Are you searching for a rental home? Did you decide on a budget for yourself? We all want to spend less on rent but we also want to opt in on some of the luxuries. So how do you plan your budget when you want both things? According to the industry experts, the answer lies in balancing your spending and savings.
A financial expert told us that your rent must not be more than 33% of your monthly income. Some others also claim that your rent and bills should not be more than 33% of your income. This percentage amounts to around $1,250 if you earn $50,000 a year.
We know a couple who are even more careful and limit their rent to just 30% of their income, which allows them to save even more.
So what features are costly?
There are so many features in rental homes that are not exactly needed but do add a substantial amount to the costs. Open living spaces are attractive but they might be heavy on your budget, especially when located in a prime area. Same is the case with half baths, which are just meant for guests. If you do not have guests at your house very often, this is a feature you can pass on.
Features you cannot leave out no matter what the costs
There are also some features that just cannot be left out even if it means paying increased rent. The unit must be well-maintained and located in a secure neighborhood. Amenities such as schools, hospitals and shopping areas must not be far away, and the property should be in close vicinity of your office as well. Moreover, the unit size must be suitable for your family.
What if you trimmed down the utilities?
A real estate broker told us that many people forget about utilities when they allot their monthly budgets. The bills will vary, but there is a lot that you can do to bring them down. Utility costs also rise in accordance with your habits. If you leave the lights on in an empty room, you will be paying more. Monitor your usage and invest in energy efficient appliances if you have the budget.
Generally, your bills should not be more than 6.5% of your monthly income.
With that being said, the time to work on your budget is before you start looking.
