HomeFinancial ExperiencesHow Much of Your Income Should You Spend On Rent?

How Much of Your Income Should You Spend On Rent?

The monthly monster, the necessary nuisance, the compulsory comfort — that’s rent for you. Dealing with electricity, natural gas, and water on top of the monthly lease can take a hard hit on your salary. This is why it’s important to know how much of your income you should spend on rent. 

In this guide, we’ve detailed two of the most popular budget methods along with a few tips on how to reign in your income so all your bills are paid on time.

The 30% Rule — Don’t Spread Yourself Too Thin

In the ideal rent-to-income ratio calculator, the 30% rule basically implies that your monthly lease should be less than or equal to only 30% of your salary. The rest is put towards utility bills, network services, luxury spending, and savings account.

How Does It Work?

To calculate 30% of your income, first look at the gross monthly income written on your check. This is your net income before taxes, payroll deductions, and benefits. Take out 30% of your gross pay, this is the rent you can afford. If you spend more than this amount currently, you may want to downsize on space or upgrade your income routes to regulate your housing expenses.

Accounting For Your Amenities

With the money left, budget for all other bills including vacations, medical emergencies, takeaways, car washes, and maintenance checks. If you take out more than 30% of your income to spend on rent but cannot afford to move to a smaller space right now, cut down on a few luxuries until you’re on the right track.

In Debt? No Worries

If you’ve credit card debt stacking or student loans knocking on your door every month, make that your priority. Because the sooner you pay them off, the faster you can improve your quality of living. Set aside no more than 20% of your gross pay for rent and pay off the debt with the remaining 10% to 15%.

The 50/30/20 Rule — Spend and Save Easily

Although the 30% rule is perfect for calculating the ideal rent according to your income, it presents a vague description of how to spend your remaining cash which makes you more likely to splurge than save. This is where the 50/30/20 rule comes in. Let’s dig in!

How Does It Work?

As a rule of thumb, 50% of your net income is used to pay the rent, utility bills, and groceries. 30% of your salary goes towards luxuries like internet, cable, vacations, and dine-outs. The remaining 20% of your check is put towards a savings account and this pays for unexpected repairs, accidents, and other liabilities.

Got a Promotion? Here’s What to Do

If your income is raised a few points, congratulations! However permanent this may be, it’s not time to raise your budget for essential purchases — let alone, the non-essential items. Instead, take the extra percentage of money and keep it in your savings account. Or better yet, invest in stocks, property, or gold for a steady stream of income. 

How to Regulate Your Income to Pay Rent?

With inflation on the rise, most of us are spending more than we are bringing in. This makes it hard to regulate your income, pay rent and still be able to afford groceries that month. Fortunately, there are quick and easy ways you can get a hold of your salary:


The easiest way to cash in, take out what you don’t need. As Marie Kondo, the queen of decluttering says, “Keep only what brings you joy.” We all have stuff we hoard because it “might come in handy” or will fit “after losing a couple of pounds”. Sort that out and sell it on Poshmark, thrift shops, or yard sales.

Hire Help

The most common way to pinch your pennies, make room for a flatmate and split the bills with them in half. Instead of negotiating a certain amount to pay, set aside a percentage. For instance, if you’ll pay 15% of your income on rent then they will too. Besides being a fair deal, this also ensures no extra burden falls on the other person if they are on a lower salary.

Work Part-Time

If all else fails, apply for easy jobs you can work in your free time. Hone in on your extra skillsets and start tuitions or if you’re handy with tools, refurbish furniture or fix up instruments. You could also try pet sitting.

Frequently Asked Questions

What expenses will I be responsible for every month in an apartment?

Generally speaking, you’ll be responsible for your utility bills (water, gas, electricity), cable, cell or internet, and rent. You may also be required to pay for garbage pickups, cleaning services, as well as fees including renters insurance and parking. The first month will also have upfront costs such as the security deposit, installation fees, etc.

Is it possible to cut down on utilities?

Yes, it is possible to cut down a small percentage of your utility bills. Use rechargeable lights instead of harsh LEDs, turn the taps off when you’re soaping up the dishes, and do not keep power outlets on when not in use.

Is renter’s insurance worth the expense?

Absolutely. A renter’s insurance policy ensures your belongings and your space are accounted for in case there’s a natural disaster, a break-in, or water and electric damage. They aren’t that expensive either, most cost $10 a month maximum — depending upon the size of your home, of course.

A Short Summary

Spending 30% of your monthly income on rent is perfectly doable, all you have to do is keep a check on your cost of living and reduce debt as much as possible. Save for rainy days and always budget beforehand.


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