In this article, I’ll share with you how much I should spend on rent. If you are searching for a nice home for yourself, You may question what length you should pay rent. Renting an apartment is very hectic, And if it is your first time, you may even be very stressed.
You would like your city to have several things, including good public transport, amenities, and job opportunities. But if these things are quite in your place, The cost of rent can skyrocket. New York is the best example of a well-planned city, But it’s very expensive.
How much should I spend on rent?
Today 30% of your income for your housing is considered as good. This is because many people are paying a whole lot more or less. But this number has been struck for financial advice for quite some time now.
For, i.e., if you make $1000 from your job, You should spend $300 on housing. This advice is one of the most given and considered as the best. But this is not the perfect advice for everyone. For example, if you live in an expensive city, 30% might not be enough, Whereas if you are living in a cheaper area, Paying 30% can be a bit expensive.
Tips to stay afloat when renting.
1) Keep two months of rent in liquid
Emergency funds are one of the most important aspects of financial freedom. But apart from emergency funds, You should also have some other funds in liquid. For example, having two months’ worth of rent can make your life much easier.
A study suggests that after losing a job in America, the average number of days to get another job is about 1 to 2 months. So this means if you have the rent in place for the time, You can easily work your way around during a job loss. This is very important Because if you can’t pay rent, you have to move out, which is to cost money.
2) Track Expenses in and out
Another great way to escape a financial meltdown is to be proactive. A lot of people live paycheck to paycheck. They are too scared to look at their finances and fix them. Such people don’t even look after their monthly statements until they have got their credit card bill.
Finance experts advise that you should adhere to a monthly plan and record all expenses in and out. This will help you to build a much more robust financial journey If compared to doing nothing. You can use excel or any free income and expense tracker, To make sure that your expenses are in line with income.
3) 50/30/20 rule
The 50/30/20 rule is gaining quite popular among people. The following rule suggests that you should spend 50% of your income on essential expenses like Rent, Food, Travel, etc. And spend 30% on non-essential things like movies, restaurants, etc. And the last 20% to save, invest, and pay off your debts.
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