To determine how much you can or should pay for rent, most financial entities recommend not going above thirty percent.
The measures used are usually 20, 30, and 40 percent focusing on what you’d like to spend to determine how much rent you can afford when looking at apartments near Gramercy Park East Side Manhattan.
How Much Of Your Income Can You Spare For Rent?
The amount to spend on rent relies on several factors, the main one being your income and where you want to live.
The typical starting point most experts recommend is 30 percent of the income, but there are two other markers.
Frugal: 20 Percent
Usually, if you spend about 20% of your income on rent, you can afford more on fun things you desire or save more.
But spending about 20 percent on housing means that you must stay away from more posh apartments, particularly in the pricier cities when you earn a regular income.
But if you are the kind that doesn’t care if you have to settle to save some rental money, then 20 percent is ideal.
Magic Number: 30 Percent
The gold rule when you try to figure out the amount you can afford to pay is to spend about 30 percent of your salary on the rent.
With that percentage, you can balance enjoyment and financial stability. Simultaneously, you should have some money left to meet your debt and to save.
Especially when you think you found your perfect home, you can find it very compelling to splurge on rent.
You should afford an apartment in a better area or something spacious if you earn a higher than average income.
However, keep in mind that ten percent extra splurging comes with risks each month. It’s always wise to make your budgets include daily costs, so set and follow the account.
Finally, whatever you choose, make sure you’re comfortable and that you do not end up in debt.