We’ve talked quite a bit lately about the pros and cons of living alone and how to avoid roommate disasters if you choose to go the roommate route; but the bottom line when deciding whether or not to live alone is, can you afford to?
Here are a few things to consider before deciding if you can truly afford to live alone.
Crunch the Numbers
When looking at renting a place on your own, the first thing you will probably look at is what the monthly rent is as a dollar figure, but instead you should look at the rental amount as a percentage of your take-home pay.
$500 may seem like a reasonable rental rate for your community, and it may be, but if it is 50% of your monthly take home pay, it is not actually so affordable for your situation.
The general rule of thumb is that housing should take about 30-35% of your monthly budget. If you are an expert at living frugally otherwise, you may be able to stretch your housing percentage to 40%, but you will probably have to make sacrifices in other areas to cover your more expensive housing choice.
Feel it Out
After you’ve crunched the numbers and figured out what you can actually afford based on your monthly take-home pay, you should consider how much you are actually comfortable paying.
Just because the numbers work out to show that you can afford it doesn’t mean that you are comfortable paying the often higher price of living alone.
Maybe instead you’d like to live with a roommate for a while and free up more of your income for your savings goals. When deciding whether or not to live alone, you should also consider how much you will need to spend each month on other living expenses, like transportation and food and if you are comfortable with the amount you’ll have left for these things.
Remember Additional Costs
As you continue to consider different living situations, don’t forget about the additional costs like utilities. Some places may have lower rental prices, which seem attractive at first, but they require you to pay your own utilities: water, trash, electric, and gas.
Also consider if you will be able to afford things you might want, like internet and some form of TV service. Sometimes living with a roommate can be advantageous because you can split these utility and entertainment costs.
If you haven’t lived on your own before, don’t forget about the up-front costs of furnishings and other necessary home goods. Even if you go about furnishing your place on the cheap and with minimalism in mind, there are a few things you’ll still have to pay for up-front, like kitchen wares and at least a few larger furniture items.
Generally speaking, the total rental rate for a larger place will be higher, but once it’s split between roommates each person’s individual portion will be smaller than if they are living on their own, even in a smaller and overall cheaper location. In the end, you have to decide for yourself if you can truly afford to live alone and if you are comfortable with what it will cost you, including both the financial costs and the opportunity costs.
In your opinion, is living alone worth it?
Image via Flickr by emilysnuffer