$1,550 X 12 = $18,600 $18,600 goes for rent per year so you're left with 13,400 for other spending. $13,400/12 = $1,116 a month to take care of bills etc and the rest goes to savings. Suffice to say you won't save a lot. Can you make due with $1,116 a month
I assume you are talking about the U.S. and not Sweden, despite your handle. There used to be a formula for calculating how much of your income should go to housing, transportation, saving, etc. But the economy has gone so berserk over the past few decades that "they" (it was probably from academia, not the government) have had to modify it, or else nobody could afford anything. No one can afford to spend more than half their income on housing, especially if you're talking about rent rather than a mortgage. For starters, don't forget about income tax; that takes a nice chunk out of the remainder, even in your bracket. You can dither with these figures if it's a furnished place so you don't have to buy furniture, and if it comes with housekeeping and gardening -- and geeze, for that much rent it should come with a chef too! Nonetheless... You got a car that matches that lifestyle? Or are you living in a luxury apartment and plan to show up places in a 1989 Oldsmobile, or just take the bus and train everywhere you go and spend a fortune on taxis because they don't go everywhere? Clothes? Eating habits? Vacations? What do you do for entertainment? If you're nodding your head vigorously to all this and saying yup I can do this, well then go for it. But I wonder if you're going to wake up one day and question your priorities. I've got a spa but I can't afford to go to the Philharmonic. I can see the ocean from my window but I can't afford to see what the world is like outside the US. My last date loved this place but she/he wants to go to a nice restaurant and I don't have the cash or the outfit. Come to think of it, I'm getting a little bored with my own cooking myself. Maybe this house is really special and it's worth it. On the edge of the forest, on a bluff, who knows. Maybe you have twelve pets and you need what realtors call a "horse property." (I'd think you would have mentioned that, though.) The people who were renting our house before we bought it weren't paying that much and it's really special. (And we do have a lot of dogs.) If you're talking about a house and it's not expensive just because it's in a city, then you might be getting a dream. But if it's just an apartment or it's a place in the city, then all you're doing is financing some landlord's retirement. Save your money and buy a nice place. Which brings me to the next point. If that money is going on a mortgage, then you probably have to come pretty close to the limit. You don't get much of a house for a monthly payment of less than $1500 these days, at least not in the major metro areas. But you probably won't qualify for the mortgage until your salary goes up a bit. Bankers don't like you being so close to the fifty percent line either, much less above it. And most of a mortgage at first is interest so it's fully tax deductible, so the net cost is substantially less than if it were rent. Even taking into account the crap like property taxes. So this has to be a rental. Can you afford it? Only you can decide that. (If you haven't been keeping track of your expenses so you can figure this out with simple arithmetic, then I'd advise you to avoid making such a heavy financial commitment until you become a better bookkeeper.) Should you? I would think not, but everyone is special. Perhaps this is the house of your dreams. (If it's not a house, then just frelling forget it. No apartment or townhouse or condo is worth that much of your money. Trust me!) Will you change your mind later? Perhaps. Don't sign a lease that goes too far into the future. Most landlords will settle for six months. Try for three. Know thyself first.
Perhaps, if you were to live without other things that you need. I'd rather purchase something under 50 percent of what I make after taxes, actual take home that is. Another idea which is to rent a room out in the place that you are buying, but you'll never know how long the renter will be there and who the renter will be or how they will get along with you.
the thing is, apartments in new york are expensive. that might sound like a lot to people from elsewhere but that is the absolute cheapest i found. the only one cheaper is a studio in a not so desirable location and it's only $100 less. let me frame it for you. the apartment i have been living in costs $3500/m but i don't pay for it because i don't work and my parents have moolah. so now i'm getting an entry level position which will give me good experience but i won't get paid a lot. i need to live nearby the university but places to live in the area are few and costly. i suppose i could commute from the bronx but it's really a horrible, noisy, unsafe neighborhood. so do i commute from a faraway place with bars on the windows and maybe have a full fridge or eat ramen on the floor in a place with a concierge?
Swedishfish What about roommates? What about Queens, near long island...for around $1000 you can get a nice apartment, though the commute is a bitch (pardon my language). Roomates is your best bet but I have seen people who live near 34th street for only $900 a month, a nice studio is a lot less because I have personally seen ads for nice studio apartments for around $800-900 a month.....but if you're willing to suffer a little commute then for $1,550 you can get a royal apartment in Forest Hills. It all depends on your location though, that which I do not know so I am just throwing out ideas here.
As a mortgagee, let me advise you. Don't ever commit to a house payment that is more than about 30% of your gross. 25% is ideal, and less than that makes your life so much easier, but the problem is that many banks will approve you up to 45%. That is total horseshit. You don't want to go that route. I refi-d my house last year, and it lowered my house payment almost 30%, but I wouldn't recommend doing that unless you plan to hold that property for at least five years.
When I made 32/yr it stretched my already frugal budget to pay $750/m. Don’t attempt double that. I’d go for a roommate situation in relatively safe Long Island. Figure out how to maximize the train time; pay bills, read, etc. Safety is worth a lot.
Very simple do what I would do: - Depend on a cell phone; don't get a mainline phone and a cell. Redundant. - Take public transport, sometimes it can be a bitch by meh! - Oddly enough unplug things you don't use. Appliances still use energy even if they are "off". - Don't waste money like a place for $1550, you live alone I assume. Why can't you live somewhere a little less expensive? Jesse why don't u just get a condo!
An exception to this 5-year rule is if you can refi at a lower interest rate with a zero-cost/zero-point loan.
There is no such thing as a zero-cost, zero point loan. But yes, in fantasyland, if there were, that would be the obvious way to go.
Yes. That's the reason so many of us wouldn't consider living there for any reason unless we were making about $200K. What amazes me is that so many people do live there. So many that they drive the housing prices up so incredibly high, yet they stay. It must be a really nice place. I understand that, I like cities and New York is undoubtedly one of the world's four or five best. But still, how nice can a place be if you have to live in nearly abject poverty and still have to make a lot of depressing compromises, just to be able to afford it? San Francisco is in the same category, and it's probably the only other city in the USA that would appeal to a New Yorker. No need for a car, neighborhoods, old culture, food from every country, twenty things happening every night, all that stuff. Metropolitan area as big as a small country, but you can still make it to the mountains or the countryside in a day trip. Yet as expensive as it is, it's more affordable than NYC and you get a little more for your money. And infinitely more pleasant weather!
Nowadays you can get food from a dozen countries in any sizable town. I live in the 'burbs; even got Afghani here. I like to visit NYC but can’t imagine living there on a normal salary.
