I relocated to Bangalore after getting a job here. My father, who is also my go to financial advisor, assisted me in establishing boundaries around how much should I pay for rent. As per his guidance, I follow the 30% rule, which states that I should only spend 30% of my salary on rent. But what suits one person might not suit another. Rent affordability is influenced by lifestyle, income, and other financial obligations such as daily expenses and EMIs.
How Much Should I be Paying in Rent?
To determine how much rent you should pay, use these two popular budgeting techniques:
The Rule of 30%
Rent should not exceed 30% of your overall yearly income. For instance, set aside Rs. 3,00,000 for rent if your annual income is Rs. 10,00,000. However, this isn't always feasible, particularly in big cities with expensive rentals.
Apply the 50/30/20 Rule
The 50/30/20 rule is a simple way to figure out how much you can afford to pay for your rentals. With this strategy, you can set aside 50% of your monthly income for necessities, 30% for wants, and 20% especially for debt repayment and savings.
Therefore, if you make Rs. 10,000,00, you might most likely spend it as follows:
Rs. 5,00,000 to cover necessities like groceries, rent, utilities, insurance, and minimum payments
Rs. 3,00,000 for desires such as shopping, leisure and entertainment
Rs. 2,00,000 can be set aside for debt repayment and future emergencies.
Additionally, take into account location-related costs that may affect your total affordability, such as commuting or access to amenities.
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When you are out in the market looking for rental accommodation, there are various factors that are taken into consideration. You look at finances, location, amenities, condition, legalities, etc. In this answer, we will talk about “how much should I pay for rent">Find out the right rental amount payable to the landlord using NoBroker Rentometer
How much should I pay for rent?
Lucky
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2021-07-27T16:40:21+00:00 2021-07-27T22:39:36+00:00Comment
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