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In 2021, more than 10 million people couldn’t afford to make their rent payments on time. So, do you also want to creating a budget on rent?
With rising prices for groceries and gas, a rent increase could risk your family’s comfort. The best way to ensure that you can afford to rent a home or apartment is by discovering effective budgeting tips.
Keep reading below to discover the best steps for creating a budget that is reasonable and realistic!
Start with the Basics
If you’re interested in creating a budget for a rental unit or home, you need to start with your financial foundation.
Take time to pull some financial documents out to determine how much money you make. Whether you’ve changed jobs or been promoted, you should calculate how much revenue you are bringing in after taxes are taken out of your checks.
Once you have your total revenue identified, you can add up your utility, grocery, and other expenses for the month. If you put money into a savings account, take note of how much. Subtract the total amount of expenses from your revenue to see how much money is left.
One of the most important things about renting a home is finding a suitable location.
Unfortunately, the prices of rent will increase when you get closer to the city or nicer areas. If you’re planning a move, look for an area with plenty of job opportunities so you can afford your rent in case you get laid off or fired.
Research the areas you’re considering and monitor how rental prices fluctuate between areas. You may have to find a home outside of the city limits if you want more space and a smaller price. If you want to find more homes for rent, reference this site for affordable options.
Set Your Number
Personal budgets can be easily changed, but you want to stay consistent with your finances.
Some people recommend keeping your rent cost below 30% of your monthly income. This number will depend on your spending habits and lifestyle. Keep in mind that you may be responsible for covering the renter’s insurance and a security deposit.
Most one-bedroom apartments cost around $1,000 in the United States. If you’re planning on renting a home, you’ll need closer to $1,600 each month.
Don’t Be Afraid to Negotiate
Many people don’t realize it, but you have the right to negotiate rental prices with the property owners.
It’s common for people to speak with landlords about discounts on apartments and homes. If the unit has been vacant for a while, you’ll have some leverage and may be able to reduce your monthly payments. Pay attention to the rental rates and rules before agreeing to an amount.
Start Creating a Budget for Your Rental
When it comes to creating a budget for a rental, there are several factors to consider.
After you account for your monthly expenses, you still want to leave extra money in the account after paying rent. Although 30% and below is the traditional rule for rent, your prices may vary based on their location. Fortunately, you can respectfully negotiate prices with landlords to agree on an affordable price.
If you want to learn more about rental properties and creating budgets, check out our page for the latest content!