Home truths
Tuesday, January 23rd, 2007
A home is typically the biggest expense or investment for most people. Whether you’re renting a place, or paying your mortgage instalment, you’re likely to be spending anywhere from 20 - 30% of your takehome pay on housing. The exception is when you’re living with parents; but that isn’t something that lasts for ever.
There are several ways to save on home expense, without compromising on the quality of your life. Consider the following, when renting a home.
- Find the right size for your needs. A mansion doesn’t make sense for a single or even newlyweds. Apart from the direct costs, maintaining the place adds more expense to your monthly budget
- Alternate locations. Some districts tend to be more expensive; you could find bargains close by but not considered part of the exclusive area.
- Daily commute: If you’re staying far away from work, or need to drive long distances for groceries, add that expense to your housing budget, and then decide whether you have a bargain.
- Sharing a place : Typically, this makes sense for singles; however, make sure that you aren’t getting hit with extra expenses because of location or maintenance.
As a thumb rule, rental expenses shouldn’t exceed 25% of your take home pay; around 15-20% is good.
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