What's a reasonbale percentage of income to spend on rent??

1stepforward_2stepsback_2

I am looking at moving out from home again, only this time I want to make a better job of it.

I have some idea of what I will be spending on food, phone bill, etc. but am trying to work out how much of my income is a reasonable amount to spend on rent? And there for how much of a deposit I should be saving before I even think about starting to look

I had to move back home after over stretching myself and then losing my job with nothing to fall back on so this time I really do want to get it right

bmunky7

It obviously depends on your income overall and other expenses but more than 1/3 of income on rent would be getting towards the higher end of the scale, my first flat I paid a 1/3 of net income on rent.

olly300

There is no reasonable amount it depends on a lot of things.

For example if you rent a place where you can walk to work then you can spend more money on rent then if you rent a place where you have to spend £200 a month to travel to work.

If you rent a place where the bills cost £200 a month then you can spend less on rent then if you rent a place where the bills cost £75 a month.

What you need to do is calculate roughly from each location you are looking at a place to rent how much it costs you to go to work. Then subtract things like food, clothes, leisure activities, hair cuts, presents, mobile costs and debt repayments* from your take home salary.

What's left is the amount you have left to spend on rent and household bills. Household bills include council tax, electricity, gas and water rates. Plus if you are moving into a houseshare - landline rental and internet costs.

*There are other things but I can't think of them all at the moment.

Jowo_2

See the Budget Planner on the Tools part of this website to help you calculate this.

Guitar

It really depends on how much you earn. As has already been pointed out, I'd be willing to pay more on rent if I save it on travel costs.

But as a rough guide I've always followed that if rent is above 1/3 take home pay I know I'll struggle to get by.

If I was taking home as much as £2k a month I'd probably consider a £1k per month city center flat because of the enhanced social life.

funkymonkey

well as a couple with a joint income of 3200 our rents have varied - our first house was £900 a month - but that was a beautiful house. Don't forget that council tax can easily add over £100 as well. so that was nearly a third and it was a struggle (hence my signature!)

We now live in a tiny 1 bed flat which costs £480 a month so even with council tax its less than 1/6th of our income and once we have paid off the debt pile - in about a years time we will be laughing

PasturesNew

I'd say put down £200 for basic bills (gas/water/electricity, contents insurance, TV licence, broadband, phoneline, council tax).

Put down £150 for food (you don't need this much but put it down anyway).

Put down your transport costs to get to/from work.

Then add in your rent amount.

What's left? That's the thing. If it's over £1000 you're rolling in it. If it's under £250 you can't afford it. Between the two is down to hobbies, holidays, clothes spend and fun.

1stepforward_2stepsback_2

Thank you for all the help, my take home pay is about £800 at the moment not including over time which I do do often enough but at the moment I am putting the extra in to pay off debt, when I can that is.

I what to stay around where I grew up which is rural so need a car but hadn't thought that I needed to be counting that cost as well! So silly, at the moment me and my mum share as I have a work van when I am there but if I'm not living at home I will need my own transport

elfen

Look at travel and rent costs in the local area, then look at them if you moved closer to work. Which one gives YOU better value?

tek-monkey

I take home £1350, and it costs me £350 for all bills apart from food. This is a 3 bed place but we house share, which saves a fortune. At the place I am buying however (should it ever happen) this situation will almost be reversed! A lodger will be helping out though, bringing my own contributions to below 50% of my takehome

Fire_Fox

1stepforward_2stepsback wrote: »

Thank you for all the help, my take home pay is about £800 at the moment not including over time which I do do often enough but at the moment I am putting the extra in to pay off debt, when I can that is.

I what to stay around where I grew up which is rural so need a car but hadn't thought that I needed to be counting that cost as well! So silly, at the moment me and my mum share as I have a work van when I am there but if I'm not living at home I will need my own transport

I'd be amazed if you can afford to run a car AND pay rent/ bills on your take home pay. Can't you live on a public transport route when you move out? I live in a city centre, literally on the main bus route to pretty much everywhere.

This is the budget planner used by the Debt-free Wannabe board, it's helpful as it reminds you to include such things as Xmas pressies: http://www.makesenseofcards.com/soacalc.html