Belleville Blog

How Much Can I Afford?

Without question the most important consideration when thinking about making a change in where you live is considering how much it will cost and how much you can realistically afford.

You can start by drawing up a budget specific to your needs and assets.  No two families live the same way and no two people budget the same way either.  Two families with identical incomes will not necessarily spend the same amount of money or choose the same accommodations.  Priorities as well as individual needs differ and you need to examine how much more you would be willing and able to pay for something new.

It's important that you are honest with yourself.  If you want something more expensive, it may put a strain on your budget and you may have to change your lifestyle to accommodate the extra.  An average family should not spend more than 25% to 30% of its gross income on housing.

For a home that carries a mortgage, this figure should include payments of principal, interest and property taxes.  For rental housing this figure should fully cover your rent.  And there are other expenses such as water, heating, electricity and insurance costs.  utilities and insurance usually cost 5 to 10% of a gross income.

Below is an example calculation that can help you work out your costs:

15% - 20% - Excellent to Good
26% to 30% - Acceptable
31% to 39% - Average
49% or more - Too Much