Living near the U.S. capital definitely has its perks. Washington, D.C. is one of America’s largest cities, which means plenty of job opportunities, things to do, and places to go. But landing a job that pays well may take a few years of experience. When looking for Washington, DC houses for sale you may think, how are people affording to live here? We have one simple answer for you, and that’s knowing how to budget.
Consider Your Income
First, to successfully budget you must have an understanding of at least your monthly income. While there are plenty of high-paying jobs in the D.C. area this doesn’t mean that those not making six figures aren’t able to afford living in the capital. Determining your monthly income may be difficult if you are not working a job that pays you salary, but to the best of your ability determine how much you are bringing in throughout the month.
Develop a Plan
After figuring out your income, you’ll then want to make yourself a plan for where this money is to be distributed during the month. A general rule is to set aside 50% of your income for your needs such as rent, utilities, and food, 30% of your income for your wants such as a gym membership and clothing, and 20% to your debts with the remaining money going towards your savings.
You may need to reconfigure these percentages based on your income and cost of living in the area you choose to live in. For example, those living in Washington, D.C. can expect to pay more in rent than those living in a less populated and developed area. Depending on your income, you may have to sacrifice some of your wants to pay for some of your needs.
Track Your Progress
As you begin this new journey into budgeting, you’ll want to track your progress as you go. You can create a spreadsheet to monitor your spending to determine if you are meeting your budgeting goals or spending too much money in some areas. There are plenty of budgeting spreadsheets available online if you are not sure where to start.
Throughout your budgeting process, you will most likely start to see trends on where you are spending the most money and perhaps where you can make some improvements to save yourself a few more dollars. Yes, I’m talking about that $4 or more cup of coffee you are buying every morning before work. By making your own cup of coffee at home, you can potentially save yourself hundreds of dollars throughout the weeks or months. Changes like this are how a majority of D.C. residents are able to afford living in the area.
Committing yourself to a budgeting plan and seeing it through can not only help you to live in the city of your dreams but also by helping you achieve much more financially. That exclusive destination trip you have been thinking about can potentially be in your budget after all.