Personal Reflection – I Was Financially Unprepared for My First Apartment

I wrote about this topic before, but I wanted to go into greater detail about my mistakes in renting. Owning a home is the American ideal. However, most people settle for renting an apartment. Still, even that isn’t easy for most to do. The average studio apartment in New York City, Manhattan specifically, costs $2,550-a-month. Meanwhile, about 43% of Americans can barely afford their rent and bills.

People struggling with their rent need to reassess their spending habits and budgets. To those of you about to rent your first apartment, it might be better to wait a little while and reassess your options. I offer this reflection of my first apartment rental as a cautionary tale.

My First Apartment

I traveled abroad often when I was young and stayed at home while in college. My biggest mistake relative to that was not saving more money and understanding the repercussion of renting instead of owning. Anyway, at 25 years old and soon to be married in 2004, I moved into my first apartment in Brooklyn, New York. It was a cavernous studio rental at $550 monthly.

I was barely making $27,000 as an educator. My real estate agent, a lovely and friendly woman, lived across the street and would give me a large plastic bag of day-old, hardened bread every week or so that she would get a friend at a local bakery. (At least, I hoped. I never asked.) We scrimped every penny. It was a rough first year renting. I never should have done it.

To raise money, I sold nearly everything I owned. I sold my beloved bass guitar. My family and friends helped me a lot. I borrowed money from everyone I knew. I maxed out every credit card I owned. Looking back, that was a surefire signed I wasn’t prepared. I should have opened a new bank account for my rent and waited a few months to build a rent fund.

Instead, I scraped together every cent I could put together to pay for bills. I was always behind, always playing catch-up, always one step behind a bill I just paid and three steps behind the imminent bills behind the paid bills. With my utility bills, like energy and food, I was basically paying about $7,000 to $8,000 annually to stay there.

The Curse of Hindsight for Financial Clarity

Every day, I rue the fact that time machines don’t exist. What I wouldn’t do to be able to go back in time, tackle myself and tell myself how stupid I was being. There were so many more financially efficient and expedient things I could have done with $8,000 a year. My own financial standing would be so much better today.

My credit was actually good back then before I rented. I could have applied for a mortgage and got a small starter house in New Jersey. My employment was in Manhattan, so I could have taken mass transit or got a used car and commuted. I would have gotten a good home insurance and life insurance policy that accrued leverageable cash value over the years.

The 2008 financial crash was imminent, but I would have gotten some U.S. Treasury Bonds. I would have tried my best to get a home with a basement or attic apartment and rented out the space for extra income. I am genuinely horrified that I am only thinking about this in middle age, looking back at the financial ineptitude of my youth.

Wait Until You’re Ready

I share this story to express that its OK to wait for the right time to rent an apartment or buy a house. Good things come to those who wait and its better to know what you’re getting into. There is no surer sign of unpreparedness than rushing into something because you simply want it instead of knowing you’re ready for it.

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