Budgeting for an Apartment in Los Angeles

Renting an apartment in Los Angeles isn’t just about covering rent—it’s also about everything else that comes with it. Utilities, moving costs, furniture, and that surprise pet deposit can all add up to an unexpected total.

So, how do you make sure you can afford your place and still have money left for day-to-day expenses and your long-term savings goals? Here’s how to break it down.

How Much Rent Can You Afford?

A common method is the 30% rule—spend no more than 30% of your gross income on rent. That means if you make $4,000 a month before taxes, you should aim to keep your rent under $1,200.

But not everyone lives in an area where $1,200 gets you a decent apartment (or even a room). In that case, you might need to stretch that number. That’s where the 50/30/20 rule can help:

• 50% of your income goes to essentials (rent, utilities, groceries, work-related expenses)
• 30% goes to wants (dining out, entertainment, “for fun” purchases)
• 20% goes to savings and debt repayment

If your rent is more than 50% of your income, you probably need to scale back on something else in your budget. In the event that’s not an option, you may consider living with one or more roommates, a common way to reduce housing costs. Or, if your job and commute needs allow, there may be another neighborhood you can consider. Just be sure to factor in any increased commute costs to your overall budget.

Another option is to adjust your budget, spending more on housing and less on other categories. Remember, it’s one thing to say you’ll spend less on things like eating out, but changing a habit can be tricky. If you decide to cut spending to afford a new rental, consider giving your new budget a test run for a couple months. That way you can get a preview of what your finances will look like before you sign a lease while you build up your savings.

It’s Not Just the Rent

Here are the other costs and needs you may need a spot for in your plan:

• Security deposit: Usually one to two months’ rent; it’s generally refundable if you move out and the unit has no unusual damage.
• Utilities: Electricity, water, gas, and internet can cost hundreds each month. Some rentals may include part of these costs in your rent payment, so be sure you understand what you’re responsible for before you sign on the dotted line.
• Renter’s insurance: A little bit of spending here can go a long way to making you whole again in the case of a theft or emergency.
• Moving expenses: Whether you’re hiring movers or renting a truck yourself (and buying pizza for the friends who lend a hand), there are costs associated with moving your things.
• Furniture and supplies: If you’ve never set up your own place, you’ll likely need to fill in some gaps as you furnish, stock your kitchen, and deal with all of those unexpected needs (like a trash can or shower curtain).
• Commuting: If moving means driving more then gas, maintenance, or public transit costs could increase.
• Total Move-in Cost: Security deposit isn’t the only thing required to get an apartment, before you move in, many landlords require security deposit plus first month’s rent before they hand you the keys. In some cases, that could be 3 months worth of rent before you even move in.

Your “Just in Case” Money

Unexpected expenses don’t care about your finely tuned budget. An issue with your car, an unexpected medical bill, or the need to replace a piece of equipment for work. It’s wise to have some backup cash in place for these situations in the form of an emergency fund.

To start, aim for at least one month’s rent (three months is even better) in savings before moving in. If that sounds impossible, start where you can. Even a small emergency fund can help prevent surprise expenses from turning into credit card debt.

Budgeting for an apartment isn’t just about making rent—it’s about making sure you can still afford life outside those four walls. Take the time to prepare yourself and your finances before you sign a lease, and reach out to a financial advisor if you need help balancing your budget.

Ready to Move? Make Sure Your Finances Are Too

Many landlords require either proof of employment (i.e. paystubs) or verified funds in a bank account to even considered for an apartment. That’s where First Entertainment is here to help. Apply today for a Value Checking account and First500 Savings account to get started on your financial journey so when you decide you make the move, you’re already ahead of the game.