When making the transition into a new living space, budgeting is key. You think about how much your rent, new couch, and moving truck rental will cost you. The monthly payment for your apartment utilities is a somewhat forgotten cost that often goes overlooked. If you start a new lease in Boston or Chicago during the balmy summer, you may forget that your heater will be on non-stop come winter. Or if you moved to Houston during a cool October, the high costs of air conditioning next summer might not even cross your mind. The cost of your utilities can add up quickly, and it’s important to consider them before moving into a new apartment. Generally, prepare to set aside an extra $200 for monthly utility costs.
What’s included in your lease
First things first, review your lease and read it thoroughly. If you see that your landlord covers the cost of many common utilities (i.e. trash and water), you are likely paying a premium for rent. If your rent looks like an absolute bargain, you might be covering the costs of all of your utilities. Check your lease to see what utilities you will be paying for, and make sure to factor that into your budgeting.
While it varies landlord to landlord, it’s common for American renters to have the trash and water bill covered by their landlord, while the renter covers the costs of electricity and gas. If you are required to pay for these two, trash and recycling services usually cost between $12-$20 a month. Water usage varies, but according to research from Circle of Blue, households spend about $15-$77 a month on water.
Your electricity bill will likely be the largest (and most necessary) portion of your total utility bill, so it’s important to know what you’re paying for. The two major contributing factors that will determine the extent of your electricity bill is how big your apartment is, and how often those living in the apartment are home. One way to aid in saving money when it comes to your energy costs is to invest in products that specialize in energy efficiency like Energy Star labeled appliances and LED light bulbs. You can also cut costs by turning your electronics and lights off when you’re away, and doing energy-strenuous chores like running your dishwasher and laundry machine late at night or early in the morning when costs are cheaper. If you don’t have A/C in your apartment, the average cost for your electricity bill should be around $30-$50 a month.
If your apartment comes equipped with an air conditioner, be aware that the cost of running it can add up quickly. Your air conditioning usage will vary depending on where you live, what season it is, and your tolerance of heat. Living in a generally cooler city like Minneapolis, Minnesota or Portland, Maine will limit your AC usage and have your wallet thanking you. On the flip side, renters in typically hot states like Texas or desert metros such as Phoenix should prepare to be forking up a sizeable check to run the AC in the summer.
Plenty of apartments don’t come with any air conditioning units. Even if your apartment does come equipped with air conditioning, you might not have to frequently use it. Cracking open a window in lieu of flipping on the AC switch can pay dividends. Depending on the usage, the size of your apartment, and how low you set the temperature, the cost of running your AC can add up. Prepare to tack on an extra $60-$70 to your electricity bill. This number will obviously differ depending on your usage and the size of your apartment.
The gas bill can be a bit tricky. Make sure to check out your appliances to see what can be affecting your gas bill. If your oven/stove uses a gas range as opposed to electric, you’ll be charged for the use of the natural gas. Fortunately, gas appliances tend to be cheaper than their electric counterparts. Even if you’re passionate about cooking and cook every night, that cost of the cooking gas shouldn’t equate to more than $15 a month. If you are planning on renting a house or a smaller privately managed apartment… ask your landlord about the heating bill.
The cost of heating can be included in your electricity bill, gas bill, or lumped into your rent depending on the type of apartment you live in and the appliances being used. For a gas heater, the average monthly cost is $40. Electricity is more costly and could come in at around $160 per month. If you are unsure of what to expect for heating costs, ask the landlord what type of heating is in the apartment and call the utility company and ask for the average monthly bill for that address.
Another apartment essential often forgotten is the cost of high-speed internet. Before deciding on what internet service plan to go with, think about your internet usage. Consider how many devices will be connected and using the internet, and what exactly these devices will be doing. If you just need to casually browse the web or social media, you can get by paying for a cheaper plan with speeds of about 6-10 Mbps. For activities that require more data, like high definition video streaming or gaming, you’re going to need to pay for faster speeds to rid yourself of any of those annoying lag issues—look for speeds of at least 20+ Mbps. If you’re having a difficult time determining how fast your internet speed need to be, try this quiz to get a better idea. You should expect to pay around $30-$60 to keep yourself plugged into the web. If your internet connection is a bit spotty, look into Wi-Fi extenders to give you the consistently great reception you need.
When it comes to cable, what used to be pretty much necessary is now totally skippable. This is a completely optional expense, and you can definitely get by without paying for cable. The number of cord-cutters (those who cancel their cable services, often in favor of less expensive Internet-based options) in the U.S. is expected to reach 33 million this year. If you are still paying for cable and can’t live without it, consider what you are watching and if there are cheaper alternatives. If you spend the majority of your TV time binging on streaming services like Netflix and Hulu and are still paying for cable, consider if it’s really worth the monthly cost. While limited basic cable options can be as cheap as $10, most people opt for more premium packages. Standard packages are usually around $50 a month, and adding on the extras can put you in the $70-$80 range. Need the absolute top tier cable package with all of the add-ons like additional sports and movie channels? You could be paying up to triple digits. Consider what you are watching, and look into whether or not you could save money by subscribing to a streaming service for your entertainment. To put things into perspective, you can subscribe to Netflix ($8-$14), Hulu ($8-$12) and HBO Now ($15) for a total cost between $31-$41 a month.
It’s important to keep in mind that if you will be using streaming services often, you will need to pay for an internet package that can support your streaming activity. Another factor to keep in mind is that many services can bundle internet with cable for a cheaper price. If you need your live TV fix, this would be worth looking into.
Although it’s not a utility, another cost that you should consider while budgeting is the cost of renter’s insurance. Renter’s insurance is usually not required, but you should double check your lease as some landlords demand some sort of insurance.
Renter’s insurance is similar to homeowner’s insurance but differs as there is no coverage for the physical building. This will cover the cost of your possessions that may have been lost or damaged due to burglary, fires, vandalism, etc. Renter’s insurance will also you cover you in any potential liability claims. Even if it’s not necessary for your apartment or required by law, you should consider getting set up with the coverage as the small monthly cost (usually around $15-$30) is worth it for the peace of mind.
Your total apartment utility costs are obviously going to depend on many things such as, where you live, how many people you live with, and what you do on a daily basis. To get a better idea of what you can expect to pay, here is a breakdown of costs.
- Electricity: $30-$50
- Gas: $10-$20
- Heating: $40-$160
- Air Conditioning: $60-$70
- Internet: $30-$60
- Renter’s Insurance: $20
Total: If you don’t factor in the cost of running A/C or a heater and don’t pay for cable, you are looking at $90-$150. Since heating and air conditioning is going to vary on a number of things, the general rule of thumb is to prepare to spend about 20% of your monthly rent on utilities. Instead of looking at these ranges as a guideline, try asking your landlord or a current tenant for the average monthly utility bill to get a more accurate estimate.