aFireInside Posted February 8, 2015 Posted February 8, 2015 What is a good percentage of your total income to spend on rent. I got a new job and I could make 1600 a month on average. I went apartment hunting and the average cost for a good studio that is not in the bad part of town is about $1000 on average. I also have almost nothing in the bank and no car. (I need a car for one of my jobs.) Right now i don't want to find roommates, I need some time alone .
Pepin Posted February 8, 2015 Posted February 8, 2015 That is a very difficult question to answer because rent prices depend a lot on the area. In cities, the price to rent tends to be much higher due to increase demand. Plus, there are big differences in where you live. I'd look at the cheapest you can find what they are offering, the most expensive you can afford and what they are offering, and decide if you want something in the middle or something cheap. I don't recommend going all out on an apartment because you have no savings and no car. Ideally, you want enough money saved up to cover you for about 3-6 months, that way if something goes wrong, you have at least that amount of time to handle it.
aFireInside Posted February 8, 2015 Author Posted February 8, 2015 That is a very difficult question to answer because rent prices depend a lot on the area. In cities, the price to rent tends to be much higher due to increase demand. Plus, there are big differences in where you live. I'd look at the cheapest you can find what they are offering, the most expensive you can afford and what they are offering, and decide if you want something in the middle or something cheap. I don't recommend going all out on an apartment because you have no savings and no car. Ideally, you want enough money saved up to cover you for about 3-6 months, that way if something goes wrong, you have at least that amount of time to handle it. Yeah, I think your right. Im growing really impatient but I know there is a big chance of me failing if i do this without preparation.
Magenta Posted February 9, 2015 Posted February 9, 2015 Common suggestion is no more than 1/3 of gross income should go towards rent. Have you looked into a cheaper place that is further from the city center? It would have an annoying commute, but would allow you to save money. I hate commuting, but I would do it temporarily if I was tight on funds. Is there another city within a few hours' drive (so that interviews are easy) where you could get a similar job but pay less in rent?
ancapzeebo Posted February 9, 2015 Posted February 9, 2015 I've heard that around 30% is a good number for rent. I pay close to 50%, however. My suggestion would be to move to the bad part of town and buy a gun
Agalloch Posted February 9, 2015 Posted February 9, 2015 I've designed a number of Budgets for myself and Girlfriend, as well as Friends and Family, but I do live in the United Kingdom, which changes not only the currency, but also the relative costs between different expenses, especially due to taxes and certain insurance necessities. You also don't State much about your requirements, costs or options. However, in every tight/poor budget I've ever made, rent tended to be about 30%-35% of income.I tend to assume the exchange rate is about 1/2 for back of the envelope calculations which is interesting because I recently designed a budget for a friend whose pay was around £800 and whose rent was £525, about half of your figures - however, they had a partner earning about £650 a month. This was a really tight budget for someone on not much money, whose circumstances meant that they couldn't afford their lifestyle with any less money. Unfortunately, those circumstances do apply to you, because the main factor that I would reduce in another budget is their car, which costs them around £150 a month in petrol, even with one partner bicycling to work, with £300 for servicing, £50 for Government required work (the MOT), £150 for Government Taxes, £500 for insurance and with most of their £800 a year emergency budget being expected to go to the car in the event of serious repair work. They are also saving up for a house deposit, an unlikely task at the low rate they can save, but which might save you £100 a month in comparison. However, they are considering putting this towards a Car instead, which you'd also want to do, and I have recommended considering keeping at least the first years worth of savings for rent and bills in case of emergency. So that's about £300 a month just to have a car on their budget, which combined with the Rent covers 56% of their tight budget and 100% of yours. If costs are similar for you, I heavily recommend another option. I also recommend coming up with a Budget before hand, based upon your guaranteed average monthly earnings for at least a year and seeing whether it's realistic, especially in the event of Job loss. I for example, despite quite low pay, budget to survive at least 6 months in credit and at least another 6 months on the back of debt just in case. Also, living in the UK, I know nothing about Medical insurance costs, or the cost of uninsured medical fees that you should put away, but am under the impression both numbers are astronomical.
Carl Green Posted February 9, 2015 Posted February 9, 2015 What is a good percentage of your total income to spend on rent. I got a new job and I could make 1600 a month on average. I went apartment hunting and the average cost for a good studio that is not in the bad part of town is about $1000 on average. I also have almost nothing in the bank and no car. (I need a car for one of my jobs.) Right now i don't want to find roommates, I need some time alone . This is a BS non-answer but... However much satisfies your needs the most. The common percentages are good based on setting aside money for other things like retirement and other savings. When you're "getting out of a situation" that clearly changes your immediate priorities, and monies that might've been set aside for savings could go towards getting a place on your own so you have the alone time you're desiring. 1
Agalloch Posted February 12, 2015 Posted February 12, 2015 I'd been really interested to hear if you are still considering this OP? I know I spent a long time considering the options and my budget before getting a place and I still spend, probably too much, time reconsidering and tweaking the budget. I think it would help to keep discussing these issues with people who have the numbers, as you could even come up with a plan to help facilate making this practical in the future instead. Also, in the UK we have a forum at the Money Saving Expert, which is full of people that have practical data and experience. Is there anything similar for the USA that you could reach out on for more practical local information?
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