I Spend More Than 50% of My Money on Rent

Friend of Cinch, Jackie Lam, is sharing how these two sisters are making it work:

If you toss a rock in the direction of the slew of personal finance literature out there, there’s a pretty good chance you’ll land on the 50/30/20 budget. That’s where 50% of your inflow of cash should go toward essentials like what you’re spending on rent, bills, and debt repayment, 30% goes toward your emergency fund and savings goals, and the remaining 20% goes toward whatever you please.

The thing is that whoever came up with this budget is probably part of an elite few who never considered selling a kidney to make their rent, or was lured into a payday loan.

In other words, they just don’t freakin’ get it.

For 26-year-old Amber, who shares a three-bedroom-apartment in Brooklyn with her twin sister, Dani, her share of the rent is $1,200, plus $150 for utilities and internet, which is more than half of her monthly take-home pay (after taxes) of $2,600. And if you’re a fellow Brooklynite, where the median rent for an entry-level apartment is $2,481, how much you’re spending on rent could result in a “crytime” sesh.

In addition to full-time office jobs, Amber and her twin sister also hustle nights and weekends as bloggers, aspiring authors, AND personal trainers. “It’s really more like working 1 ½ jobs,” she says. “And we splurged for a place with such high rent because it’s easy to commute to work, plus it’s modern and beautiful enough for the purpose of blogging,” she explains.

Here’s how Amber and Dani are making it work:

Optimize your space. Because Amber and her twin sister pay an arm and a leg for their place, they are making the most out of it. As they’re also licensed personal trainers, their home doubles as both a part-time office space and fitness room, so they don’t have to fork over money for expensive coworking space and gym memberships. They also don’t really go out too much, spending the majority of their “spare” time moonlighting and playing with their cats, they joke.

Spend on what you value. For Amber and Dani, it’s a matter of spending money on what they value most and skipping out on the rest. As they’re both hardcore vegans, Amber and Dani fork over some cash on quality food at Whole Foods, because eating well on a vegan diet is important to them. “Since we’re vegan, we find that it’s easiest to cook for ourselves in the city,” says Amber. And while they spend money on premium internet for their blogging business, they don’t have cable, since they don’t really watch much TV anyway. And the few shows they enjoy they catch on YouTube.

Go for the “neutral-spending” tactic. In other words, try to find ways for some of your expenses to be covered. For Amber and Dani, their office job pays for their Metro passes, which saves them each $120 a month. Other ways you can go “spending neutral” on expenses could be using referral codes for ride shares (like Lyft and Uber) and food delivery services, or using  something like Karma Go, which gives you free data whenever you let others tap into your internet.

Keep your eyes on the prize. Although Amber and Dani spend a butt ton on rent, Amber is still able to steadily repay her student debt, which is $350 a month. The twins also share one joint checking account and two joint savings accounts. They both auto-save $250 each month, which goes into respective IRA retirement accounts. One of their savings accounts is used for short-term savings goals, like a major trip this spring.

While the Gods of Rent and lack of affordable housing may get you down, you can figure out your own tactics for getting by and then some. While you don’t have to live like you’re a broke vagabond, like anything else, there are some trade-offs involved. Knowing what makes you tick will help you figure out where you’ll get the most bang for your buck.

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