What seems like a feasible house or apartment rental rate, in theory, can quickly become the thing that ate your personal budget every month when time rolls around to write the landlord a big, fat check. A general rule of thumb is that you shouldn’t have a rent or mortgage payment that takes up more than 1/3 of your income. If you have little other debt, you might let that percentage creep slightly higher but not much. You will be absolutely shocked how little you have left over for other expenses if you let that happen. In an effort to inject some common sense into the conversation, let’s talk about how to save money on rental costs when you find out there’s not enough money left over to buy toilet paper.
If you want to live in the hippest neighborhood, you’re going to pay a steep price for the privilege; there’s no way around that. Plus if the area is densely populated, it’s liable to cost extra for a parking space (Hello, New York City). Or you can lower your rent dramatically by finding new digs a few minutes away. The amenities will still be there, albeit a short drive and you’ll have extra cash in your pocket to actually enjoy them.
What does “nice” mean?
If nice heretofore had to include granite countertops and stainless steel appliances, maybe it’s time to rework the definition to mean no insect infestations or bad neighbors. Presto, you have more money for essentials like food, gas, and deodorant. The truth is that your income might not be quite ready for that dream apartment but your ability to overlook drawbacks like shabby carpet could get you into an otherwise nice place at a good price. Throw down some area rugs and you’re good to go.
A roommate (or 2 or 3) doesn’t have to be the definition of Hell on earth and imagine the cost savings if you only had to pay a quarter or third of the cost of living in some fancy digs. Finding sane roommates can be something of a crap shoot but if you really really really want the nice place – get busy screening. Your personal budget will thank you.
The Young Wealth Team
Flickr / Ben Cumming