Dave Says: Determining How Much You Can Spend On Rent

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Posted: Jul 10, 2020 9:26 AM
Dave Says: Determining How Much You Can Spend On Rent

Source: AP Photo/Don Ryan

Dear Dave,

I just received a formal job offer in law enforcement. I’m debt-free, single, and I’d like to move out of a roommate situation and into my own apartment. I’ll be starting out at $34,000 a year, then moving up to $38,000 after my probationary period. You have a rule that says to make sure rent or house payments are 25% or less of your take home pay. If I can find a place where utilities are included, do they figure into that amount? 

Josh

Dear Josh,

It’s really more of a guideline than a rule. The point of not letting your housing cost eat up more than 25% of your take home pay is to make sure you have money left over for other important things. It’s hard to save and invest for the future when a huge chunk of your money is eaten up by rent or a mortgage payment each month. But no, utilities are not part of the one-fourth of your take home pay guideline.

At this point, it doesn’t sound like you need anything fancy. Try to find a safe, quiet place to call home—somewhere you can relax and decompress when you’re off duty. And thanks for entering law enforcement. A lot of folks are leaving your line of work, and we need good men and women in that profession right now. 

—Dave