance move with rental truck | $800 – $1,500 |
| Professional movers, local | $500 – $1,500 |
| Professional movers, long distance | $2,000 – $10,000+ |
Renters insurance
Renters insurance is essential for protecting your belongings from theft or damage. Most landlords will require you to have an active policy. Renters insurance costs $15-$30 per month on average, depending on factors like location, amount of coverage and deductible.
When budgeting, you may need to pay 6-12 months of the premium upfront. Verify the policy term with insurance companies and factor the lump sum amount into your calculations.
Average renters insurance costs
| Dwelling type | Average monthly cost |
|---|---|
| Apartment | $15 – $25 |
| House | $25 – $50 |
| Condo/townhome | $20 – $35 |
Basic furnishings & supplies
Unless your new rental is fully furnished, you’ll likely need to purchase basic furniture and household items. Shopping for everything at once can be overwhelming and pricey. Create a budget for “move-in” costs based on your needs and interests.
Furnishings may include a bed, couch, table/chairs, dresser, TV, linens and kitchen supplies. You can find quality budget-friendly furniture at stores like IKEA or thrift shops. For a 1-2 bedroom apartment, plan on $1,000-$3,000 for basic furnishings. Spread out purchasing over time to ease the financial impact.
Estimated costs for apartment setup
| Item | Estimated cost |
|---|---|
| Couch + chair | $300 – $700 |
| Bed | $150 – $300 |
| Kitchen table + chairs | $150 – $350 |
| Dresser | $100 – $250 |
| TV | $300 – $1000 |
| Cookware set | $75 – $300 |
| Dishes/glassware | $50 – $150 |
| Bath towels | $50 – $100 |
| Bedding/linens | $100 – $250 |
| Small appliances | $100 – $400 |
How much total savings will you need?
Based on typical costs, you can expect to need:
- 1-2 months’ rent for a security deposit
- First month’s rent
- $200-$500 per utility deposit
- $500-$1500 for moving expenses
- 6-12 months renters insurance premium
- $1000-$3000 for basic furnishings
Add up the specific estimated costs for your situation. As a general guideline, plan to have a minimum of $5,000-$10,000 available when planning to rent an apartment.
Having this recommended buffer can prevent you from falling short when you need to put down deposits or cover unforeseen costs around moving.
Recommended minimum savings by apartment price
| Monthly Rent | Minimum Recommended Savings |
|---|---|
| $1,000 | $5,000 |
| $1,500 | $7,500 |
| $2,000 | $10,000 |
| $2,500 | $12,000 |
| $3,000 | $15,000 |
Tips for saving up
Reaching the recommended savings goals takes planning and discipline. Here are some tips to help you save for your apartment:
- Start saving early – Set up automatic transfers to build savings over time
- Reduce expenses – Cut back discretionary spending each month
- Boost income – Pickup side jobs or gigs for extra cash
- Live below your means – Limit spending to only essentials
- Track savings goals – Watch accounts grow using spreadsheet or app
- Save windfalls – Use tax refunds, gifts or bonuses to pad savings
Alternative options if funds are low
Coming up with $5,000 or more in cash is not easy for many. If your savings are falling short, consider these options to cover costs:
- Ask about payment plans – Some landlords/utility companies allow deposits to be paid over 2-3 months rather than upfront
- Use credit card rewards – Cash in points for statement credits to pay deposits or other costs
- Borrow from retirement – 401k/IRA loans allow access to funds without penalties
- Personal loans – Banks or online lenders offer installment loans for this purpose
- Family assistance – Ask relatives for help with interest-free loans or gifts
Explore all options if your savings is coming up short for apartment costs. With some creativity, you can likely find ways to cover the gaps.
The bottom line
Ultimately, the amount needed to comfortably rent an apartment varies based on your specific situation. However, as a general rule, having $5,000 – $10,000 available can ensure you cover initial costs without straining finances.
Give yourself plenty of time to accumulate recommended savings for renting. This will set you up for a smooth transition into your new home.
