To (barely) afford $1000/month rent, you just need 32k/yr aka $16/hr??

[JEDI]

You're suppose to only spend 50% of take home pay on rent.

Annual salary= $1000/75% (20% fed tax,5% state) x 12 x 2 = 32k/yr

$1000/month for rent is very doable in major cities not named San Fransisco.

So if a person can survive on $16/hr, what am I missing?
(A few major cities have $15/hr min.)

 

[Red Squirrel]

You're forgetting taxes and other deductions. Then there's bills like utilities, insurance etc and other costs like groceries, fuel for car etc. Combined that is going to often be more than rent/mortgage. If you make 32k/year you're taking home about 15k/year. 1000k/mo rent is going to be 12k/year. So you would have 3 left.

 

[BoomerD]

Maybe in some places, but I live in a fairly rural part of western Washington...and a decent (not fancy) 2 bedroom apartment runs well over $1000/month. You'd be hard pressed to find a one bedroom place that didn't come furnished with its own cockroaches for $1000.

 

[Red Squirrel]

If the cockroaches are big and plenty enough, you can save on groceries.

 

[jackstar7]

The actual fraction is 1/3 of net earnings should be for rent.

Adjust your calculations accordingly.

 

[BD231]

 

[JEDI]

You're forgetting taxes and other deductions. Then there's bills like utilities, insurance etc and other costs like groceries, fuel for car etc. Combined that is going to often be more than rent/mortgage. If you make 32k/year you're taking home about 15k/year. 1000k/mo rent is going to be 12k/year. So you would have 3 left.

oh.. so 50% of your after-tax income on fixed costs such as rent, utilities AND transportation.

The actual fraction is 1/3 of net earnings should be for rent.

Adjust your calculations accordingly.

so basically 1/3 of after tax $ on just rent?

 

[zerocool84]

Lol a 1k apartment with 16/hr sure if you have literally no other bills. You do know that taxes get taken out of your income too for many states as well right?

 

[Darwin333]

The important question is, will you still be able to afford mayo.

 

[JEDI]

Lol a 1k apartment with 16/hr sure if you have literally no other bills. You do know that taxes get taken out of your income too for many states as well right?

psst.. reread OP.
it takes into account 20% fed tax,5% state

 

[Red Squirrel]

Oh I missed that part, so 32k AFTER pay cheque deductions? That would be doable but tight. I make roughly 42k after deductions (just did a quick estimate based on my average take home pay so it could be off) and I pay $1,200/mo for my mortgage. It's tight though, after all the bills and stuff. I have a few hundred left over. Hydro and municipal taxes are the big killers though, for an apartment you don't have to worry about municipal taxes (I think? Never rented before).

 

[BoomerD]

$16/hr works out to about $25,000/year after deducting 25% for taxes.

$1000/mo. MIGHT be doable on that...but it would be hella fucking tight. Not much leftover for utilities, car payment, oh...and food.

 

[Chaotic42]

I live in a suburb of St. Louis and I have a pretty nice two bedroom apartment for $1100, so I don't know how common $1000 rent would be in cities people actually want to live in. It's totally possible to live off of $32,000 per year if you're single with no kids, but I can't imagine doing it as a single parent. Car payments, insurance, food, bills, etc. will eat into that spare $1000 pretty quickly though.

 

[JEDI]

Oh I missed that part, so 32k AFTER pay cheque deductions? That would be doable but tight. I make roughly 42k after deductions (just did a quick estimate based on my average take home pay so it could be off) and I pay $1,200/mo for my mortgage. It's tight though, after all the bills and stuff. I have a few hundred left over. Hydro and municipal taxes are the big killers though, for an apartment you don't have to worry about municipal taxes (I think? Never rented before).

no, 32k before taxes.
taxes = 25% (20% fed tax,5% state)
so about $25k after tax.

$16/hr works out to about $25,000/year after deducting 25% for taxes.

$1000/mo. MIGHT be doable on that...but it would be hella fucking tight. Not much leftover for utilities, car payment, oh...and food.

yup, tight.
I didn't say that person's going to thrive on $16/hr.
I said survive. (updated title to be clearer)

I was just shocked on how little a person needs to make to scape by on $1000/month rent.

 

[skull]

Why scrape by with an overpriced rental. I bought my 2 bedroom house with taxes and insurance its $400/month. Who needs a car payment when you can buy a running car out right at the public auctions for a normal monthly payment. 30k/year and single its like I'm rich.

 

[dave_the_nerd]

"Currently, it is estimated that the average monthly rent in the United States is closer to $1,161 for a two-bedroom apartment."

"Seasonally adjusted median weekly earnings were $863 in the second quarter of 2017..."

Meanwhile, "Of the $22,030 healthcare cost for a family of four..."

So that's a thing.

 

[Thebobo]

Why scrape by with an overpriced rental. I bought my 2 bedroom house with taxes and insurance its $400/month. Who needs a car payment when you can buy a running car out right at the public auctions for a normal monthly payment. 30k/year and single its like I'm rich.

When and where?

 

[highland145]

Meanwhile, "Of the $22,030 healthcare cost for a family of four..."

So that's a thing.

2013...

 

[dave_the_nerd]

2013...

And? Pretty sure those prices didn't go down while I wasn't looking.

 

[highland145]

And? Pretty sure those prices didn't go down while I wasn't looking.

Absolutely not and my point.

 

[dave_the_nerd]

Anyway, you're not sitting pretty on a household income of $32k/year.

But you can get by alright on double that, if you don't save for retirement.

 

[dave_the_nerd]

When and where?

Something like this probably?

You can still find cheap/old/rundown housing in places where nobody wants to live. But nobody wants to live there because the communities have little in the way of ongoing economic concerns. So you end up having just as much trouble making ends meet, on the average.

 

[Thebobo]

Something like this probably?

You can still find cheap/old/rundown housing in places where nobody wants to live. But nobody wants to live there because the communities have little in the way of ongoing economic concerns. So you end up having just as much trouble making ends meet, on the average.

Get a liquor license and I'm ready to go! Interesting you mention that when I retire I am actually looking at buying in cheaper communities as it will be a lot cheaper than most rentals. I don't need to worry about generating income anymore. As long as it's clean and functional.

 

[dave_the_nerd]

Get a liquor license and I'm ready to go! Interesting you mention that when I retire I am actually looking at buying in cheaper communities as it will be a lot cheaper than most rentals. I don't need to worry about generating income anymore. As long as it's clean and functional.

That is a very valid strategy. My parents (60s) and grandparents (80s) both have gone that route. It's a great way to stretch those retirement dollars. Especially if you retire early and want to wait to file for SSI.

The problem then is access to services, though. My grandparents both have chronic health problems, and driving an hour to the Dr. isn't so easy anymore. Some kind of semi-independent community is probably in their near future, and my grandmother... isn't so good at planning these things anymore. They've kept it up a lot longer than I would have thought possible. My dad's planning a similar move - eventually sell the house and move back into town.

It's all well and good at 55 or 60 to look out onto your acreage and say, "dammit, this is my land, God's country, and here I will die." It's another thing entirely to be 85 years old, looking at your wife of 60 years, and know that if you can't get her to an ER in time, she'll be... ummm... "Let's get an apartment in town, honey. I don't like yard work anymore."

 

[Thebobo]

That is a very valid strategy. My parents (60s) and grandparents (80s) both have gone that route. It's a great way to stretch those retirement dollars. Especially if you retire early and want to wait to file for SSI.

The problem then is access to services, though. My grandparents both have chronic health problems, and driving an hour to the Dr. isn't so easy anymore. Some kind of semi-independent community is probably in their near future, and my grandmother... isn't so good at planning these things anymore. They've kept it up a lot longer than I would have thought possible. My dad's planning a similar move - eventually sell the house and move back into town.

It's all well and good at 55 or 60 to look out onto your acreage and say, "dammit, this is my land, God's country, and here I will die." It's another thing entirely to be 85 years old, looking at your wife of 60 years, and know that if you can't get her to an ER in time, she'll be... ummm... "Let's get an apartment in town, honey. I don't like yard work anymore."

Definitely I have some preexisting conditions and health care is one of my priorities. Where I am considering has a large medical center. The area was hit hard years ago when a large company closed.