Now that you have a stable job, you’re probably thinking that you can afford to have a place of your own. There are many options out there, and all you need to do is find the best place to start your life away from the things you used to know. But, before you even start looking for an apartment or condominium, you have to ask yourself this very important question: How much rent can I afford? It would save you a lot of time if you know at the outset what neighborhoods are within your means. Here are a few reliable tips for you. We’ve put together advice from a variety of financial experts to help usher you into the next chapter of your life.

## 10. Factor in your current income

This (and the next few items on the list) would require some calculation. But if you are managing your own finances, you had better come into the realization that you’ll be doing monthly arithmetic if you want to stay out of financial trouble. Anyway, the first thing that you have to consider is your current income. How much is your total monthly income including additional sources such as part time jobs, commissions, tax credits, benefits, etc? Compute the income before taxes and jot it down. If it comes down to it, then you may need to look into how to handle your withholding allowances with your employer to ensure you are obtaining as much financial benefit as possible. To compute the total monthly income before taxes, do the arithmetic for your annual total gross income and then divide it by 12.

## 9. Factor in all expenses plus contingencies

For the next set of calculations, you have to factor in all your monthly expenses. You really can’t walk around just having a vague idea of how much you spend on this and that. If you keep receipts of your groceries, clothes, medications, purchases, car payments, and other regular expenses, gather them up. And then sit down with a calculator and figure out how much you spend for each category. Jot down the specific expenses that you incur per month. This is the best way to figure out whether how much you can still pay for rent.

## 8. Miscellaneous Expenses

When listing down expenses, people often forget to include miscellaneous expenses that are usually not allotted monthly such as traveling and vacation expenses. If you have forgotten to include the everyday transportation expenses to and from work in your list of expense then make sure you add the total monthly figure to your already lengthy list. And don’t forget the taxi that you take when you go out or if you’re too inebriated to take the subway or the bus. If you drive a car to work better put gas expense to your list as well. And under miscellaneous expenses, you’d have to include how much you typically spend on night outs with friends, dates, movies and the theater, and the occasional luxury stop at the spa. Credit card payments belong here, too. If you are a sports enthusiast, make sure you jot down expenses on equipment and related activities in the pursuit of your favorite sport. And if you make regular cash donations they have to be included under miscellany as well.

## 7. What can you live without?

By now you probably have a very good idea how much you really earn, how much you have been spending, and whether you still have the means to pay rent. If your budget looks tighter than you thought it would be, better make a few subtractions on the expenses list. If you really want to have a place of your own you have to consider maybe doing you own laundry rather than paying for a service. Or maybe you ought to drink less and let the air-conditioning and cable go.

## 6. Location (x3)

If you are on a bit of a panic mode after realizing that you’re spending more than you should and have no hope of renting in a nice neighborhood, think of it this way. If you can find a nice and costly neighborhood near your workplace and social haunts, then can just walk to work, see your friends within the area, and let go of the car, gas, and taxi expenses which you can just add to your rent budget.

## 5. Convincing a landlord that you can pay the rent

Since you are just starting out on your new life and the landlord will definitely get wind of this during your interview, you have to somehow convince him or her that you will be able to pay the rent. You have to convince the landlord that you intend to keep your job and that you expect a steady income in the future. We’re saying this because while you are figuring out how much you can afford to pay for an apartment or condominium, the landlord is making the same assessment.

## 4. Gross or Net?

When it comes to calculating rent affordability, there is an ongoing argument: gross income vs. net income? Gross income is the total money that you earn before taxes. Most people don’t see the point in using gross income. They prefer to use net income instead, which is a certain percentage of the gross. It is really up to you which makes more sense, but for some it is easy to use the monthly net income figure and divide it by three. You can confidently start with that estimate.

## 3. Divide by 40

On the other hand, the United States Housing Department recommends that you base your decision on this: You must be making 40 times more in one year than your monthly rent. The compute, all you have to do is divide your annual income by 40 and you have the answer to your question.

## 2. Use the “Rule of 36″

Another recommendation from housing specialists is called the Rule of 36. No worries, you don’t need advanced calculus for this. For this computation, use your total annual income as the numerator and divide it by 36 as the denominator. That’s it. You also get the rental cost that you can afford based on your actual earnings.

## 1. Stay within 30% of your income

Actually, if you analyze the math (we’ve done it for you already), it can be simplified to this: The rent that you can afford is within 30% of your annual income. Since it is easier to multiply than divide, just get the product of your annual income and multiply it by 0.30. Now set that against the list of income and expenses that you have already prepared and see where you are and what you need to do to start the next chapter of your adult life.

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