Add another Source of Income
Based on the income information provided the right amount to spend on rent is $0.
Your monthly income is $5,000 before tax. That makes your net income after taxes approximately $5,000.
Having $5,000 at your disposal every month, a good rule of thumb is to spend around $0 on rent which makes 34% of your monthly gross income.
Now you will have around $3,500 left for other common living expenses. Around 10% should go to savings and the rest can / should go to everyday expenses like food, clothing, bills, etc.
If you’d like to live in luxury, you may choose to spend more money on rent and save up less.
So that you can live in luxury but still stay within the “healthy” budget we recommend do spend no more the $2,000 per month on rent.
Spending more than $2,000 on rent will impact your spending ability on basic necessities and might negatively impact your life quality.
Also, it is a good habit to save some money every month as well as put some money aside for emergency expenses.
Knowing how much rent you can afford can reduce the time spent looking for a new apartment and avoid being denied by an apartment complex or being asked a large deposit.
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