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If my take home pay after taxes is about $1,900/month, what would be the best amount to spend on rent? My current apartment monthly rent is $595 for a two bedroom, but I pay $50/month for garage and $45/cable, so I pay the apartment complex $690/month. But my take home pay is only about $1,900/month. Am I spending too much for my apartment rent? I just thought that I should ask everyone on here for advice on this.
The general rule of thumb is 25% of your net income but that's not always realistic and many people manage on a greater percentage. So you're a little on the high side (discount cable as that's not a necessity but a luxury!). However, if you don't need two bedrooms and you're feeling a little stretched financially you could look into downsizing so you can save.
If my take home pay after taxes is about $1,900/month, what would be the best amount to spend on rent? My current apartment monthly rent is $595 for a two bedroom, but I pay $50/month for garage and $45/cable, so I pay the apartment complex $690/month. But my take home pay is only about $1,900/month. Am I spending too much for my apartment rent? I just thought that I should ask everyone on here for advice on this.
The numbers that people throw around 40 times the rent, 1/3 etc don't really have much value. They are only a rule of thumb for people who don't have all the information about your financial situation(landlords). You have to add up all your expenses and see how much of a cushion you have left over.
So these 40 times the rent, 33% really have no value when you are evualuating your own situation because you have access to much more details about your own situation and can come up with a much more precise way of figuring out how you should allocate your money.
I rent two bedroom apartment because it provides more space for me. I use the second bedroom as an office room and for storage. $595 is a good deal for a two bedroom apartment here in Nebraska, and it's only a 10 minute drive from work. I work a second job part-time, but the hours vary on the second job. I usually work 12-15 hours a week on the second job. My first job pays about $1,900/month after taxes, but I probably make an extra $300/month after taxes on the second job. I usually put aside $500 in savings every month. But I work two jobs since the full-time day job doesn't pay me as much money as I truly deserve.
Then you're renting what suits you and say it's a good deal, and you're able to save money as well so I'm not sure what the problem is. If you're having an issue with working two jobs then, trust me, a good percentage of the working world does exactly that and sometimes even carries three jobs just to make ends meet, let alone save. Consider yourself fortunate!
A lot of things depend on individual circumstances...
A general rule of thumb we used is housing shouldn't be more then a third of your income...
Lenders were using similar ratios for mortgages... no idea what is used today.
I work with a young lady that pays 50% of her income to live in San Francisco and has done so for 3 years... she absolutely loves her place and sold her car after living there for 6 months..
She said she could not have sold her car if she lived in the suburbs...
I know another couple that rent in Piedmont CA so their two kids can access the top public schools... they say it is a sacrifice they willing make even though they pay a lot in rent... they told me private school was the alternative and that would cost even more.
It's not just the monthly rent amount that needs to be considered because some complexes pay some of the utilities, some all, and some none. That can make a big difference.
Plus, people spend different amounts on food, gasoline, clothes, entertainment, etc.
The total outlay each month needs to be reviewed before deciding if one's income can handle the rent amount.
A lot of things depends on person to person like some may like to have utility for example wifi internet access other will opt for other according to the requirement so rent changes according to the requirement .
A co-worker with a wife and 3 children live in a very small two bedroom apartment and have since 2005.
They could easily afford a nice place... they choose to get by on the cheap because their dream was to own a family home...
In a couple of weeks, their dream should be a reality... they are in escrow now.
He said they never would have been able to buy without 7 years of savings for the down payment...
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