For many, moving out of the dorms in college comes with a great sense of achievement. Living in an off-campus apartment comes with its perks, but there are also some not-so-great aspects to take into consideration. One of them is the financial responsibilities of paying rent and other living expenses, which can dry your savings quite fast if you don’t have a concrete plan of how you’ll budget your finances.
How to pay for an apartment while in college?
- Do your research
- Consider living in a private home rather than an apartment complex
- Consider living with roommates
- Get a paying job
- Try to save as much as you can
- Consider applying for student loans
- Paying for housing with a 529 plan
- Manage your credit card purchases
Living off-campus can seem daunting since it comes with more responsibilities than living in a dorm room. However, with the right strategies, you can manage to pay your rent without too much hassle on a monthly basis. Here are some strategies on how you can afford an apartment in college:
Steps to afford an apartment in college
1. Do your research
Before you settle on an apartment, you need to find out what an average off-campus apartment costs within your area. There are various sites that provide apartment listings, or you can ask one of your friends who has lived or is living off-campus. Keep in mind that you also have to pay for utilities as well, so it is important to find out an estimate of these bills as well.
As you conduct your research, you also have to consider whether you will live in your college town all year-round or not. If you plan to spend summers and other long holidays in your hometown, then you should exclusively look for apartments that allow for a short term lease.
Consider a month-to-month lease, which allows for greater flexibility since you to give your prospective landlord short notice when you need to move or go back home to spend the holidays with your home. Another reason why month-to-month leases are preferred is the fact that there are little to no consequences for staying for a very short period of time. This type of lease agreement can also be easily converted into a longer lease if you decide to commit to the apartment for an extended period of time.
Once you research yields an apartment that suits your needs, come up with a budget that takes into account the rent, estimated cost of utilities, security deposit, food, household items, and other unexpected fees and expenses. If you are able to afford all these expenses and still have some savings in the bank, then that’s great. However, if your budget is tight or you can’t afford most of these expenses, then read on.
3. Consider living in a private home rather than an apartment complex
It may be more financially favorable for you to live in a private rental rather than a large apartment building owned by a company. This is because owners of private rentals are more likely to be flexible when it comes to negotiations regarding the rent. Furthermore, a private owner may be more willing to consider your financial situation, and you could even come up with an alternate agreement of how you can pay rent that favors both parties.
Another reason to rent a private rental has to do with income requirements. If you have no job, then it automatically means that you don’t have proof of income, consequently making it harder for you to rent an apartment since it is an important requirement. Company-based apartment complexes are strict on income requirements, while owners of private rentals may be more lenient.
Other perks that come with living in a private rental include a higher likelihood of a spacious apartment, the house may come with a yard, and they are more likely to have private amenities.
4. Consider living with roommates
Living with roommates can help you save on the various expenses that come with living in an apartment since you can split costs with them. Opt to live with one or more roommates who are willing to pay rent and are not hard to get along with. Some of the factors to take into consideration when selecting a roommate include:
- Choose to live with someone who has a reliable source of income. This means that they will be able to afford their portion of monthly rent and utilities instead of entirely depending on you and running your budget.
- Inquire about any pets that they may have. Some rental units have a strict no-pets policy, and it is best to abide by it in order to avoid any trouble with your landlord. Inquiring about pets is also important if you have allergies
- Find out if prospective roommates are willing to sign a lease and subsequently heed the terms that are indicated on the contract.
- It is important to agree on how you will split up the various responsibilities in the apartment so that there is no confusion in the future.
- Inquire about their lifestyle choices as well. You don’t want to live with someone who is not compatible with your way of life since it will only result in frequent disagreements in the future.
Instead of finding roommates, you could also move into a rental that is already occupied. If you move in with a tenant who has been living in the apartment for a while, you won’t have to bear the costs of starting up on your own like furnishing the apartment and the security deposit.
5. Get a paying job
With a job, you have a steady source of income which means you’ll be more comfortable when it comes to paying rent. Consider a part-time job on your school campus. You can check with your school’s career center to find out about any paid internship opportunities that may be available to students. You will get to make money as well as gain valuable career experience. Furthermore, your priorities of being a student first are taken into consideration when you have an on-campus job. Another option for earning money on the campus is through participating in surveys or studies that are usually organized by research departments. These activities won’t take up much of your time, and most of them will compensate you.
You could also find a part-time job near the campus that doesn’t take up too much of your time. Side gigs in restaurants or coffee shops are a great way to make some extra money. Other part-time jobs that can generate income include freelance online writing, tutoring for peers, babysitting, and giving guitar or piano lessons.
6. Try to save as much as you can
It is not easy to buy the latest gadgets or the trendiest clothes on a college student’s budget, especially if you have rent and utility bills to pay. You have to sacrifice these luxuries in order to save and take care of these responsibilities. Some tips on how you can spend less money include:
- Instead of eating out daily or having food delivered, opt to cook your meals. Many places around most campus usually offer student discounts, so you know where to go when you need to purchase groceries.
- Buy clothes from stores that frequently offer discounts rather than high-end retailers. Secondhand stores also offer great deals.
- In purchasing household items, plan your shopping around coupons and other promotions.
- Consider buying or renting used textbooks. You can then sell those that you’ve purchased at the end of the semester.
- Use the library resources to your advantage. Most of them provide cheap printing and scanning services.
7. Consider applying for student loans
If you receive federal aid, then you probably know that it can be used toward room and board expenses. However, most students don’t know that it can also be used to pay for off-campus as well. According to the Free Application for Federal Student Aid (FAFSA), you can use the funds that you receive to pay for the cost of attending school, which includes living in the dorms or on off-campus housing.
To apply for a federally-backed student loan, you will need to fill out a FAFSA form, which will require you to provide information regarding your income and school. You also have the option of applying for a private student loan, although these loans typically carry higher interest rates. Once you receive your loan award letter, review it carefully to determine which loans you are eligible for. Select the loans that cover tuition and living expenses and sign for them. You can also indicate that you plan to live off-campus to help the school determine an estimate of the amount of aid you should receive.
Keep in mind that loans are meant to be paid back with interest, so avoid taking out huge loans that you will have trouble paying in the future. Try to stick to your budget as much as you can once you receive the loans.
8. Paying for housing with a 529 plan
A 529 plan is a specialized tax-advantaged college saving account that you can use to pay for off-campus housing. It does not matter whether you live within the campus or not since housing is considered to be a qualified education expense.
However, for off-campus housing expenses to be considered eligible, you have to be enrolled in an eligible college program on at least a half-time basis. Another stipulation is that the amount to be spent on rent and other expenses should be less than or equal to the amount specified by the college as a room and board allowance. If you are not sure of the exact amount, you can find this information from your school’s website or contact the financial aid department.
When adding up your 529 qualifying expenses, take into account your rent, estimated utilities, groceries, and other household items until you reach the maximum amount for a 529 plan withdrawal.
The main limitation of relying on the 529 plan is the lack of specification on whether your parent can withdraw the money for the full year’s rent if you are not enrolled in school during the three months of summer.
To be on the safe side, your parent should consider withdrawing 529 funds for the nine months that you actually have classes.
9. Manage your credit card purchases
Buying items using a credit card can give you a false sense of security when it comes to your finances. It is important to keep track of your purchases so that you don’t end up spending money that you don’t have. Furthermore, landlords usually take into account credit scores when screening prospective tenants. If you have a bad credit rating, you may ruin your chances of getting an apartment. Here are some tips on how you can maintain your credit score:
- Keep your credit card balances as low as possible to improve and maintain a good credit score.
- Pay all your bills on time. Even a small library fine could end up on your credit report if you fail to pay it.
- Cut down on your applications for new credit. Only apply for credit when you really need it. Keep in mind that opening a new credit account lowers your average credit age as well.
- Don’t close your old credit card account. If you opt to do so, the history of the inactive account will be wiped by the credit account, which automatically shortens the average credit age and causes your credit score to drop.
- Do not accumulate debt since this only serves to lower the points on your credit score.
- Is it cheaper to live in a dorm or in an apartment off-campus? Although other determinants such as the school you attend and the real estate market in the area come into play, renting an apartment off-campus can actually be cheaper than living in a dorm as long as you have a plan of how you’ll pay for housing.
- How much do I need to rent my own place in college? When it comes to how much of your income should go to paying rent, a useful rule of thumb states that no more than 30% of your net income should be spent.