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Does anyone have any good websites/information to help me figure out a reasonable monthly budget for living in DC? I'll be taking home about 3,700/mo after taxes... and I don't know how to figure out what monthly rent range I should be looking at, considering the costs of other aspects of life in DC (including some fun!). My apologies if this is a stupid question, I'm still in grad school, so I'm pretty green when it comes to personal finances.
You pretty much have your choice of where to live. I suggest Adams Morgan or Columbia Heights. Rent, you shouldn't go higher than $1800 per month. That leaves you with $2K to spend on whatever you wanna do.
Does anyone have any good websites/information to help me figure out a reasonable monthly budget for living in DC? I'll be taking home about 3,700/mo after taxes... and I don't know how to figure out what monthly rent range I should be looking at, considering the costs of other aspects of life in DC (including some fun!). My apologies if this is a stupid question, I'm still in grad school, so I'm pretty green when it comes to personal finances.
The number one thing that I learned when I started working was not just accounting for rent cost, but also debt. Do you have any student loans? If you do then they may be deferred now with you being a grad school, but once you are done, if your salary doesn't change you have to account for that expense. Not only that, but when you have your credit checked to apply for a place to rent, the owners will consider your student loan debt as a current expense unless you have a long term deferment.
The best way to figure things out is to make an excel sheet and list ALL of your expenses including rent, utilities, renter's insurance (get a quote), car note, car insurance, estimated gas (car) usage, estimated grocery bill, etc. Also place your salary up on the excel sheet. Once you take the total of all the bills, then subtract them from your salary and then you will see exactly how much you have left over to go out with, save, or whatever you choose to do. It sounds simple but it is a lot easier to monitor your spending and how much you can afford when you see everything in front of you. Because I have that, I know exactly what I can and cannot spend when I go out to dinner and I don't have to worry about that affecting my bills because I have sit that money aside in mind (and my bank account). For example I may know after everything is paid off, I will have $100 left over each month. So that mean if I want to go hang out or take my wife out, I know I can't exceed that each month. As long as I stay within that figure then all of my bills will be paid and I can still enjoy the $100 and not have to wonder how I'm going to pay my bills.
The number one thing that I learned when I started working was not just accounting for rent cost, but also debt. Do you have any student loans? If you do then they may be deferred now with you being a grad school, but once you are done, if your salary doesn't change you have to account for that expense. Not only that, but when you have your credit checked to apply for a place to rent, the owners will consider your student loan debt as a current expense unless you have a long term deferment.
The best way to figure things out is to make an excel sheet and list ALL of your expenses including rent, utilities, renter's insurance (get a quote), car note, car insurance, estimated gas (car) usage, estimated grocery bill, etc. Also place your salary up on the excel sheet. Once you take the total of all the bills, then subtract them from your salary and then you will see exactly how much you have left over to go out with, save, or whatever you choose to do. It sounds simple but it is a lot easier to monitor your spending and how much you can afford when you see everything in front of you. Because I have that, I know exactly what I can and cannot spend when I go out to dinner and I don't have to worry about that affecting my bills because I have sit that money aside in mind (and my bank account). For example I may know after everything is paid off, I will have $100 left over each month. So that mean if I want to go hang out or take my wife out, I know I can't exceed that each month. As long as I stay within that figure then all of my bills will be paid and I can still enjoy the $100 and not have to wonder how I'm going to pay my bills.
Great advice, it's amazing how a simple Excel spread sheet with running totals will help put a perspective on where you stand.
The above is great advice. Beyond that, what I always heard was that it's ideal if you can pay 25% of your gross monthly salary in rent. That can be hard to do, but I'd avoid going any higher than 1/3 of your gross.
That said, issues such as debt, insurance, and lifestyle can play a huge part. I don't have much debt and feel like I have a decent lifestyle (as in, I occasionally buy lunch out, go out to dinner or for drinks fairly often, and don't live on Ramen) and have been comfortable with paying 1/3 of my gross in rent.
I also use Excel sheets to monitor my expenses (especially since I have various accounts I can pull from). It's definitely helpful, and also a good way to monitor your expense habits over time.
Adams Morgan has places for $1500, that means $2200 for you to spend a month - ($300 (car *max) + $70 (insurance*max) + $200 (drinking*max) + $500 (food*max-eating out)) = $1070
$2200 - $1070 = $1130 left over
No car (-$300) + no insurance (-$70) = $370
$1130 + $370 = $1500 < left over
$1500 - (Cable + Cell + Internet - through Verizon deal = $120 - personal stuff ($100))= $1280
$1280 - (transportation > $120 a month *max) = $1160
$1160.
Savings = $500 a month = $1160 - $500 = $660
$660 left over.
$660 in to savings or go nuts and shop.
$660 + $250 (food) + $370 (car+ insurance) = $40 left over with $500 in savings every month.
Not including credit debt. < if you have this, you're screwed. Good luck and make sure you shoot for the worst when you budget. That always helps me.
me = Salary - (Rent + pet fee + utilities + car that just sits there + insurance + pet food + my food + CC + student loan + work clothes + work shoes that wears out every 5 months + drinking) = (a very sad face).
Thanks everyone! I'm going to shoot for a place no more than $1600/mo with utilities, less if I decide on a roommate situation. I lived in the Eastern Market area this summer as an intern and loved it, so hopefully I'll be able to find something there. Having a dog limits my options somewhat.
As to debt, I do have student loans, but the $3700 figure took my monthly student loan payment into account.
Oh wow, so you can definitely live pretty much anywhere then.
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