How to budget for an apartment

10 August 2023 by National Bank
Illustration of a red house

Whether you’re studying or working, there are a number of questions to consider before moving into your first apartment. Do you have enough money? What kind of housing can you afford? Do you need home insurance? Here are some tips to help you prepare.

Make a personal budget

Before moving into an apartment, it’s a good idea to make a personal budget. Budgets are a bit like roadmaps (or GPS apps) that guide you to your destination. 

Your budget will give you an idea of how much you can afford to spend on housing and various costs (monthly rent, furniture and appliance purchases, moving, electricity, home insurance, etc.). By taking all your monthly expenses into account, you’ll have a better idea of how much financial leeway you have and what kind of apartment you can afford. Once you know, you can start looking for housing.

Need some advice on budgeting? Read our article.

Our interactive tool can also help you budget more effectively. 

Determine the details and costs of an apartment or student housing

The average cost of housing varies greatly from city to city and neighbourhood to neighbourhood. Rents are generally more affordable outside of cities than in major urban centres. This doesn’t mean it’s impossible to live in a big city, you just have to look in neighbourhoods outside of popular areas; they tend to be less expensive.

A little online research will give you a better idea of the price range. Don’t forget to check social media sites – you might see an ad for your dream apartment at a reasonable price.

The price of rent isn’t the only thing to consider when deciding whether a place is right for you. Here are some other things to keep in mind:

How big is the space and how many rooms are there?

Start by assessing how much space you need. Think about your furniture and belongings.

You should also consider whether you want a closed bedroom or a studio apartment. You can save money by lowering your space expectations.

Don’t forget to check for storage space, which is particularly beneficial when you live in a small home. If you travel by bike, consider where you’ll keep it. The same applies if you have boxes to store. 

You may need a parking space if you own a car, which often results in higher rent. In some cases, free or low-cost parking options, such as parking permits, will better suit your budget.

What type of housing should you choose?

Most of the time, living with roommates gives you access to larger apartments. This also means you can split overall costs (rent, electricity, internet and more). The key to successfully sharing a home? Set clear rules for living together (shared expenses, use of space) and communicate your expectations.

Are you a student? Have you considered student residences? Most of the time, student housing is more affordable than an apartment and is generally located close to educational institutions, saving you time and money on transportation. On the downside, soundproofing is usually poor and they can be very small – a single bedroom, sometimes a bathroom – meaning the kitchen and living room are shared. The upside: If you’re moving to a new city, they’re a great way to meet people you could one day share an apartment with.

To find out about prices and conditions, visit the website of the educational institution you’re considering.

Where should you live?

As a rule of thumb, the better an apartment’s location (close to the city centre, universities or public transit), the higher the rent. This means you may have to compromise and live in a neighbourhood that’s less central, but more affordable. In this case, consider the distance between your apartment and your university or workplace. 

You might prefer to pay a little more, opt for a smaller apartment or share accommodation to cut down on your travel time.

Good to know: In Quebec, landlords can ask you to pay the first month’s rent to guarantee your lease. However, it’s illegal for them to ask for any other type of deposit, such as the cost of replacement keys or any future damage to the property. Note that outside of Quebec, landlords are allowed to ask for additional deposits. The amount you’ll need to put down will vary, but it’s common to pay your last month’s rent in advance.  

Calculate utilities, furnishings and moving expenses

On top of rent, there are several other costs to consider when moving into an apartment.

Heating and electricity: Although these costs are sometimes included in the rent, most of the time they’re the tenant’s responsibility. This means you have to pay a monthly fee to utility companies. Is your building heated by natural gas? If so, your heating bill will be separate from your electricity bill. Look into this before choosing somewhere to live.

Tip: Ask the previous tenants to give you an estimate of monthly costs for heating, electricity and natural gas, if applicable. You can also check your utility provider’s website, which provides past years’ monthly electricity charges for a given address.

Telecom and internet: If internet isn’t included in your lease, you’ll have to pay for it through a provider. Shop around, compare plans and negotiate. You can get interesting discounts by taking advantage of what the competition has to offer. Don’t forget to include the cost of subscriptions to streaming platforms or cable when budgeting.

Parking: This includes the cost of parking your car in your building or on surrounding streets (permit fees).

Furnishings and appliances: Some apartments and student residences are furnished or semi-furnished. In this case, these items are included in your rent. When they’re not included, you need to think about saving money to buy them. To avoid spending too much at once, buy only what you need at first. And don’t forget to ask around: Your family can be a goldmine of used furniture.

Tip: By opting for used furniture and appliances, not only can you save money, you’re also doing good for the planet. Visit second-hand stores and search social media to find them.

Moving: Using a moving company can be expensive. The good news is that you can cut costs by borrowing a friend’s truck and moving your own furniture. Need to rent a truck? Take the time to compare available options.

Good to know: If you meet certain conditions, your moving expenses may be tax-deductible. Don’t forget to claim them on your next income tax return. For more information and details, visit the Canada Revenue Agency website.

Expert tip: Are certain costs such as electricity, hot water or internet included in your rent? To avoid unpleasant surprises, make sure they’re clearly stated in your lease. If not, have them added.

Don’t forget home insurance

Even as a renter, it’s important to take out home insurance. Your landlord’s insurance protects the property itself. Yours protects your personal property and civil liability should anything unexpected happen.

  • It protects your property in the event of theft, fire or vandalism.
  • It covers your civil liability if you cause damage to others (e.g., if you flood your neighbour’s apartment because your bathtub overflows).
  • It also protects you if someone is injured in your home (e.g., by slipping on stairs that haven’t been cleared of snow).  
  • Your possessions can even be protected outside your home (e.g., if your computer is stolen from your car or university).

Good to know: Are you a student? Until a certain age set by the insurer, you may be covered by your parents’ home insurance policy at no extra cost. Find out more!

Know your rights and obligations before signing a lease

It’s important to know your rights and obligations as a tenant. Know what is and isn’t included in your lease, and find out what your landlords’ responsibilities are. Landlords may ask for your credit report before agreeing to rent to you and could require you to have a guarantor – someone who’d pay your rent should you no longer be able to. Of course, you can research landlords too. In fact, it’s a good idea to do so.

Government sites are full of useful information about renting an apartment, including this page from the Financial Consumer Agency of Canada.

If you’re a student, there are several financing options available to help you pay for tuition and other related costs, including housing. Here are a few options for financial assistance.

Legal disclaimer

Any reproduction, in whole or in part, is strictly prohibited without the prior written consent of National Bank of Canada.

The articles and information on this website are protected by the copyright laws in effect in Canada or other countries, as applicable. The copyrights on the articles and information belong to the National Bank of Canada or other persons. Any reproduction, redistribution, electronic communication, including indirectly via a hyperlink, in whole or in part, of these articles and information and any other use thereof that is not explicitly authorized is prohibited without the prior written consent of the copyright owner.

The contents of this website must not be interpreted, considered or used as if it were financial, legal, fiscal, or other advice. National Bank and its partners in contents will not be liable for any damages that you may incur from such use.

This article is provided by National Bank, its subsidiaries and group entities for information purposes only, and creates no legal or contractual obligation for National Bank, its subsidiaries and group entities. The details of this service offering and the conditions herein are subject to change.

The hyperlinks in this article may redirect to external websites not administered by National Bank. The Bank cannot be held liable for the content of external websites or any damages caused by their use.

Views expressed in this article are those of the person being interviewed. They do not necessarily reflect the opinions of National Bank or its subsidiaries. For financial or business advice, please consult your National Bank advisor, financial planner or an industry professional (e.g., accountant, tax specialist or lawyer).



Car with sunny mountain representing a year off

Whether you're working, studying or taking a year off, NOW pay no monthly fees if you're 18 to 24