I am settling nicely into my new apartment in New Orleans. The furnishing and decorative details are slowly coming together while I am focused on reaching my debt repayment and savings goals for this year. I actively work to live beneath my means and spend much less then I earn, however there are times when this idea is easier said then done. I am planning to increase my savings goals substantially in 2014 and perhaps even challenge myself to live on half of my income. This has me reevaluating my sources of spending.
I think finding NOLA apartment was a stroke of good luck as it was the only apartment within the budget I set and also in a very nice area of the city. Yet with my added savings goals in 2014, I wanted to see if I am truly living below my means with the rent I am shelling out each month.
Average Housing Costs:
According to a 2006 survey performed by the US Census Bureau as well as a “How To” guide on by the Wall Street Journal, suggested housing cost should not exceed 28% of your monthly income to allow for other variable spending. According to both sources this percentage is consistent for renters and homeowners alike. If I want to live on less than the average then my monthly rent should be well below this 28% number.
Living Below My Means:
My rent at NOLA apartment is 19.6% of my net monthly income. I’m satisfied with this as it is slightly over 2/3 of the “rule of thumb” percentage suggested. In addition to rent, the utility costs in NOLA apartment are low as the apartment is small with only 800 sq ft.
I know that housing costs and other costs of living vary by city and region and I’m thankful that New Orleans rents are fairly reasonable for a major metropolitan.