- Start with the basics. Any personal finance resource will tell you to start with the one-third rule. Divide your monthly income by three. The number you get is your budget for housing expenses like utilities, internet, daily transportation, and, of course, rent. If your monthly income is irregular, you can use your annual income instead. Just divide by 36.
- Then, do your research. Look into typical expenses in the neighborhood. How much does the local laundromat charge? If you want to rent a parking space, how much will it set you back? Are you paying for water separately, or is it included in rent? How much do people in the building typically pay for utilities each month? Before you check out an apartment or meet with your new landlord, write your questions down to make sure you do not forget them.
- Finally, reflect on your lifestyle. The one-third rule is really more of a guideline. Depending on your habits and priorities, it might make sense to spend a little more or a little less on housing expenses. For instance, homebodies who do not spend much time traveling or eating out, but really value their space, might devote some extra money to a big, comfortable apartment. But globetrotters and nightlife enthusiasts who spend less time at home might set a smaller rent budget and free up more money for other interests.Now that you have some strategies, look at the numbers. Plug your income into our rent calculator to set your housing budget.