Housing Budget
You might find yourself wondering, “How much should I spend on rent?” Wonder no further, we have the answer for you! The Department of Housing and Urban Development (HUD), recommends that you spend no more than 30% of your income on your rent/mortgage.
So for example, in Illinois, the minimum wage will increase to $11 per hour (in January 2021). If you work 40 hours per week at the minimum wage, your monthly gross income, or the money you earn before federal and state income taxes are taken out of your check, will be around $1600 a month.
$1674 X .30 = $502
Multiplying your gross income by .30, or 30%, shows that you should not spend more than $502 a month on your rent.
You can’t find an apartment that fits within the 30% recommendation?
At Day2Day we realize that if you are working minimum wage, this guideline doesn’t really get you far considering the cost of rent in Illinois. Anything above 30% however puts you at risk for cost burden—in other words, you’ll have a hard time paying for other necessary expenses such as utilities, groceries, and transportation. Although the state plans to increase minimum wage gradually so that by 2025 minimum wage will reach $15 per hour, no one has time to wait that long. If rent within your budget is difficult to find with or without a roomate, check out our page on housing assistance in Illinois: Day2Day Housing Assistance.
Need help planning your housing budget ahead of time?
Try using the following tool to calculate your expenses based on your pay to help create a picture of your monthly budget:
Smart Asset: Household Budget Calculator
Smart About Money (SAM) also offers a course that helps you create a housing plan. It walks you through everything from planning how much rent you can afford, your credit score and eventual long term planning for purchasing your first home.
For more information on money and budgeting, check out our section on Money. If you are interested in finding a new career path to increase your income, check out our Work section.