umb skin1 Web Content Viewer

umb skin2 Actions

New Grad Tips: Average Living Costs

Date posted:  3/3/17 03:30:00 PM Moving out on your own means higher living expenses.

Recent college graduates, we know you want to move out on your own as soon as possible. But before you sign an apartment lease, let's go over the average living costs you can expect to pay:

Rent

Rent will be your biggest expense while living on your own, though how much you pay will depend on where you live. According to the February 2017 National Apartment List Rent Report, rents have been relatively flat over the last eight months.

But you can still expect to pay a pretty penny for a one bedroom apartment in popular cities such as New York, Los Angeles, Boston, Miami and Chicago. In those metropolises, monthly rent for a one-bedroom apartment costs more than $1,000.

Don't leave yourself with limited financial wiggle room by living in an expensive apartment in a popular neighborhood. Cut costs by living somewhere less popular and maybe even with a roommate or two.

Utilities

Utilities include:

  • Electricity.
  • Gas.
  • Water.
  • Internet/cable.
  • Garbage collection.

You're responsible for most, if not all of those utilities - and there may be even more to consider depending on your location. Expect to pay around 18 percent of your monthly income for utilities, My First Apartment stated. Exact expenses will vary depending on building type (larger apartments are usually more expensive to heat) and whether you have roommates who can share the expenses.

You can also lower utility costs by trying to find apartments where rent includes some or all utilities. While your monthly rent may be higher, you won't have to worry about individual bills for water or internet, for instance.

No matter how many utility bills you're responsible for, you should always try to cut those costs with budget-friendly best practices. Lower the electricity bill by unplugging electronics when they're not in use and keep the heat below average to make the gas bill more affordable.

Food

The days of home-cooked dinners from your parents and grab-and-go meals from the campus cafeteria are over once you graduate. It's now your responsibility to buy groceries and make meals. Cooking your own meals instead of spending money at restaurants will keep your food costs in check.

If you don't know how much to spend on food every month, check out the U.S. Department of Agriculture's Food Plans chart. The department created multiple nutritious food plans for every age group at different price points. For example, if you're a woman in your 20s​, a low-cost monthly food plan will cost you just over $200, which includes groceries and eating out. These plans are just guidelines, but they'll help you budget accordingly for food.

Renters insurance

Renters insurance is a remaining cost you need to account for. With an insurance plan, all of your valuables (up to a certain limit) are financially covered in the event anything is destroyed over a one-year period. According to Value Penguin, renters insurance plans average $187 annually. You can either pay that expense in monthly installments or as a one-time annual fee to help protect the contents of your apartment.

Finally moving to a place of your own is an exciting time. However, you have to calculate rent, utility and grocery expenses beforehand so you don't find yourself financially struggling.