Upcoming living situation

[gf1723]

Ok, I think I know what I'm going to do but I figured I would get some advice from you guys.

I currently am renting an apartment (lease ends Jan 31st 2012) for $750 per month. I pay everything but water bill, so my electric is pretty high in the winter. I only pay $40 a month for Internet and Netflix. I'm also making a payment to my parents each month for cell phone and car. They were nice to give me a loan with 0% interest .

Right now I feel my rent is too high. I'm getting by, but I would like to be putting more towards my car payment to my parents. I have two options:

1. There is a 2-bedroom place close to where I work, but it is going to be around $700 in rent, and I will be paying all the utility bills.

2. The other option is to move farther away from work for $600 in rent and all utilities paid (even heat for winter) except for electric. They also provide high-speed Internet and digital cable.

I think option 2 is obviously the better deal, but I still like the idea of being close to town where I can walk to the local restaurants/bars and to work. If I go with the second option, I'm going to have to drive everywhere else like I currently do.

I miss being able to walk everywhere like I could when I was in college. My car didn't get hardly any wear and tear put on it and I rarely had to scrap snow/ice off it in the winter. The major benefit was that I got exercise. I work a desk job and can tell I've put on about 5-10 extra pounds since I graduated 3 years ago. Being that close to work, I would easily stop eating out 3-4 days a week at work since I would just be walking home and eating there. Counting lunch, I would be walking about 2-3 miles each day. My body would really thank me for that.

I guess I should also add that I contribute 10% to my 401k and max out my yearly Roth. I'm working on building my EF back up (only around $200) and have about 13K in savings.

[red92s]

Just a thought here, but moving can be expensive. Sure you might save $50 or $100 a month on rent. But by the time you buy $50 in boxes, tape, bubble wrap, and packing paper, rent a Uhaul and gas it up for $100, buy your buddies lunch and beer for helping move your washing machine and sleeper sofa, Buy a $100 desk because your new one won't fit, Buy a new shower curtain for $20, get a $70 vacuum because you have carpets instead of hardwoods . . . you've offset most of the savings.

Obviously I'm taking it a bit far, but it'd not a huge stretch. If dropping your rent $50 is the difference between feeling stretched and having breathing room, I'd submit you need to take a quick look at your other expenses.

Granted, this is coming from a southerner. I often forget how much my electric heat cost when I lived in MA for two bone-chilling years. What do you estimate the TOTAL monthly cost difference to be, once utilities are taken into account?

[bjl584]

How far is option 2 from work? I used to commute about 25 miles one way to work. It wasn't bad in the summer but the winters were grueling. I eventually got tired of it and moved closer. If you don't mind the drive then save the extra $100 a month, but if you think that the commute will start to wear on you, then you may want to reconsider.

[disneysteve]

I'm curious how much you earn because that really dictates how much you should be spending on housing.

Option 1 is a 2-bedroom place which begs the question of why you would have to live there alone. Get a roommate to split that $700 rent and you'd be in great shape.

I'm also curious how you distinguish savings from EF. I would think they are the same thing (at least until the EF is fully funded).

[gf1723]

Option 2 isn't that much farther from where I live now, just will take longer to get there because I don't have an interstate right next to me and will have to go through more traffic lights in the morning.

I net $1125 every two weeks and would love to get a roommate. The problem with that is I'm not comfortable just putting out an ad and letting some stranger rent an apartment with me. I know nobody at work that is needing to move and my one friend moved out of the area. I don't go out and meet very many people, I pretty much keep to myself.

I don't see any moving expenses except for buying lunch for one person who might help me. I'm getting a truck for free to move everything from my father.

Ultimately my decision would boil down to how safe some of these areas are. Option 2 is getting closer to the bad areas of the town, but a friend lived there and he had no problems. I also don't know what these apartments will look like on the inside, which will weigh my decision too. Going to view some of them today and more on Saturday, but these are the two options I find appealing right now.

[riverwed070707]

Since you haven't actually even found a place yet (I wouldn't even weigh the options this in depth without seeing the inside), why not check craigslist and look for someone who already has a place and needs a roommate instead of you being the one who has to do the hunt and is on the hook for all the bills?

[NetSkyBlue]

I couldn't afford to live in a dump without a roommate I've had ones I've liked and ones I did not. (Can't stand my current roommate, but she pays the rent on time, and I'm only stuck with her another 199 days till the lease is up) You'd be surprised what you can put up with if it furthers your financial goals. It's not forever.

[skydivingchic]

I would look around on Craigslist a bit for someone who is looking for a roommate as riverwed suggested. Do that while you continue looking at places for just yourself. You might luck out and find a situation you are comfortable in. If not, I personally would go with option 2.

A note about the lunches. Why can't you bring your lunches to work with you? Saves money and as you've noticed, is healthier. I brown bag my lunch, breakfast, and snacks every day. Also saves time, so maybe you could fit a walk in over your lunch break and get some exercise.

[charlieh]

This is a tough one. Normally I advocate saving money where possible, but not when it comes to health. You are absolutely right about the walking. The idea of walking home to eat lunch is super - no need to join a gym.
On the flip side you mentioned that you like being able to walk to the restaurants. This is both good and bad. Yes we should all live it up a bit, particularly while we are still young, but is this too much temptation to eat out more regularly thereby blowing the budget another way? That would be my only concern in choosing the high priced better located environment. It may encourage bad spending habits.

[graceful]

I would definitely do a LOT more looking around before narrowing down your choices.

option 1 is really attractive for the proximity to work and the "ability" to share. However, the proximity to restaurants will put you in temptation's way of eating out more. Lol. It also doesn't help you any bit to have to carry the extra room if you can't find a reliable roommate. Any dealing with bad roommates is more trouble than any amount of money you can save.

option 2 is VERY attractive for the added savings in ALL utilities AND internet/cable. So you will be saving more than the $150 in rent now. BUT no way should you pick this choice before even viewing the apartments.

Hoping there will be more attractive choices available to you after you start looking.

[gf1723]

DS, in regards to your question about distinguishing savings from EF; I feel that I should keep my EF separate from my main savings account. Maybe it's just the way I was raised, to never touch my savings, I feel that I shouldn't even take money out even if it's an emergency. This is why I have a different savings account called EF. I'm going to get that up to about $5000-$6000, then stop contributing to that account. I'll then take what I used to put in the EF and continue to grow my main savings account. Not quite sure what I'll use that savings account for in the future, maybe a house down payment in the future? If so I still need quite a bit of ways to go for it. I only have about $11,000 in it right now. I won't need a new car for a while, but I still contribute $25 a paycheck to my old car fund, to help cover the costs of insurance and oil changes. Am I going about this the wrong way? If so please let me know what I should do.

Well I checked out a couple today after work and one of them might be a possibility. It is small, and old but I think it may be kind of cozy. They do have a bill-back for heat and water for a max of $50 per month too which may be nice, but since it's old I'm sure the insulation is bad. I will keep it in mind because of the close proximity to work. I know some people mentioned that being able to walk might make me walk to more of the restaurants/bars, but I don't see that happening. It never happened whenever I lived by myself in college and walked everywhere. I would just go home so I could eat in front of the TV. I need to get better at bringing my lunch, but I hate sitting in the lunchroom at work. I would rather get out and about and that's why I end up driving somewhere to buy something.

I'm looking at some more on Saturday which are all too far away from work to walk. I found some that have been lowered about $75 for each month's rent since they aren't rented out yet. Being a college town the leases usually run Aug-Aug or Aug-May, so I'm sure that's why there is a special price since they aren't rented yet.

I wish I could live in each place for a month at a time and "test" it out. Just to see how I much I will make use of living so close to work. I guess I'm just frustrated that since it's a college area, it seems the options are cheap and really low quality, but also close to everything and some noise from students. Everything else is further out of town, really nice, but over my price range. I just need to make more money!

[gf1723]

Well Option 2 ended up being a too good to be true kind of thing. The apartment was not very nice at all and extremely old. I drove around the area and there seems to be a lot higher crime (cars broken into mostly) around the area. There were a lot of strange individuals wandering around even on a Saturday morning, so I would hate to see what it's like on a Friday/Saturday night.

I did view two other properties through another company and they were both on a special price. One is about $615 a month and the other is $650. Trying to decide if the $650 will be worth the extra money. The one for 650 going to be a lot easier getting to work and comes with washer/dryer hookups. It's in a town a couple miles south of the town I work in. The crime rate is low and it's generally a nicer area. The 615 is actually a 2 bedroom that I wouldn't really need, so there is wasted space and I would have to close off the room to keep from heating it.

One quick question though, the 650 has a wood fireplace. If I were able to obtain wood for free, do you think it would be smart to try and heat a tiny 1 bedroom apartment with it? I don't mean constantly, but maybe when I'm there on the weekends? I'm always out in my living room anyways so I could just shut the door to my bedroom. I think most people who say fireplaces don't save money are using larger houses, and the fireplace only heats one room. Well in my case, it would easily heat the living room and kitchen.

[disneysteve]

I'm working on building my EF back up (only around $200) and have about 13K in savings.

I agree with keeping EF separate from other savings. What I was questioning was how you have it split up. Why do you have 13K you are calling savings and only $200 in your EF? I think EF should come first and then other savings. Why not move money from the savings account to the EF account?

[gf1723]

I see your point now, DS. Reason it is like that is because when I got my first job out of college I didn't know anything about an EF since I lived with my parents. I just threw a decent chunk into a new savings account I opened up. When I realized that I needed and EF, I just created a new account and funded it a bit more than the regular savings account. I ended up getting about $3500 in it before I moved out.

My EF took a major hit this year so now I'm just rebuilding it. I don't know why I haven't transferred money from regular savings into the EF, probably because I just like being able to see 5 digits in one account. Makes me feel good.

As of right now I'm back on track. I have all my CCs paid off and am starting to contribute more to my EF now instead of my savings account.