Can You Handle the Increase in Rent?

An increase in rent, no matter how small, can have a devastating effect on your budget, particularly if you’re already living paycheck-to-paycheck. Even if your situation is not so dire, you may find that having to put aside more money each month for rent can stop you from paying off other debts in a timely fashion or putting away money in savings. When facing an increase, evaluate your circumstances to see if you can handle the new rate or you need to look for a cheaper apartment.

Evaluating Your Income

Making (and sticking to) a monthly budget is always a good idea, but it’s especially essential when you find yourself wondering whether or not you can afford your current lifestyle because of an increase in rent or another expense. The first step to making a budget is to evaluate your income. This includes your paycheck, minus what goes to taxes, as well as anything else that brings in money on a consistent basis, such as stocks, savings, and any part-time odd jobs you do or sales you make, such as online auctions, craft sales or offering your services for cutting lawns or running errands.

If the latter income isn’t consistent, look over the past few months and try to come up with a monthly average.

Listing Your Expenses

The next step to making a budget is to list all of your monthly expenses. Start with the necessities, making sure to account for your increase in rent. The necessities include rent, utilities, groceries and paying off debt. Then you can list other expenditures which are important, but not quite as essential, such as:

• car maintenance and gas (only not as essential if you live in a place with good access to public transportation)
• cable TV
• Internet
• phone (not realistic for everyone, but if you have a cell phone, you don’t need a landline)

Last but not least, list how much you spend on average each month on extras, such as shopping for things you don’t need and dining out. You should also list how much you put aside into savings, for emergencies and financial security. If you don’t actually already put any money in savings, you should start now. Start with saving at least $50 a week.

Balancing the Budget

Here’s where you can tell if you can handle the increase in rent. Compare the total of your monthly expenses to the total of your monthly income. If the expenses greatly outweigh the income, you likely can’t afford the increase. If expenses are only a slightly more than the income, you may be able to afford the increase by adjusting your current lifestyle.

Cutting out the Excess

To free up more money to put toward the rent, start by cutting out or cutting back on the extras. Get rid of the cable and rent DVDs for free from the library instead. Stop eating out and cook at home more often. Trim out the daily specialty coffee and don’t shop for things you don’t need until you can pay off debt and free up more income.

Depending on how significant your increase in rent is, you may find that you’re able to handle it with a few tweaks in your monthly budget—or you may have to look elsewhere for somewhere to live. What’s most important is that you’re able to devise a monthly budget you can live comfortably with, no matter where you find you need to cut back.