Renting a home can be a huge financial leap that many people may not be able to handle right off the bat. According to the U.S. Census Bureau, about 65% of Americans that are under the age of 35 are renting with that market expected to grow. This also means that the millennial generation is making up a huge part of this industry.
How to Budget for Your Rental
When it comes to the overall budget, there are a few things that you do have to figure in to make sure that your budget can handle. You should be taking things like the overall rent, the deposit that you have to put down, as well as things like home maintenance that you might need to use. Knowing how much you should spend on rent can help you budget and get a great outcome.
A great thing to consider would be if you are a custodial parent of a child, it was found that children that are with the custodial parent often spend up to 277 days per year there. This means you need to make sure that you have a home or a rented space that is going to be reliable and spacious enough for a child.
How Much Should you Be Spending?
The first thing to keep in mind with rent is that you should not look to find a space that is going to take up a huge portion of the money you bring in each month. You should look to spend as close to half of your income as possible so that you can spend that extra money on things like food, gas, insurance, and other home maintenance needs that do pop up from time to time.
Corporate income taxes make up about 11% of taxes that are collected by the federal government. This means that money you are sending to a landlord may end up being part of that tax money that is collected. It is important that you do not over-extend yourself in terms of what you can pay. Look for rent that is manageable and that is valued based on what you are getting. If you are renting a space that is not worth the money, it can be very detrimental. Taking the time to find the right option can make a big difference.
Write Out Your Budget
One super helpful thing that you can do is to take the time to write out your entire budget for the month before you ever even start looking for a new place to live. You should write down how much you make, how much you bring in each month, and how much you can spend each month. Write down things like expenses that you are going to have like food, gas, insurance, car repairs, and more.
Having a visual representation of the money you spend and the money you are bringing in can help you see where you are spending the most money and where you can spend money. You need to take the time to look at what costs you the most each month, where you can cut costs, where you can make more money, and so on. Taking the time to write out a budget can help you see what you are doing and see the flow of your money each month.
Renting is a great way to save money and to start building your credit at the same time. Taking the time to find the right options and the right overall place to rent can help you really feel good about the space you choose.