Hello r/personalfinance,
I've been lurking around for a bit and reading a bit on budgeting, but I can't seem to come to a conclusion. I'd love to get your opinions.
I am 21 with a salary of 84k/yr gross, or approximately 4.8k/month net. I was previously working as a contractor for the same company for 73k/yr but I was offered a permanent job as a full time employee, therefore I believe it is unlikely I'll be fired in the short term. The company I work for also has a very low turnover rate. To avoid traffic, I wake up at 6:00 and I work from 7:00 to 15:00.
I am married but we have no kids, no debt and no car. We do however have two pets.
I want to rent a brand new luxury apartment for 2.4k/month, which exceeds the 30% rule ((84000/12)*0.3=2100), but because I have no debt and no car as well as the reasons that follow, I am unsure whether I can afford it.
The rent includes:
- Electricity (temperature control included)
- Water
- Gas
- Access to a gym (note that I and my wife do want to be more active, so this is also important to consider. While there are clearly alternatives, a gym would make it much more convenient)
- Common rooms (this is important. We have no social life, and while the rent is low where we currently live, there is practically nobody to socialize with. We don't want to miss out on our youth by staying inside all the time, and this is going to be a big help)
One of the most important point is that I currently have to commute 1 hour to get to work and 1 hour to get back home. I hate this. If we were to get the new apartment, I'd be 15 minutes of walk away from work, which also goes toward my goal of being more active and would also make me feel less pressured about working very early (I won't have to worry about traffic, because I'll be walking back home)
My wife also has an income doing graphic designing from home. On a good month, she can make up to 2k net, but on average, it's about 1k net a month. Her income is dedicated to the "wants" whereas mine is dedicated to the "needs". The extra goes to saving.
We pay:
- 159$/month for our phones
- 66$/month for internet
- 60$/month for online subscriptions (e.g. Netflix, Spotify, etc)
- 100$/month for meds
I am fully aware that it would probably be more financially responsible to get a lower cost apartment rather than that luxurious apartment, but that apartment really has all we need and we feel that everything about it is perfect, other than the cost, of course. Also important to note that it is one of the few apartments that allow pets in the area. There are some less expensive ones, but we feel that we need at least 2 bedrooms (one for our bedroom, one for the office). We could rent a studio and it would be less expensive, but I'd feel too cramped. I also work from home once a week and I have video meetings in the mornings, which would wake up my wife if we were to live in a studio.
The apartment is still under construction, but we'd move out in July.
Here is the budget I made:
| Name | Money | Notes |
|---|---|---|
| Monthly (gross) | 7000.00$ | (Included in table for completeness) |
| Monthly (net) | 4817.00$ | |
| Pay deductions | -300.00$ | |
| Rent | -2400.00$ | |
| internet | -65.48$ | |
| phone | -159.00$ | |
| electricity | 0.00$ | |
| necessities | -700.00$ | Includes food and hygiene stuffs. We could definitely cut down on the food here. |
| subscriptions | -60.00$ | |
| Misc (meds) | -100.00$ |
Excluding my wife's income, we'd have a little over 1000$ left, which would go directly in our savings.
Can I afford a 2400$ rent?
Thanks for the advice.
UPDATE: Thanks for all the good advice, we appreciate it a lot. I'm currently unable to answer to each comment, but as soon as I get home, I'll read and answer each comments (if necessary).
Submitted February 09, 2019 at 01:34PM by TwinProduction http://bit.ly/2RTcU1M
