When you sign a lease to rent, you are agreeing to live at that location for a long period of time. In most cases, you will sign a year lease. A lot can happen in a years time. One of the most important things to keep in mind as a renter, is your budget. Your budget must take into consideration all possibilities. The more detailed your budget is, the safer financially you will be.
What if an emergency happens? What if your car breaks down? What if the weather is more extreme than you anticipated meaning you need a new coat? All of these situations are exactly why it is extremely important to know what your rental budget is BEFORE you begin renting.
The first step is determining what your net income is. NET income, not gross. There is a difference and it is vital to know it.
Next, it is a good idea to make a list of current monthly payments and expenses. Things such as car payments, phone bills, and an estimate of how much is spent on food should all be included on this list. This will help give you a better and more accurate idea of how much money you have.
After you have determined your net income and deducted all the pre-existing monthly expenses, then you can finally determine what your rent budget should be. A good rule of thumb to follow is not to spend more than a third of your remaining net income on rent.
For more details and advice visit Budgeting Tips for First-Time Renters.