How much should I spend on housing as % of my salary.

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frenzal
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How much should I spend on housing as % of my salary.

Post by frenzal » Fri, 22 Aug 2008 1:45 pm

I had gotten into my head that I will only spend a max of 1.2k, but perhaps this is too low given my salary offer? I have done a search and most people posting earn very high incomes, so their percentages are obviously different to someone with a medium income, such as myself.

My pay is $4250/month + $8000 bonus at the end of the year. Given that the bonus will only be paid out at the end of the year, how many % of the $4250 would you recommend setting aside for rent given that:

I like to drink every few weekends
I want to travel o/seas a few times a year (within cheap Asian countries :p )
I like cheap hawker meals more than 5-star western cuisine
I won't drive
I want to save up some money

Thanks guys: is my $1,200/month estimate too high or too low, based on my salary? I'd like to think I could afford a 1BR place or a studio at 1.6k, but am afraid that I will be overspending on accommodation

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QRM
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Post by QRM » Fri, 22 Aug 2008 2:15 pm

Its a funny question as only you know how you want to live.

I know people who would live in their car so that they can spend all the cash on beer, while others willingly sacrifice all social activity and live in a squat to put aside cash for a rainy day.

Some feel they work hard and live for the moment and deserve the best, they splurge on a penthouse and have no savings.

I met a guy in Langkawi who lived in a tin roof hut but had a brand new Mercedes SL outside.

Different strokes for different folks, most "normal" people in the UK put aside a third of their salary for rent or mortgages.

If the bonus is guaranteed and not performance based then that's part of your salary

frenzal
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Post by frenzal » Fri, 22 Aug 2008 2:59 pm

Hmm that's very true. I will also be getting a performance review every year with a guaranteed pay increase, so perhaps I should look at renting for two years, as it'd be a hassle moving. This justifies a higher rental price in the first year, in my opinion.

33% does seem to be the norm from a google search though. So looks like I can afford to spend $1.5k on rent and not have to live an uncomfortable lifestyle by skimping on necessities.

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sundaymorningstaple
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Post by sundaymorningstaple » Fri, 22 Aug 2008 3:41 pm

Rather than looking at percentages, you would do well to look at realities. If you want to live in your own place be prepared to spend a MINIMUM of 1500/mo unless you live way, way out in Chua Cho Kang in an 3 rooms HDB flat (unless you get darn lucky). Otherwise you will have to look at what you will realistically will have to pay and then decide if the whole offer is affordable or not. If you company doesn't want to budge then you will have to rethink the whole thing.

Employers know that 2500 is doable especially if you are single they know you can room with two or three to a Flat/Condo. That's life here.....
SOME PEOPLE TRY TO TURN BACK THEIR ODOMETERS. NOT ME. I WANT PEOPLE TO KNOW WHY I LOOK THIS WAY. I'VE TRAVELED A LONG WAY, AND SOME OF THE ROADS WEREN'T PAVED. ~ Will Rogers

frenzal
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Post by frenzal » Fri, 22 Aug 2008 3:52 pm

sundaymorningstaple wrote:Rather than looking at percentages, you would do well to look at realities. If you want to live in your own place be prepared to spend a MINIMUM of 1500/mo unless you live way, way out in Chua Cho Kang in an 3 rooms HDB flat (unless you get darn lucky). Otherwise you will have to look at what you will realistically will have to pay and then decide if the whole offer is affordable or not. If you company doesn't want to budge then you will have to rethink the whole thing.

Employers know that 2500 is doable especially if you are single they know you can room with two or three to a Flat/Condo. That's life here.....
I think the offer is very attractive given my age and that I'm only recently out of uni, but having a look on sites it does seem like I can find a place for 1500/month that would be much nicer than the places I find for 1000/month. A master room in a condo would be great too. I have seen studio apartments occasionally for $1.8k, and according to some analyst's articles, singaporean rental prices should drop in 09 when i come over.

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