Living expenses are constantly on the rise and in these tough economic times, having a budget is extremely important. Making sure that salary you earn can service all your basic needs and that you have some left over at the end of the month for your savings is important for every South African, young and old.
Rent will be one of those key expenses for many and it is important to remember that before you go apartment hunting, you first need to plan out a realistic budget and stick to it. Additionally, you need to view and compare units that you are within your price range and not tempt yourself to overspend on a property you cannot afford.
Set aside that 30%
It is generally understood 30% of your salary should go towards your rent. This take-out comes after tax and other deductions– so that they can also cover all their other monthly expenses such as transport, food, electricity and water, car and other debt repayments, school fees and cell phone costs without financial strain, and be able to save something for emergencies or retirement.
According to the BankservAfrica Disposable Salaries Index (BDSI), if the average disposable salary is R14 154 the budget for rent should be no more than around R4 250 per month.
Additionally, PayProp statistics also show that male tenants currently spend an average of 23.8% of their net income on rent, while female tenants spend an average of 27.7%, owing to the fact that their salaries are generally lower.
The latest PayProp Rental Index (Q2 2017) shows that even though the national average rental currently being paid is just over R7 000, more than 35% of all tenants across the country essentially do rent for less than R5 000 a month, with the next biggest percentage (31.75%) renting for between R5 000 and R7 500 a month.
What to remember
While it might seem easy, it is important for new renters to draw up a list of all of your monthly expense and see how rent you can afford. Likewise, if you are currently playing too much rent at your current residence and if it consuming too much of your disposable income – then perhaps moving to another place within your price range is the best decision.
Lastly, it is highly likely that you not be staying in the same place forever. For that reason, you need to take into consideration extra expenditures such as utilities, furniture, and several deposits, so it might be a good idea to rent for even less than 30%.
Budget, Budget, Budget
If you do not budget, it does not matter how much the percentage is that you set aside for rent, you will not find yourself in a safe and secure financial situation come the end of the month. Budgeting empowers you to live comfortably and give you power over how your life and while helping you those sleepless nights.
If you need advice on your eviction case or would like us to represent your case, get in touch with Le Roux Attorneys