Don’t Overspend on Rent

Don’t Overspend on Rent

Are you paying too much for rent? How would you know if you were? According to the US Census Bureau, 25% -30% of your gross income is an ideal amount to budget toward rent. In addition to rent, remember to factor in another 3-4% for housing expenses, like utility costs. When setting your budget for a new place, be sure to follow these tips to prevent overspending.

Orange Apartment Building 1

Calculate How Much to Spend on Rent Step 1: Evaluate your total income. If you have a roommate, combine your incomes together and follow the same process. (Although if you fear you might not want to live with a roommate forever, perhaps budgeting on one salary can be beneficial.) Step 2: If you choose to spend 25% of your income on rent and utilities, multiply the gross income by 0.25. Step 3: Divide the total amount from Step 2 by 12 months, and you will have the recommended maximum amount to spend on rent and utilities. Example: (The following income rates are from the 2013 average starting salaries for recent graduates via CNN Money.)

No Roommate

You & Roommate

Step 1 Income:  $44,000 /yr Combined Income: $37,000 + $61,000 = $98,000 /yr
Step 2 $44,000 x 0.25 = $11,000 / yr $98,000 x 0.25 = $24,500/yr
Step 3 $11,000 / 12 months = $917/month $24,500 /12 months = $2042 /mo
If you plan to spend only 25% of your gross income, and are making $44,000 a year without a roommate, it is recommended that you spend no more than $917 on rent and utilities. If you budget 25% of your income toward rent and utilities, and make a combined income of $98,000 with a roommate, it is recommended that you spend no more than $1021 for your portion, if rooms are equal. It is our hope that these tips help you avoid overspending on rent during your next apartment hunt. To find reasonably priced apartments in your area, visit ForRent.com. For more ways to save money on rent, be sure to browse the Apartment Living blog for great ideas!
Related Topics (1)

Recommended Posts

Stress Relief

Stress Relief

Feeling a little overwhelmed?  Need to relax?  Don’t we all.  So many things about living in an apartment can cause large amounts of unwanted stress.  (What kind of stress is wanted I wonder…)  Anything from moving, to cleaning, to roommates can cause you to feel like you just can’t take it anymore!  What to do?  […]

read more
Living With Unbearable Roommates

Living With Unbearable Roommates

  We don’t always get to choose who we live with. Whether it is a dorm situation or the economical need to rent a room to a complete stranger, sometimes we end up with roommates that are overbearing, dirty, or just plain obnoxious. Here are some tips from one who has dealt with her share […]

read more
Easy and Quick Thanksgiving Centerpieces

Easy and Quick Thanksgiving Centerpieces

With all the festivities surrounding the planning of your Thanksgiving feast, it’s no wonder you have forgotten one very important detail-the centerpiece! No worries, I’ve compiled five easy and quick ways to make your centerpiece perfect for your family gathering.  The best part….most of them can be found at your local grocery store or right […]

read more
Senior Living: Factoring Healthcare Costs into Retirement Planning

Senior Living: Factoring Healthcare Costs into Retirement Planning

Most people imagine spending their hard-earned retirement dollars on vacations or gifts for their family. When planning for retirement, they don’t consider the less glamorous but potentially devastating healthcare costs that can quickly eat into their savings. Thanks to medical advances, you have a longer life expectancy, but it is your job to plan for […]

read more

Pick a Category or Topic

Categories

Topics