Whether you’re renting for the first time or looking for ways to take the pressure off, learning how to manage rent payments and the rest of your money together will make housing feel low stress and easy to handle. Budgeting is a key part of this and not a skill that comes naturally to us all.
Calculate your income
Before you know what you can afford, you need to work out how much you money you have coming in to provide a basis for the budget calculations. Include here all salary and any part time work payments, pension contributions, and anything else that might be arriving in your bank account on a monthly basis. Add these together to produce your monthly income and then calculate 30% of that income. The general rule of is that you should spend no more of 30% of your income on rent.
Rent within your means
That 30% calculation is a figure you should stick to as you can be sure that you’re renting within your means. It’s often tempting to take a room in a house that is the best you can possibly get but by doing that you will make your day to day life rather difficult, as you’ll constantly be at breaking point with your cash. View a cross section of properties and work out what your deal breakers are and what you’re happy to compromise on – would you take a smaller room in a better decorated place or do you prize space above everything else?
Budgeting for life
You’ve got your figures for income, you’re only spending 30% of that on rent, but what about the rest of it? Budgeting is a key life skill that will help you make sure that you don’t spend the whole time playing catch up with your finances. It’s not much fun – definitely less so than going on a spending spree or buying a fancy holiday – but it’s actually the key to getting many of the things that you want (financially speaking at least) in life. It’s also absolutely essential to make sure that you don’t run out of cash and start missing rent payments, which could cause you to lose the roof over your head. When you’re looking at your monthly budget be sure to factor in food and travel costs, monthly bills such as gas, electricity and broadband, as well as one off monthly costs like a cleaner or a gym membership.
Extra renting costs
It’s not just the monthly costs that need to go in your budget, you also need to factor in to the affordability of a property the costs that come with it that are related specifically to renting. For example, there may be a holding fee to take the property off the market, as well as a fee for the check in inventory. You may want to have insurance to cover your possessions in a shared house and you will need to furnish your room, as well as contribute to any joint costs for shared items.
Disclaimer: This article is provided as a guide. Any information should be used for research purposes and not as the base for taking legal action. The Tenants' Voice does not provide legal advice and our content does not constitute a client-solicitor relationship.
We advise all tenants to act respectfully with their landlords and letting agents and seek a peaceful resolution to problems with their rented property. For more information, explore the articles in our HMO category.
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