How much rent is too much?

moconnor

Hi folks,

Im looking to move out into a place of my own and I've been researching non stop into how much I can afford. Ive trawled this forum and the web in general for hints and tips. Basically I would like some advice and hopefully from those who have been there before.

I have an Annual Gross Salary of 20,000 and I also do some overtime as well as another job as a waiter which normally is around 1,200 for the year.

In total my monthly income is around the 1400 mark. I have been looking at places in the 500-600 range and I dont know if that's right. Is 600 too expensive or is it ok? I have a spreadsheet set up with costs and expenses for each month for everything from utilities to broadband and credit card repayments. After everything comes out that needs paid including a £40 a week budget for food, i have around 80 a week left for going out, cinema, buying clothes or stuff for the house etc.

I know everyone is different, but can I live comfortably with that type of income? Im still in my overdraft from student days last year and instead of using the 456 a month I'm limiting it to 80 a week instead so I will slowly get myself out of it over the year/few years.

Thanks for your help in advance

missprice

Can you live with £80 per week?
I don't know if you can and no one here knows if you can.
I don't have that much spare per week but I manage just fine.

Tixy

I'd think you could manage with that level of rent, but would be likely to need to live fairly simply.

If you have debts with credit cards and an overdraft it is likely to be tough to manage and service those as well. If you run a car or have travel costs then it will be even harder.

How confident are you that the spreadsheet you have covers all outgoings for running a home? especially if you haven't lived alone before?

It might be useful to have a read through a list of outgoings such as the one - to see if there is anything on there that you might have forgotten to account for (obviously not all will apply to you but its a handy check sheet).

Rent
Council tax
Electricity
Gas
Oil
Water rates
Telephone (land line)
Mobile phone
TV Licence
Satellite/Cable TV
Internet Services
Groceries etc.
Clothing
Petrol/diesel
Road tax
Car Insurance
Car maintenance (including MOT
Car parking
Other travel
Medical (prescriptions, dentist etc).
Pet insurance/vet bills
Contents insurance
Life assurance
Other insurance
Presents (birthday, christmas etc)
Haircuts
Entertainment
Holiday
Emergency fund

princeofpounds

You'll get a bunch of people coming along telling you that the rule of thumb is a third of your take-home pay. That's a pretty dated rule.

In reality, most of the graduates I know in the SE end up having to pay 40-50% of their take-home pay. This dipped a bit as their incomes rose but 33% is just an aspiration for almost all of them.

So I'm not too surprised with the figures you give. Whether it works or not depends largely on the rest of your lifestyle, just don't commit to anything too long-term initially and you'll work it out quickly.

LEJC

Everyones needs and wants are different and TBH I believe you cut your cloth according to your circumstances...
If you have done your research correctly then it seems as if you can indeed live on the amounts you quote...

Although something to factor in would be the set up costs of the rental property.....have you considered the agency fees and likely deposit on the property...this can sometimes be quite costly so its always good to have some savings behind you.


Where and how are you living at the moment...?

clw1

In short yes you can afford the rent but it will be tight and you have to decide if you want to live with that little spare cash.

Personally if it was me I would try living off the £80 p/w for the next 3 to 6 months and see how it goes, if it's ok then sign up for the flat and in the meantime you will have saved a little up for debt repayment or as an emergency fund.

moconnor

Tixy wrote: »

I'd think you could manage with that level of rent, but would be likely to need to live fairly simply.

It might be useful to have a read through a list of outgoings such as the one - to see if there is anything on there that you might have forgotten to account for (obviously not all will apply to you but its a handy check sheet).

I have the majority of those covered. The things like
Rent
Council tax
Electricity
Gas
Oil
Water rates
Telephone (land line)
Mobile phone
TV Licence
Satellite/Cable TV
Internet Services
Groceries etc.
Petrol/diesel
Car Insurance
Car maintenance

The rest haven't been listed as they don't apply or they would come out of my weekly amount that I'll take. I have a few money saving options like getting my fruit and veg from the market every weekend as it's so much cheaper and I can walk to anywhere because Im looking to move to a relatively close area to the city.

Problem is, there are very few 6 month rents here. 12 month is the standard and it's hard to gauge without taking an amount out every month from my pay while Im still at home with my parents. problem is I know id spend more here on travel as its a good distance from the city. I already pay 300 into the house and can live comfortably at the moment.

I know everyone is different and it totally depends on lifestyle, but I dont see my life as particularly extravagant. I like to go out for dinner or to the cinema but I dont necessarily do that once a week. I love cooking so I always like to cook from scratch and I work from home so Im not travelling excessive amounts either. I love to have people over for dinner or drinks and I think my money would go on nice kitchen and dinnerware stuff to be honest... But as mentioned, I think you live within your means when you have no choice but.

LEJC

If you are living at home with parents at the moment,its an ideal oppurtunity to try it out....you say you put £300 into the house at the moment so also put £300 ointo a savings account along with an amount that you feel would represent bills etc...


That way you will be able to see what living on your proposed budget is really like as opposed to just on a printed spreadsheet.
During the time that you are doing this it will also hopfully increase savings for you which may be needed when you eventually move out.

NobodysChild

moconnor wrote: »

Hi folks,

Im looking to move out into a place of my own and I've been researching non stop into how much I can afford. Ive trawled this forum and the web in general for hints and tips. Basically I would like some advice and hopefully from those who have been there before.

I have an Annual Gross Salary of 20,000 and I also do some overtime as well as another job as a waiter which normally is around 1,200 for the year.

In total my monthly income is around the 1400 mark. I have been looking at places in the 500-600 range and I dont know if that's right. Is 600 too expensive or is it ok? I have a spreadsheet set up with costs and expenses for each month for everything from utilities to broadband and credit card repayments. After everything comes out that needs paid including a £40 a week budget for food, i have around 80 a week left for going out, cinema, buying clothes or stuff for the house etc.

I know everyone is different, but can I live comfortably with that type of income? Im still in my overdraft from student days last year and instead of using the 456 a month I'm limiting it to 80 a week instead so I will slowly get myself out of it over the year/few years.

Thanks for your help in advance

I think that I would struggle with that, but each to their own. I actually think that 'rent should be no more than a third of your income' is a good rule of thumb to go by in many cases. If you have £800 left for the month after rent, then that is OK, but you're not going to have tons of money left over. Once the bills have been paid, (and any monthly loan or credit card payments you may have,) you are not going to have much left.

Paying £600 on your own for rent, when your income is only £1400 is quite a chunk out of your wages. Especially, as you say you are still in your overdraft, and you have credit card bills etc. Is it an option for you to house share? (So your rent is say £300 a month or thereabouts, and you can share bills too.)

Tixy

moconnor wrote: »

I already pay 300 into the house and can live comfortably at the moment.

If you can live comfortably at the moment then it would make more financial sense to pay off your credit card and overdraft now before you move out rather than taking the next year/few years to repay.

That will help you see if you can live on your planned budget and will make it easier when you do move out, as you won't have old debts to service.

Jackt90

£1400 - £600 = £800

Say you've accounted for £240/month for bills and food

You're saying you have £320 left over for MISC.

That's £800 - £240 say - £320 = £240.00 in other commitments.


I know I'm not answering your question per se, however, my advice would be to stay where you are, save the £800 or so each month, cash in the bank, and see if you can manage, at least then you're not balls deep in trouble should it be a problem.

Also, if you manage to achieve this, for say 6 months, you've saved roughly £4,800. This will more than likely drag you out of any overdraft you're in, maybe clear a CC or any bad debt and leave a buffer to take forward. Because £80 is ok, per week, but you'll be trapping yourself into the rental market and as soon as an unforeseen bill or expense hits you, you'll be struggling.

Just a thought.