2 years ago - 3 minute read
At Fronted, we’re helping renters move and bringing decades of financial experience to renters. Money can be an uncomfortable topic, but it doesn’t have to be.
Here we’ll cover average rent costs but click any of the links to go to:
Part 3: How much should you spend on rent? (Keep reading)
Have you ever wondered what’s the right amount to spend on rent? Or how estate agents judge whether you can afford to live somewhere?
Whether you’ve just started renting or you’re now earning more and want to size up, we break down a monthly budget that works for renters, including a downloadable rental budget planner at the bottom of the article.
Managing a budget as a renter is hard - life is expensive. Though renter budgets will have less fluctuating home-related costs like maintenance costs or repair bills, renters spend more of their income on house costs than homeowners. That means unexpected costs have more of a significant impact on the bank balance.
These costs include:
It is worth noting that people who live and work in major cities like London are likely to earn more. It is more useful to compare your rent spend as a percentage of income across the UK. Lucky for you, we made a handy table so you can compare:
Rent as % of wages (Source: DPS Rent Index, 2019)
Now you have a clear idea of the main things that could increase your outgoings and how to compare your rent spend, it’s time to relook at your overall budget.
Many renters have experienced changes in lockdown including a reduction in transport costs, or needing more space due to an increase in working from home. You need a budget that allows you to put necessary funds behind aspects that will improve your life.
The 50/30/20 monthly budget may work best for you. Rather than just looking at rent costs, assign 50% of your take-home pay for housing, utilities, groceries and transportation, 30% on non-essentials, like clothing, take out, and entertainment, and 20% goes toward your monthly savings.
This will be a better way of looking at your ongoing costs than just focusing on rent amount. You can also adjust the umbrella percentages, creating a budget that you feel most comfortable with.
If you want to quickly work out your current expenses, use the second tab on this Renter’s budget spreadsheets. Simply ‘Save As’ or download the sheet, navigating to the ‘Renter Budget’ sheet.
Missed the first section on ‘How much money do renters need to move?’, click here.
Want to know how you could spread the cost of your rental deposit? Click here.
2 years ago - 3 minute read
Fronted is a trading name of Fronted Holding Ltd. We are registered in England and Wales (Company No.12278750), registered office address is Fronted, The Fisheries, 1 Mentmore Terrace, London, E8 3PN. Fronted Loans Ltd (Company No.12307305) is authorised and regulated by the Financial Conduct Authority under a Consumer Credit Licence (FCA No. 933316). Fronted Ltd (Company No.12304059) is authorised and regulated by the Financial Conduct Authority under a Broker Licence (FCA No. 933317).
Fronted Loans Ltd and Fronted Ltd is a wholly owned subsidiary of Fronted Holding Ltd. We are part of the FCA regulatory sandbox - Cohort 6. The regulatory sandbox allows firms to test innovative offerings in a live environment. More information on the FCA's regulatory sandbox can be found here.
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