Is this rent out of my budget?

Submitted by zxhugh t3_z94rh9 in personalfinance

Hey there, I know this is very specific but any help I can get would mean the world. I am a 26 year old making $40,000 a year and $2500 a month after taxes as a full time salaried employee. I live in an affordable midwest town and was working as a bartender last year that helped me save up quite a bit, but no longer will be working there in 2023.

My current monthly debts average about $800 month not including rent. I don’t live lavishly, my only vice may be eating out frequently. I have been living in an apartment that costs $663 a month and the place im currently looking at is $1050 a month. Would 1050 a month be too much for me?

Thanks in advance :)

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clone162 t1_iyf31bs wrote

My experience has been you can pick 2:

  • spend more than 30% of your take home on rent
  • save for future goals or pay off debt
  • hobbies/social life/eating out
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shhoooop t1_iyf037e wrote

$1050 is too high. $663 is great.

If you want to live in the $1050 per month apt, you’ll need to increase your income.

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Main-Inflation4945 t1_iyf5hlq wrote

You need to reduce your $800/mo debt payment before you consider upgrading your rental situation.

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buttonjustify t1_iyezltf wrote

Yes it would. Your rent should be a third of your monthly take home. Rent costing $1050 would be 42% of your monthly take home.

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TheBrewkery t1_iyf1ilc wrote

I mean, everything goes by a rule of thumb. "Good financial practice" would be to keep your rent no higher than a third of your take home. If you dont spend much and youre ok to not be saving much then you can go for it. Just make sure you have a decent emergency fund as that apartment will limit your flexibility for rainy days

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