To be approved for a rental property, the cost of renting should generally by no more than 30% of the applicant’s net income. This a key thing that property managers consider when reviewing a rental application. So, if you’ve secured a rental property, how do you budget for the rest of your household expenses? The key thing with budgeting is getting the balance between the lifestyle you enjoy living and being honest with yourself about how much this lifestyle costs each week. We’ve listed some common living expenses below and how to budget for each of them.
If you haven’t set aside a grocery budget yet, go through your bank statements or old receipts to get an idea of how much you spend each week on groceries. Once you have an understanding of the average amount of money that you spend on groceries write down a specific dollar amount to stay under. It’s important not to be too tight here and be honest with yourself about the cost of buying groceries that help you feel fit and healthy. For example, that yoghurt you love that’s a couple of dollars more expensive than other yoghurts? If you know you love it and you want to buy it each week, factor that into your budget. Keeping a balance between buying what you love while staying within your budget will keep you from blowing out your budget because you were too restrictive in the first place.
Gas and/or electricity
Utilities bills are often the next largest expense after groceries in a household budget. If you’ve been using the same utilities companies for a while, and have a history of bills you can review, go through your old bills to get an average cost of your gas and/or electricity bills. If you’re only just establishing your utilities accounts, and don’t know how much your bills will be, there are tools on the websites of utilities companies to help you estimate your monthly costs. You can also call your utilities companies to get a rough estimate of how much you’re likely to pay each month based on your energy usage at home.
Health insurance or health-related expenses
Estimate the monthly cost of health insurance if you have it and other medical expenses by going through your calendar for the previous months and tallying up the money you have spent on health-related expenses. These expenses might include massages, medication, gym memberships, physiotherapy and sporting team fees.
Estimate how much money you spend on public transport by seeing how much a one-way fare is from your home to your usual destinations such as work. If you have a car, you could go through your bank statements and other car bills such as your insurance to estimate your monthly expenditure for transport.
Once you have an estimate of your monthly costs for your living expenses, add this together with your rent to understand the essentials that need to be covered each month. Remember, everyone is different. For specific advice and information for your personal finance, you should seek the advice of a finance professional.