What % of your after-tax income should be rent?
Looking at Studios in NYC right now and finding pretty perfect places a few minutes from my office that are 36%-40% of my net after-tax monthly income. Is this a good range for the % of my monthly income which I should allocate to my rent?
Side Note: the salary I’m basing these calculations on are for the worst case scenario of my total comp because my company bases their guaranteed salary on a 35-hour work week so that older employees that want to work less hours but still get the benefits still apply. My manager told me my hours would be more like 45-50/week, which would make the % I’m spending on rent lower than 30%, but I want to be prepared for the worst case scenario. Thanks!!
40% is pretty dang high...I think mine was always in the 20-30% range.
Wb like 35%-36%
I guess it depends on what you would like to save, it would be good to make a target and see if it maths out for you. That's higher than I would be comfortable with. I'm in business school now, but when I graduate it will be something like 20% in after-tax dollars.
Ahhh, so since I am a new undergrad graduate, would you recommend to still stick to the 20% range, or given my comparably lower salary I should shoot for higher?
Yeah, it's a little different but I just think you should get rid of the 40% idea you mentioned. I don't see anything wrong with ~30% personally.
30%
20-25% is what I’d be comfortable with. Excluding bonuses and assuming 2 paychecks per month if you are paid bi-weekly (there will be months where you get 3 paychecks).
Depends on how much you're making (if you make more, % goes down). So don't compare analyst pay to post-MBA pay
Depends on your age/tenure (gotta transition out of dorm life at some point). So if you have a girlfriend/boyfriend, you might justify a little more (gotta keep everyone happy)
Depends on where you live (should not be high unless you're in NYC or SF where it's hard to avoid).
And depends on lifestyle...if you like to travel a lot or are developing expensive habits like luxury watches or luxury cars (although these are kind of ridiculous things to spend on, I know plenty of people that do for some reason...), then spend less on rent.
And whatever % you decide is appropriate to pay on rent, it should be based on 2 paychecks/month...not that 3rd paycheck/month, not your bonus.
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