Hey Everyone! 🙂
If you’re renting a house next year, you’re not alone. In the last post, I focused on the things to consider while renting a house. Remember I told that I would be splitting the topic RENTING A HOUSE into two parts. We would be looking at it from the financial aspect today.
After you’ve considered the conditions around house, now ask yourself – do you have what it takes financially to pay the rent and keep surviving?
This post is for two sets of people:
- The people who want to rent an apartment for the first time; and
- The people who have their apartment but still have to save up for next year’s rent.
Saving for rent can be really tiring and lengthy. It is not an easy process and it takes a lot of discipline to consistently be on track.
If you are new to getting a house, you need to have a realistic picture of the house you want and a rough estimate of the cost. But if you are already in an apartment and need to pay for next year, you have to cultivate a very high discipline to maintain your current condition.
Rule of Thumb
”You have to learn to cut your coat according to your size”.
You cannot be earning an averagely low salary and at the same time trying to rent a house that puts you in debt.
Remember: it is not only about the cost of rent alone but the survival after it.
There is a rule of thumb that suggests you save 20% – 30% of your salary (take home pay). It seems realistic but it’s not easy.
But before we conclude on anything. Let us do a little analysis on this:
Assuming you earn #1,200,000 per annum, that is, you earn #100,000 per month after tax. (This might not be for everyone, but before you consider renting an apartment that costs higher than #200,000 per year, #100,000 should definitely be your minimum salary)
So, if you earn #100,000 per month, you have a choice renting an apartment that costs between #240,000 per year to #300,000 per year if you apply the 20% – 30% rule successfully. Then, you can budget the remaining 70%-80%.
Tips on how to save towards your rent
#1: Take it straight out of your Pay
You should only spend what is left after you’ve removed your rent money or any other money you plan on saving as explained in the rule of thumb. To achieve this:
- You have to constantly create a monthly budget.
- Engage in a standing order – save automatically.
If you try to spend first and save second, you will find yourself running out of money before you get a chance to save. Save first.
#2: Get an additional job
To meet up with your rent or any other financial need or want, considering an additional job is a smart decision if you have the time. You have to take every opportunity that comes your way, so that you can live better.
#3: Split costs with a house/room mate
I have explained this in an earlier post. This option is one of the best ways to cut your rental cost. Splitting your costs helps you meet up with financial needs and gives you peace of mind.
#4: Ask for support:
Do not punish yourself. If you are finding it so difficult to save up or pay your rent, you can ask for support from family or close friends till you find your financial balance.
Photo credit: google images
Kindly share your experiences or contributions in the comment section. Also, I want you to look forward to amazing and fun posts as we approach Christmas. So, follow the blog to receive the posts faster.
Have a great week, and until next time,