I think it is because my rent is too high for my salary. What is the best way to work out how much I should be spending on rent every month compared to other living expenses?
A: The golden rule is that you should spend a maximum of 30% on housing each month. Why this amount?
By limiting your expenditure to 30% of your nett salary you are ensuring that you have enough budget to pay for other living expenses including transport, food, education and other essentials, as well as potential savings or reserves for unforeseen circumstances.
In terms of reducing spend on housing each month, I suggest downscaling and making sure that you have flexible lease terms which work in your favour.
Consider the current economic environment we find ourselves in and take a look at your immediate environment – perhaps you are paying for space or amenities (like those in an off-plan development) that you are not using. Shop around in your area to compare prices.
Other ideas might be to rent out unused space in your property, for example a garage, to someone looking for additional storage space or let a bedroom to someone who will then share your living space as well as the cost of utilities.
Be sure to get permission in writing from your landlord prior to subletting any portion of the property. – Grant Smee, managing director of Only Realty