Why Budgeting Is Important | HotPads

Why Budgeting Is Important

Have you eve wondered how some stars can make millions of dollars and claim bankruptcy just 2 years later? It probably had something to do with a lack of budgeting. Before you search for a place, you should first find out how much you can spend. Once you make your budget you might realize that you don't have as much money to spend on rent as you thought you did.

Rent is only one of the costs that you are going to have to incur on a monthly basis. To decide how much you can spend on rent you should find out how much you spend on the other things in your life. Determine the monthly cost for the following items:

  • Food. You have to eat. (some more than others)
  • Utilities. Rent at some places might not include utilities like water or electricity. You should ask the management how much average monthly utilities run. If they don't know ask some of your potential neighbors.
  • Transportation. Do you drive to work/school? Do you take public transportation? Either way it is going to come out of your monthly budget.
  • Insurance. How much is it going to cost to insure you place in case of a fire, flood, hurricane, stampede, etc
  • Clothes. Are you a fashionista? Put it in the budget.
  • Party Allowance. How much do you spend in an average month on beer, music, movies and overall fun times? Budget it.
  • Savings. You should save a little every month, because you never know when your house will flood, or you will need that emergency face-lift. Every little bit helps.

One you have taken into account all of these and whatever other monthly costs you may have you can start determining how much you have left to use on rent every month.
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