how much should I pay for rent

Budget 101: How Much Should I Pay for Rent?

Budgeting for your living arrangements is very important and you should never just wing it. Here is our beginner’s guide to help you determine how much you should pay for rent.

Know your finances

The most important, and probably the most daunting, step in apartment hunting is figuring out how much you can actually afford to spend on rent. But let’s be honest — it’s always best to be safe when it comes to making monetary promises.

You should always give yourself a buffer when calculating your expenses and if you don’t think that you can afford to spend a third of your income on rent, don’t do it. It’s better to spend less on rent and have a rainy day fund, than overspend on rent and be strapped for cash and stressed each month.


How much should I pay for rent?

There’s no one-size-fits-all when it comes to how much you should budget for your rent. Depending on your income, lifestyle and financial choices, your rent budget can vary. To determine how much to budget for rent, you want to become familiar with different budgeting techniques and see which tactic is best for you.

Here are four tactics to consider that will help you calculate how much to budget for rent and stay within your financial means.

30 percent rule

The 30 percent rule states you shouldn’t spend more than 30 percent of your income on rent. Using this rule, you can quickly calculate how much you can afford in rent per month.

For example, if you make $50,000 per year, you can spend $15,000 annually on rent or $1,250 per month. If you’re paying more than that per month, you’re likely living outside a safe budget.

50-20-30 rule

The idea behind this rule is you budget 50 percent of your income after taxes to rent and other essentials, such as insurance and utilities, 30 percent of your income to wants and 20 percent to savings.

Envelope system

The envelope system of budgeting is a little more hands-on but is great for people who want to ensure they aren’t spending too much each month. With this budgeting approach, you allot a certain amount of money toward all your expenses, get cash and put it in envelopes.

Once you’ve used the allotted amount for the month, you can’t spend anymore and must wait until next month.

Zero-based budget

With this system, you take your monthly income and put every dollar toward something until there’s nothing left. This doesn’t mean you spend money on unnecessary purchases. Instead, it means setting money aside for things like rent, utilities, insurance, groceries, savings, retirement, etc., until there’s nothing left. This can help you save money and ensure you aren’t overspending.

writing down expenses

Write down all of your expenses

When you’re budgeting for an apartment, you need to factor in more than just the monthly cost of the rent. Don’t forget that part of renting includes expenses like:

  • Rent
  • Security and/or pet deposit fees
  • Monthly HOA or rental fees
  • Utilities (gas, water, electric, sewage, garbage)
  • Assessment fees

You’ll want to figure out how much this will cost and include that in your monthly budget. That way, you won’t be caught off guard when you owe, for example, a paint assessment fee for the rental property.

Use a budgeting tool or app

You may know your finances in your head, but visualizing your finances digitally or on a physical piece of paper can help you stay organized and determine how much you should pay for rent.

Websites like are fabulous for renters because they allow you to sync your bank accounts, credit lines and investments to one easy-to-understand budgeting tool. is considered very safe and it’s quickly growing in popularity. After you’ve added your accounts to the site, you can set a monthly budget for everything from groceries to renters’ insurance to a vacation fund.

Play around with your numbers for a while if you aren’t used to budgeting. Figure out your monthly income and weigh that against your monthly expenses. After you’ve configured a budget that you can live with, you’ll know exactly how much you can afford to spend on rent.

Stick to your budget

Calculating a budget is useless if you don’t stick to it. Don’t look at apartments that you know are out of your price range, because you’re bound to fall in love with them. You should also consider how various neighborhoods will affect your ability to pay rent. Maybe you can afford a sweet pad in a far-away suburb, but how will your budget be affected by shelling out for gas?

If you take all of your expenses into account prior to apartment hunting, you should find that budgeting for rent isn’t really that complicated. How much should you pay for rent? The simple answer is no more than what you can afford.


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