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No One Wants to Be Cost-Burdened! Here Is How to Decide What to Spend on Rent

Renting is a great option for individuals from all walks of life! From excellent, professionally managed services to high-quality amenities and endless flexibility, there are plenty of reasons people choose to rent, instead of purchasing a home. Whether you’re paying mortgage or rent, it’s important to consider how much you’re shelling out each month for your living space.

Keep in mind that rent varies considerably from one location to the next. So, avoid renting a house that blows a fat chunk out of your bi-weekly or monthly paychecks. This is easier said than done, considering how the rent is increasing quicker than incomes in many cities. However, it’s never too late to wrangle in your finances. Never pay too much rent again by considering the following below!

Consider your present economic situation.

When looking for a new place to lay your head at night, it’s important to evaluate your budget to see what expenditures you’re already handling, such as utilities, insurance, and food. It might be a good idea to crunch numbers prior to viewing potential rental homes. With those numbers in mind, find a location that enables you to reside comfortably, while leaving a sufficient amount leftover for paying other residual bills. If you desire an apartment situated in a high-cost rental market, it is worth getting a roommate. Even if you are not a big fan of sharing your living space, rooming with another person can save you hundreds, and in some cases, thousands of dollars in the long-run.

Look at the 30 percent threshold.

While it is true that every person has unique social, personal, and financial circumstances, it’s important not to exceed 30 percent of your household income when it comes to rent and utilities. For that reason, rent a house that costs below 30 percent of your gross monthly income. So, a person earning 3,000 dollars each month, should spend no more than 900 bucks when it comes to housing-related expenses. You might be wondering, “what’s so special about 30 percent?” Statistically, households spending over 30 percent on housing expenses become cost-burdened, so this is the percentage used by the government to decide who is qualified to enjoy public housing initiatives and programs since 1981.

What about the 50/30/20 budget?

If you’re still undecided on the rent amount, try the 50/30/20 method. According to this guideline, renters can spend 50 percent of their take-home pay on monthly essentials like utilities, groceries, transportation, and so forth. Next, 30 percent of their after-tax money should be used for non-essentials, like entertainment. In other words, this 30 percent should cover expenses related to purchases that improve your lifestyle better and make it more fulfilling. The remaining 20 percent would go towards paying off loans, setting aside retirement savings, and fulfilling other financial targets. Once you master this technique, you should have no trouble in avoiding becoming “house poor.”

Whether it’s money, pet care, or DIY tips, we have all the information you need right here at The Heights at La Salle Apartments in Durham, North Carolina. We invite you to enhance your lifestyle with these helpful tips and suggestions!

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