Your annual rent shouldn’t exceed your 2 months’ salary, if it does, you are in the wrong apartment.
Do you spend more than your 2 months’ salary on rent?
It’s a very bad habit though!
This article will guide you on how to spend less on house rent so that you’ll still have some money for savings.
One of the biggest expenses on a household’s budget is housing. In addition to making sure you can afford the rent, finding a rental that fits your budget will allow you to keep enough money each month to cover other expenses and have fun.
You may face eviction if you fail to pay your rent, putting you in a precarious situation. Given the danger you pose, your prospective owners may reject your application if they request guarantees or get in touch with your present landlord.
Spending more than you earn is a problem that is set to become even more disastrous if your spending habit is not checked. People who spend more than they earn always end up broke before their next salary.
To ensure that you don’t spend more on rent than you earn, it’s important to restructure your spending on rent in proportion to what you earn.
Note: To save more money, you should try to achieve spending not more than your 2 months salary on your house rent.
How to Spend Only 2 Months of Your Salary on Rent:
If you must save your 10 months’ salary or invest the same in other productive endeavours, it’s important to take the following points seriously.
Rent a house within your means:
This means that you should rent a house that does not consume much of your monthly earnings. If you get a promotion, do not immediately relocate to a bigger apartment, before making a move to expand, ask yourself these 6 questions;
Can my increased salary pay the new rent?
Is the new salary stable?
Is the salary up to double the previous salary?
Can I cope with the new rent?
What if I get sacked later, can I sustain the rent?
Do I even need to relocate right now?
Do the Arithmetic:
You can do a simple mathematics of determining how much you should save every month from your salary to give you a monthly proportion of your annual rent. Say, you pay a rent of N240,000 annually and earn N120,000 monthly. Divide N240k by 12 months to arrive at N20,000 per month (This is the amount you will save every month to make up your annual rent of N240,000). Meaning you can still save up to N100,000 every month to solve other pressing needs.
Now, multiply your monthly salary by x2 which comes to N240,000 i.e. N120K (January) + N120K (February) = N240k (January + February salary)
Hence, you can either save up your two months’ salary of N240,000 or monthly savings of N20,000 to have the rent of N240,000.
Open a Special Rent Account:
You can also open another account specifically for depositing rents only, this is so you don’t have to tamper with your rent before it’s paid to the landlord.
How to Calculate Your Housing Budget Based on Your Salary
| Monthly Salary | Recommended Rent | Monthly Savings | Monthly Balance |
| N50,000 | 100,000 | 8,500 | 91,500 |
| N100,000 | 200,000 | 17,000 | 183,000 |
| N150,000 | 300,000 | 25,000 | 275,000 |
| N200,000 | 400,000 | 34,000 | 366,000 |
| N250,000 | 500,000 | 42,000 | 458,000 |
| N300,000 | 600,000 | 50,000 | 550,000 |
| N320,000 | 640,000 | 54,000 | 586,000 |