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monthly apartment cost & monthly salary?

I'm a junior in college majoring in education and I'm starting to think about what I might want to do after college. However, because I'm still young and lack experience in managing personal finances. I'm good with managing my money and saving, but when it comes to investing in a home or an apartment or a car, etc, I'm not very familiar with the financial aspects involved. So obviously I'm looking to get some advice from someone with a little financial/investing experience. The first goal I have after I graduate college is to find a job. And I just did some research and the average annual salary for a HS teacher in my city is roughly $39,000 (tough income, I know, but it's for the love of the job). So I figure, in order to find the monthly salary I just divide that by 12 and I get $3,250 a month (on average). [$756 a week | $108 a day] Next I started searching for apartments, and though there were cheaper apartments, I found this REALLY cool 1 bedroom apartment for $1,400/month. Well because I'm young and inexperienced I'm thinking: "well great, I can afford that if I'm bringing in $3,250 a month!" but for some reason I know that might not be the case. I know I'm neglecting taxes and utilities and insurance and basic everyday living expenses, and probably some other hidden fees or fees I'm unaware of, but I just don't know how much those things cost (thankfully, I've never had to support myself financially). But now I'm interested and I feel stupid for not knowing. I guess what I really want to know is how much of your monthly salary should go towards monthly apartment costs? Thanks for the advice everyone!

Public Comments

1. A general rule of thumb is: rent= 1 week of salary. What ever your pay-deduct 25% for taxes and possible other costs off the top. Figure utilities- gas, electric, water, phone to be between $250 to $500 per month. Food- if you do not eat out every day- you could make do with $150.00 per month.
2. Most people recommend you make 3 times your monthly rent. A $1400 apartment would usually need an income of $4200 a month. Some places will rent to you if you make only 2-2.5 times the rent.
3. If you tie up 43% of your income in an apartment, you'll be living on noodles for a while, every time you need new tires or something else unexpected comes up. Try to find an apartment @ 25% or less. $1400 / $3250 = 43.07%.
4. That $1400 a month one bedroom apt. is out of your league. You can only use your net income for budgeting purposes... (simply because you can't pay the bill with your gross because it won't make it all into the bank account...) Besides the usual payroll taxes you may also have such variable deductions as in 401K contributions, health care premiums, etc. Take that $3250 and deduct about $1000 to be on the safe side. Now you are left with $2250 a month. $1400 for base rent - that leaves you with $850 Utilities, cable, phone, internet garbage - takes about another $400 now you have $450 and you haven't even made a car payment, bought food or gas for the car... What is affordable is using no more than 30% of your gross income towards rent or mortgage. In my opinion... make that 30% of your net income and you will be able to live a decent life style.
5. You might find this link useful to work out your taxes, there is a calculator on which you can input your earnings to calculate your tax. http://www.moneychimp.com/features/tax_brackets.htm I'm in the UK and here we get taxed at source (so our monthly salary already has the tax taken off) I presume from TV that in the US you have to fill in your own returns and pay in a lump sum. Other things you need to account for are:~ Insurance (medical, house etc) Utilities, Food, Travel. You may be best asking your parents or any friends that already have apartments to see what they pay. These costs will vary from area to area and depending on the size of your apartment etc. Online quotes are a good way to get an idea too.
6. 25% is on the saving, 25% is on the investment side etc or..for example ,stocks,bonds,las vegs jk....sumthing that u noe how to dealing with...and 50% should be on ur suposrt of living side...depend one what kind of apartment or house u plan to living in, what car u will drive.,a just like up there if u dont eat out u cansave more money to spend for other stuff....
7. I BEG you - get into the retirement savings game asap and invest as much as you can. Get a cheaper apartment, MUCH cheaper. AND GET A ROOMMATE. Save money to buy a home - 3 bdrm, and STILL KEEP A ROOMMATE. Invest $20 in a subscription to Money Magazine. It will be the best $20 you ever spent.
8. Hi, I'm a former financial consultant. I spent almost 2 years of my career focusing on people almost exactly like you. Still in college or having just finished and just starting out. You are not alone in your lack of knowledge regarding personal finance basics. I'm going to go into specifics here because your future situation is still inknown. You don't know how much you'll be making etc. I'm going to suggest you further your education, but regarding how to manage money and learning tips that will help you succeed financially far quicker and more substancially than the majority of other people. For example, could you imagine sharing a smaller appartment with a roommate or two for even just a year and spending only $700 a month. Well, in the numbers you gave us in the question, that would allow you to save $700 a month. That's $8,400 after a year, almost. More than most people have at such a young age for a down payment. Be frugal, be wise and learn as many personal finance basics as possible before you make any kind of decisions. Subscribing to money magazine, or even taking a course will be great for your financial education, but they cost money. It will be money well spent, I'm sure, but you're still money out of pocket. You can also get a lot of free information on the net through yahoo or google. We've compiled some helpful financial calculators in our blog as well as an ebook that you might find useful. Check it out below. I hope this has been helpful for you. Take some initiative and do some very important learning and learn how to manage money as best you can. Start with a comprehensive budget spreadsheet. Best of luck