Find out how your rent compares and then save on it!

As you may know from reading my articles on home-buying, I’m not a huge fan of buying real estate.  Instead, I prefer (and counsel others) to rent a reasonable home and use excess cash to max out my retirement accounts and other investments.  For most people, housing costs are usually the most expensive item on the monthly set of bills.  It really pays to scrutinize big bills because even small percentage savings equal high dollar values.

Find out what people in your neighborhood are paying for rent

When looking at rental rates when shopping for a new place to live or contemplating your current lease, use Rent-o-Meter to find out what a reasonable rent is in your area.  I just used this tool for the condo I’m renting and got a lot of nearby comparisons.  (My rent’s reasonable, but not dirt cheap 😦 )

Slash your rental costs

Smart Money published a very good article with 5 ways to cut your rental expenses (read it!)  The most important thing you can do is be very picky when shopping for a new rental.  Look closely at many units and pay attention to prices at each one.  The best way to get a good deal is knowing how much your alternatives cost.  Set yourself a rough budget to stay inside of.

I recommend trying to keep your rental costs to a maximum of 10 – 20% of your gross salary.  Keep to the low side of the percentage if you’re on the high end of the income spectrum; use the higher side if your income is low.  So, if you make $30,000 a year, you might have to spend up to 20%, or $500/month.  If you make a heftier salary like $80,000, you should shoot for a max around 10%, which would about $1,300.  Obviously these amounts will differ depending on how expensive the city is that you live in.  Rural renters and those in the Midwest should spend much less than those in Manhattan or other major coastal cities.

Don’t forget to add or subtract amounts for utilities like water/sewer/gas that might be included in some rentals (typically apartments or condos) and not others (like houses.)  Also factor in any other savings like splitting cable costs with other tenants.

Get a roommate

If you’re living by yourself and having trouble staying within the guidelines I set above (or just want to have more money to spend/save), get a roommate.  Having a roommate is one of the easiest ways to live in a far nicer place than you could if you were by yourself.  I find that singles and studios are way more expensive than splitting the cost of a two-bedroom.  You’ll save a lot on utilities too by splitting internet, cable and heating costs.  Plus, it can be less lonely and more fun to have a friend just across the living room.  (Although ladies and metrosexual males might want to spring for a place with two bathrooms if possible.)

The savings from adding a roommate seem to decrease after you have 2 people, but adding a third might save a bit more per person as well.  (Even if you know your roommate well, asking your landlord to put you each on separate leases will make you less responsible if your roommate has to move out unexpectedly or gets behind on the rent.)

Ask your landlord for a discount

After doing your homework to see what rentals cost in your area, ask your landlord to reduce your rent.  Stress that ‘times are tough’ and the economy is down.  Emphasize how you’ve been a great tenant (assuming you have been) and how the rent’s been on time, the place is in fine shape, and the neighbors have never complained.  The worst your landlord can say is ‘no’, so it’s definitely worth a shot!  Even reducing your rent 5 – 10% can save you hundreds of dollars over the course of a year.

Summary

Rent is a big expense.  All big expenses (especially on-going ones) need careful evaluation.  Research rents in your area and search for a good deal.  Use a rough guide of 10 – 20% of your income as an absolute maximum for spending on rent.  Get a roommate to live larger on a smaller budget.  Negotiate an existing lease with your landlord to reduce your monthly rent payments.

Top 100 best values in public colleges

Kiplinger’s has released its top 100 best values in public colleges.  (My alma mater, the University of Washington located in Seattle), was ranked #7 for in-state students!)

You can also filter your search by state(s).

They have a similar list for best values in PRIVATE colleges.

‘Tis the season to give! Words of Ward Philanthrophy for 2013

I’m issuing my annual call for folks to help out those that are worse off than themselves this holiday season through charity.

For those with short attention spans, choose one of the top 3 charities over at givewell.org, the best charity recommendation site I know of, here.  (I recommend & have been giving to Against Malaria Foundation as the best way to save lives, especially those of children.  For poverty alleviation, Give Directly is the best choice.)

Why (and where) you should give

As comparatively wealthy members of the world, I believe folks like us have a moral duty to improve the lot of others in the world.  Even if you don’t agree with me on that, consider that helping others has been shown to do wonders for the person doing the helping.  Make yourself feel good by donating to charity!

I strongly recommend giving to causes that help those living in extreme poverty outside the US and other ‘first world’ countries.  This is because dollars go the furthest when helping those that have next to nothing.

Think about it this way:

You could save a life for about $2,000 (per Givewell.org) by purchasing mosquito nets to protect children in Africa, or you could spend $100,000 – $200,000 on cancer research to extend an American life by 3 – 6 months.  As thinking human being, I know the right thing to do is to save as many lives with my limited resources as I can, even if they are ones across the globe whose names I will never know, and whose pictures I will never see.

I believe that every human’s happiness is just as important as another’s, so I give internationally through charities recommended by Givewell to maximize the good that my dollars do in the world.

I might give token amounts to causes that are emotionally close to me or my friends & family (cancer, Alzheimer’s, a Boy’s & Girl’s recreational club in my neighborhood), but I know that I have a responsibility to donate any significant amount in the most effective way possible, and that the human race as a whole will be better for it.

Give smart!

Something like less than 25% of charities measured are actually shown to produce social benefits, so it’s important to choose carefully when giving.  Givewell.org is my favorite charity selector, and has been for years.  They evaluate charities using rigorous standards and provide simple, easy-to-follow recommendations, so that you can be confident that your dollars will go a long way.

Take action

Every year several members of my family and I reduce our holiday stress & increase our feelings of well-being by forgoing presents.  Instead, we commit the same amount of money we would have spent on gifts to worthy charitable causes.  I highly recommend you try this approach (or a hybrid version such as half gifts/half charity) with your own friends and family (excluding those under the age of 18 or so, of course :).)

This yearly activity has several benefits including 1) not having to find & shop for gifts for others, 2) not having to think up gift ideas for things you want others to buy you, 3) making you feel good about helping people, and 4) leaving you no worse off financially than if you bought presents instead.

So, pick a cause and do some good this season!  Click here to pick from a great list of worthy charities, or save a life and donate to Givewell’s top choice, and my personal choice, Against Malaria Foundation.

(And if you weren’t convinced, here’s more good press on Givewell from freakonomics.com.  You don’t just have to take my word for it!)

Happy holidays and happy giving!

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