Before signing any rental documents and confirming with your landlord, it is important to calculate costs and crunch numbers to make sure you can afford an apartment. Verifying these things ahead of time will ensure you have the budget for rent and additional costs along the way. When looking for budget friendly options, check this monthly apartment rentals.
50-20-30 Budget Rule
The 50-20-30 rule is a way to budget your expenses after income taxes have been deducted. 50% goes towards “needs” such as rent, utility bills, groceries, and other costs that you rely on a month-to-month basis. You should put 20% toward savings or retirement plans and 30% for “wants” such as retail shopping, traveling, dining, and other means of personal enjoyment. Budgeting is important and very easy for renters to calculate into their daily and monthly spending since you already know what your rent will be, with no surprises along the way.
Let’s face it: everyone knows that an apartment in downtown Manhattan costs far more than an apartment in a smaller town like Boone, IA. Sure, we all dream of that large studio apartment downtown with big floor-to-ceiling windows, right in the heart of the city. Oftentimes, these apartments come with a large price tag and are more than the average person can afford. Depending on where you work and your commute time, it’s worth looking at apartments in Houston that are on the outskirts of the city and miles away from the hustle and bustle of main attractions. It can be worth it for the difference in costs to commute a little further to work.
How Much Should You Pay?
There’s two types of renters: those just looking for a place to sleep and eat, and those looking for a comfortable and stylish apartment to entertain and enjoy themselves in. If you fall into the category of the bare minimum, not caring about the look or location, aim for 15%-20% of your monthly income to be put towards rent. This equals about $450-$600 per month for rent.
If you’re the type of renter that wants to enjoy more modern updates and functionality, you’ll want to set aside about 35% of your monthly income for rent. This would be approximately $1,000 monthly for an annual salary of $35,000. If the rent ends up being at the top of your budget, always consider negotiating a lower price with the landlord to get yourself more in that “comfort zone.” You never know what could happen without trying!
Consider other Options
If you’re still nervous about renting and putting forth all of the costs, there’s no reason to go ahead and rent an apartment all by yourself. There’s always the option of finding a roommate; maybe you have a friend or colleague in the area, or a family member that is willing to rent you a bedroom in their home for a considerably cheaper price than renting an entire apartment. When living with a roommate, it is easier to split the cost of rent and utilities at the end of every month, and it takes the burden off of your shoulders rather than forcing you to foot the entire cost yourself.