Question

If a place you like is renting for $800, and you had one other renter with whom you split the rent expense, how much does your GROSS INCOME need to be?

a.
$800
b.
$700
c.
$600
d.
$1,200
e.
$400

Answer 1

the correct answer is e.$400

Answer 2

How much should I spend on rent and utilities?

We calculate your monthly rent at 25% of your monthly net income (after monthly debt). This allows you to have enough cash left for other expenses and savings. Utilities are in general 2.5% of your monthly net income, and so in this case, you should expect to spend $0 or more per month on utilities.

Explanation: