Congratulations! You did it! You graduated college and got your degree. But once all the college graduation parties and final hangouts with your friends come to an end, it's time to hesitantly glare into the next phase of your life. It's time to get your first apartment.
A lot of us know roughly where we want to go — "I'm moving to New York!" or "I'm off to Chicago!"
But most of us have no idea what we're in for.
All that hard work in school may have helped you find your dream job, but it won't help you find your dream apartment. That's up to you.
"Moving to LA has a lot of unique challenges," said Katie Goralski, a recent graduate from Syracuse University. "[My roommate and I] constantly were looking for an area that fits both our safety and budgetary needs."
That's really tricky. A lot of times, you find a neighborhood in a city that you love but are soon deflated when you realize you can't afford to live there. If you opt for a neighborhood where the rent is really cheap, it might not be that safe. You have to find that balance. And it's not just the rent you have to worry about – it's everything else. If you're moving to New York City, for example, you're going to find that everything costs more. A LOT more. You have to factor that in when you're figuring out how much rent you can afford.
"Living in New York City is expensive," said Matt Kennedy, a recent Marymount Manhattan College graduate. "I knew that coming in but didn't really understand it."
This may seem daunting, but you're not alone. Hundreds of thousands of people your age are going through the exact same thing you are. So, first thing: start crunching some numbers.
It's important to understand your budget and the average rents in the city you want to move to. Pick a neighborhood that's right for you and try to find a roommate if possible. Start scouring the internet for trustworthy apartment listing sites. Don't forget to include the cost for utilities and transportation in your budget. And, most apartments will be empty when you first walk in, so you're going to need some money for furniture.
There's a lot to think about when looking for the right apartment out of college. Here are a few tips to help you find what's right for you.
1. Pick your city
For many, this may not be an option based on the job you were hired for. But surprisingly enough, you don't have to live in the city you are working in. If you can't afford to live in the city you work in, there are plenty of other surrounding areas that may have cheaper housing.
"Don't get emotionally caught up in an apartment that you can't afford and doesn't suit your budget," said Bola Sokunbi, CEO of Clever Girl Finance, a company that aims to help young women manage their finances right out of college. "Everyone wants to live in a big city out of college, but if it's not affordable, you may want to consider working your way up and starting in smaller cities."
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I want to move to New York after college graduation. Can I afford it?
This factor should be taken into consideration when applying to jobs. Do I really want to live in this city after college? Is it too far from home? Can I afford to live in this city? Don't apply for a job in a city you don't want to be in when you graduate. At the end of the day, you want to be happy where you work.
"It's important to balance your desires with what is realistic for your scenario," said Erin Lowry, author of the "Broke Millennial" blog and book series. "But you should also find a city that you would want to stay in for at least a few years."
If you can't afford anything yet and need to live at home, there's nothing wrong with that either.
"Not everyone moved ... after graduating college," Kennedy said. "Some people went home to save money."
2. Pick a neighborhood
Now that you've chosen the city you want to move to, you need to think about which neighborhood you want to live in. All big cities have several neighborhoods to choose from. In New York, for example, there are the boroughs of Manhattan, Brooklyn, Queens and the Bronx, and then even within those there are neighborhoods with different vibes – and costs of living.
Manhattan, for example, is a lot more expensive than Brooklyn or any of the other boroughs. But if you live in the "outer boroughs," it will take you longer to get to work if you work right in Manhattan, so it's a trade-off.
And, some neighborhoods are safer than others.
"Safety absolutely needs to be a factor," Lowry said. "Crime happens all the time in bigger cities, so make sure you're checking online to see how safe your target neighborhood is."
If you know people who live in the city you're moving to, even better — ask them for their advice on neighborhoods they would recommend and those they would avoid.
3. Know your budget
You know your city and you know your neighborhood. Now it's time to pick the right apartment within your budget. How much is your starting salary? How much of that salary are you willing to spend a month on housing alone? These are questions you need to ask yourself when looking for an apartment in your budget.
"The rule of thumb is that you don't want to be spending more than 30% of your salary on housing," Sokunbi said. "But that varies depending on what city you're living in."
If you're living in a more expensive city, be prepared to spend more than 30% on housing. On top of that, what else will you be paying for each month? Do you have student loans? Do you have insurance to pay? Cable or electric bills? These are all things to take into consideration when crunching your numbers. If you're spending more than 30% of your income on rent, you're going to have to cut back your spending in other areas.
"You have to be realistic about your budget," Lowry said. "You don't want your cost of living to be taking up your entire annual income. That's not sustainable."
When it comes to your budget, here are the key numbers you need to know:
Annual salary (after taxes)
Rent
Basic utility bills (gas, water, electric, phone, cable)
Extras (streaming services, other subscriptions)
Debt payments (credit cards, student loans, etc.)
For your first apartment, you also need to know:
Security deposit
Broker's fee
Requirements upfront (usually first and last month's rent)
Knowing these numbers is a good way to start learning what you can and cannot afford. Write them down on paper or pop them into a spreadsheet. You want to keep track of your expenses and your spending and make sure that you are leaving room in your budget for savings and unexpected expenses.
4. Visit apartment listing websites
There are hundreds of different apartment listing websites.
Some of the most common sites include Craigslist, Apartments.com and Zillow. Also look for local apartment listing sites. The Zillow-owned site StreetEasy, for example, has listings that are specific to New York City.
You have to be careful, though. This is where you're going to live, so you want to make sure it's safe and the listing is legit. So, do your own vetting to make sure the place checks out.
"There's a ton of different websites," Lowry said. "But you want to make sure that you are looking in the right places. Sometimes, certain apartments may seem too good to be true."
5. Roommates
Getting a roommate is one of the best ways to save money. Not only will you be splitting rent, but also utilities, appliances, furniture and food. The more roommates you have, the less you'll be paying for housing costs. But again, you have to be careful.
"You really want to find someone that you can trust," Sokunbi said. "So preferably starting with your friends or someone that you may have previously gone to college with."
You can even look to friends of friends. Put the word out on social media that you're looking for a roommate. A lot of people have also had success finding roommates on Craigslist or other sites. It's important to add that if you are planning on rooming with someone you don't know or just recently met, you should do as much research on this person as possible. Ask them where they work or where they went to school. You can try to find some mutual friends and verify as much about them online to make sure they are who they say they are. If you're going to be living with this person, there needs to be a certain level of trust.
"I moved out to LA with a roommate," Goralski said. "We've been starting to navigate the city together and explore everything that it has to offer."
When you do find a roommate, there are several conversations that need to be had. How will you be dealing with groceries? How do we handle chores? How much air conditioning will we be using? How do we handle cleaning? What appliances and furniture do we need? What is our policy on overnight guests? These conversations should happen early so you can decide whether living with this person is going to work.
6. Networking!
When you hear the word networking, you may think of it more in the sense of finding a job, but it applies to a lot more in life — including finding an apartment! Reach out to people who have already lived in the city you are moving to and ask where the best place to live would be under your budget.
Before you move, tell everyone you know where you are going and let them know you are searching for a roommate. Most people will be moving to new cities out of college and will be in the same situation you are in. You never know when someone else you know is looking to move to your city — or maybe they know of someone else who is.
If you don't know anyone who is living in the city you're moving to, network online! Facebook is a great resource for people to link with others in your area. See if you can find people who are in the exact position you are in now. Find out where they lived, how they budgeted their money and how they commuted to work every day. The more people you know in your city, the quicker you'll feel comfortable with your living situation.
7. Hidden costs
Aside from your monthly rent payments, there may be some other hidden costs that you may not know about when renting out an apartment.
First, there will almost always be a security deposit. This will be a certain amount of money you need to pay at the beginning of the lease that can be used to pay for any damage you may cause to the property. You will get the deposit back when the lease is over if there isn't any damage.
There may also be a broker's fee, which is a certain percentage of your rent that you will pay to a real estate agent who helped you secure the apartment. A broker's fee is typically about 12%-15% of the annual rent. But it can vary based on the total rent of the apartment.
And, you may be asked to pay first and last month's rent upfront. As much as you are taking a chance on this apartment, the landlord is taking a chance on you, and they want some financial security.
It's important to talk to people who have recently made the move and find out any other hidden costs they have experienced. As mentioned before, there are thousands of people who have already done this move, so tap them as your "sources" and make sure there aren't any surprises.
Make sure to include these potential hidden costs in your budget.
8. Moving
You found where you're going to live, but how do you expect to move everything in? Do you use friends or get a moving company? Of course, it depends on how far the move is and who would be willing to help you move all your stuff in.
You could hire a moving company, but they could often be pretty pricey. To save money, see if you can have family or friends help you out with moving stuff in. Having your own car would make the move a lot easier, but you may have no choice and need to get a U-Haul truck.
If you live in a five-story walk-up, you won't be able to move everything up there alone. You're going to need all the help you can get. So, recruit friends — but don't forget to compensate your friends if they did help you move in. Moving heavy boxes is hard work, so make sure your friends feel appreciated. (Pizza and/or drinks are usually a safe option!)
9. Furnishings
Now that you're no longer in college, don't expect your apartment to come furnished. Furniture will likely take a heavy chunk out of your budget.
Facebook Marketplace is probably the best place to get furniture for cheap. People in your area will be selling furniture that they don't need anymore, and this may be a nice way to get a good bed, mattress, tables and maybe even a couch. You'd be surprised how many people are willing to sell furniture at a discount – or even give it away for free just to get rid of it.
And don't worry about getting all your furniture at once. It may be tempting to completely furnish your apartment with expensive pieces as soon as you move in, but you need to put your budget first and save for the long term. Focus on the most important furniture first, like a bed and desk.
"You want to budget accordingly based on your financial goals for each month," Sokunbi said. "Then see what else you have left to spare to furnish your apartment."
Here's a pro tip: If you wander or drive around some high-end neighborhoods on garbage day (or the night before), you may be surprised by some of the items you will find on the road. It might be hard to believe, but often people throw out some really amazing stuff just because they need to move it out – they don't have room, don't have time or interest to try to sell it, etc. Use this to your advantage! It could be a great opportunity for you to pick up some free pieces of furniture for your apartment!
10. Costs for utilities, groceries, transportation
Outside of your monthly rent payments, there are other costs that you must consider in your budget. Many of these costs will vary based on your consumer behavior, but it's important to control how much you spend on things like utilities, groceries and transportation once you move in.
"Make sure you're aware of how much you're using electricity in your apartment," Lowry said. "How much air conditioning will you use in the summer? Does that appliance really need to be plugged in all night?"
You'd be surprised how much you can save if you make a habit of looking at everything in terms of how much money it costs and then trying to save and conserve wherever you can.
If you have a roommate, plan on sharing the price for groceries if you know you'll be cooking together. This is another example of how much you can save with roommates. When I lived with three other guys, we would split the receipt based on which food items we would all eat, and then pay for our individual food items. That way, we wouldn't be spending money on food that we know we wouldn't be eating.
Lastly, and likely to be the most costly — transportation. If you live in a city like New York, odds are you will take the subway or train to work every day. However, not all cities have public transportation. When moving into that first apartment, you need to consider how far your place of work will be, and whether you will need a car.
"You want to factor commuting costs into where you want to live," Sokunbi said. "If there's an apartment that's $1,000/month that's closer to work but there's also an apartment for $500/month with a commuting cost of $100/month, then you'll be saving $400 a month."
If you have a car, you'll be saving on public transportation, but you'll also have other costs to consider. Car insurance and gas prices are very expensive nowadays.
And, if you currently have a car but are moving to a big city with public transportation, you might consider giving up your car.
"There are a lot of cities in this country where you 100% have to own a car in order to live there," Lowry said. "But if you want to live in a big city in an expensive apartment, you may have to sacrifice that car for public transportation."
It's a lot to consider, but just be smart about it. Take the time to consider all of these factors. After all, this is where you're going to be coming home at the end of every day, and this is where you're keeping all of your stuff. So, you want it to be safe, you want a roommate or roommates you can trust and you want to make sure it doesn't break the bank.
Resources
This may seem overwhelming, but there are plenty of resources that are tailored directly to college students who are looking for that first apartment. These are just a few of the websites that recent graduates told me were most helpful in their search:
- Craigslist: Not only helpful in finding an apartment, but also great for networking and finding roommates.
- Apartments.com: A reliable apartment listing website with options for all budgets.
- Zillow: Another reliable apartment listing website.
- StreetEasy: NYC apartment listings as well as guides to the city, neighborhoods and more.
- Facebook Marketplace: Great way to find discounts on furniture and appliances.
- U-Haul: One of the most well-known moving companies.
- Social Media! Instagram, Tik Tok and Twitter are great resources to see where people are living out of college and what it's like — if they love it, hate it or have pro tips.
And just remember: You're not alone! This is an adventure that you'll be taking on with millions of other recent graduates. So there will always be people to share stories and advice with. And sometimes it's just comforting to know that there are other people on the same wild ride that you are!
″College Money 101″ is a guide written by college students to help the class of 2022 learn about big money issues they will face in life — from student loans to budgeting and getting their first apartment — and make smart money decisions. And, even if you're still in school, you can start using this guide right now so you are financially savvy when you graduate and start your adult life on a great financial track. Josh Meyers is the production intern for CNBC's 5 p.m. ET show "Fast Money" and multimedia program "ETF Edge." He is a junior at Syracuse University's Newhouse School. The guide is edited by Cindy Perman.
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