1. The situation:
Saw some pictures of a 1 bedroom / 1 bath – fabulous location, awesome amenities including balconies and fitness center / spa, gorgeous building with gated entry and underground parking and tons of space (the ad said huge closets!).
2. The issue: The price (and the one-year lease).
The cheapest 1bed/1bath in that complex starts at $1,250, and that’s after amortizing the one-month free deal. I may be able to negotiate a 6-month rent, but that’d probably include a $50-$100/month premium (which would put it really out of my budget).
3. The considerations:
$1,250 is actually a really good price – I’ve seen similar places go for $1,500 in the same area (do I sound as if I’m rationalizing?). But – $1,250 still a big fixed expense. Another consideration – do I really need all those wonderful features such as the fitness center, balconies, spa room, etc.? I’ve gone without granite counters in my kitchen so far, surely I can do so for a while longer. Must balance need vs. want…
4. The budget:
My current budget for the new place is $1,000 for rent and a six-month lease. I may be able to “afford” up to $1,500 in rent and still save some, but I’m a huge fan of keeping my fixed expenses low at this point in my life.
5. The question: Can I afford to increase my budget and pay more to live in a nicer apartment?
6. The real questions (thanks to Single Ma!):
- Will this purchase delay progress towards my financial goals? YES
- Will this purchase result in consumer debt? NO
- Will I regret this purchase in a month? I don’t think so (I’ll be too busy enjoying my balcony!) But if I lose my job, I’d really rather not have such an expensive place.
7. The answer:
I need to think about this. If I decide that I can’t afford it, I probably won’t even visit this building (or similar ones) in person. No use falling in love with an apartment that’s out of my budget!
*Don’t you love how at the end of my 7 steps I haven’t really answered my question? Heehee.