Related Posts
401k Roth or traditional 401k?
Additional Posts in Consulting
Where can I buy big four swag?
Pro
Best books on leadership and sales skills?
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.
A rule of thumb I have heard is housing costs should be no more than 30% of your gross pay. If you want to be conservative, let’s look at this for net pay. Assuming 30% for taxes, post tax your take home is: $100,000 x 0.7=$70,000.
Then, ($70,000 x 30%)/12 months = $1944 housing budget monthly. If utilities are close to $100/month then you are right on guidance.
This is a personal preference. By rule of thumb and numbers it is not an unrealistic amount to pay in rent. That being said, I personally did not spend $1850 on rent when my salary was $100,000. I lived with a roommate and paid about $1100 because I didn’t mind the roommate and wanted to prioritize savings and travel (in Chicago for reference). I had many friends who did pay more like $1600 for a studio or 1 bedroom.
Only you can decide what’s most important to you!
I paid $1600 for rent when I was making $100k and it was very doable. As long as you don’t have debt you’ll still save a decent amount
Not sure I would have paid that much if I had student loans or a car payment at the time though
I pay the exact same on a similar salary, and feel pretty comfortable. I live in a major city, but I still put a reasonable amount in savings every month. I am debt free though, and am very much a home-body who enjoys their personal space. Been traumatized by enough roommates to not want anymore repeats lol.
On the same page - glad to hear this.
I paid $1650 on 70k right out of college and it was fine
That’s too much. If you live in HCOL or MCOL, find roommates, if in LCOL like Texas or Midwest, you can find plenty of cheap high quality apts for ~$1,000-1,200. For 100K income, I would feel happier if my rent is under $800.
Personal experience: Midwest-based McK $200K base and $1,100 rent for 1 bd apt (wifi is $50 and other utilities+trash $70-80), 1.2 mile from the office, could have gone for as low as $700 a bit farther in the suburbs but then I may find myself grumpy on snowy or rainy days.
I live in Austin making 95k, and spend $1650 on a 1 bedroom apartment that was brand new construction. I’m 10 minutes from downtown on the east side. 🤷🏻♀️
You would feel more financially comfortable with a roommate that contributes half. However, some people would pay to not have a roommate.
Personally, I have always had a roommate, and it’s helped me save more. It also made me more social because I only used my house to sleep and get ready in. Now, I own two houses.
I think my rent was $1300/mo when I was at $100k and I lived solo in in an MCOL southern city. But the apartment cost went up consistently $50-$100 a year and I eventually opted to rent a town home with a good friend as a roommate. A lot more space and ultimately still paid about $1500/mo. Landlord never increased our rent for 3 years
I was paying $2100 on a $100k salary few years back
This depends on your other fixed spends, how much rainy reserve and restrictions on breaking your lease. Some states that have to try and rent your spot and they cannot charge you if they rent it. That is a different risk level that other areas.
I know its old school, but do a budget. Go back the last 4 months and account for every dime you spent. Categorize into fixed and discretionary. If its closer to work, so reduces commute spend, include wifi but your paying extra now, make all of those adjustments. Do you have to cut back on your discretionary spending to make it work? If so, it is likely to cause you too much stress.
For me, I value nice surroundings. I need a nice environment at the end of the day. And roommates......would have to be a unique set of circumstances for me to go there.
That’s fine. My mortgage, insurance, tax, and PMI totaled $2300 when I made 100K
No, it's not too much. If your annual income is greater than 40X rent you're fine.