What Can I Afford To Spend On Rent

Just as you would pay your monthly mortgage note on time, paying your monthly rent each month is just as important. So before you get into a situation where you cannot comfortably make your rental payments each month, take the time to sit down and figure out what you can afford. We have provided some simple steps to calculate what you can afford to pay each month. Read on to find out where you should be.

How Much Are You Bringing In

Of course the biggest determining factor will be what you are making on a monthly basis. Many professionals suggest using a rule of paying no more than 28% of your total monthly income towards rent.

What Are You Paying Out

One of the most difficult things to keep track of are your monthly expenses. For most people these will change every month. So the best thing you can do is keep track of all your expenses. Start by finding a notepad and a pen or pencil. Now its time to start and jot down all of your monthly fixed expenses. This will include things like your current rental amount , any monthly car payments, and credit cards payments you may be making. Don’t forget about cell phone bills, cable, or any gym memberships that you may be paying on a monthly basis.

Now its time to consider variable expenses. This are expenses that change on a monthly basis. Items like gas, foot, and any other expenses like medical bills, or car repairs that you need to make should be added on this list. Everyone should also have an emergency fund in case they get sick or have to make a large one time payment. You never know what may happen, so be prepared.

Now Its Time To Figure Out The Number

Once you have tallied all of your expenses for the month, its time to figure out what your left with. Subtract you expenses from your income. And if your self employed, you will have to make estimated tax payments. Ideally, you want at least 10% in your favor. Now its time to start shopping for apartments.