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Rent Affordability Calculator

Find out how much you should be spending on rent based on your income to maintain a healthy budget.

Enter Your Income

Your rental budget will appear here.

How Much Rent Can You Afford?

Determining how much rent you can comfortably afford is a critical step in managing your personal finances and maintaining a healthy budget. Spend too much on rent, and you risk being "house poor," with little money left over for savings, debt repayment, and other life goals. Spend too little, and you might compromise on location, safety, or quality of life. A rent affordability calculator provides a solid, data-driven starting point by using widely accepted financial guidelines to help you find that sweet spot.

The 30% Rule: A Time-Tested Guideline

The most common rule of thumb for rent affordability is the 30% rule. This guideline suggests that you should spend no more than 30% of your gross (pre-tax) monthly income on housing costs. For renters, this typically includes just the monthly rent payment, though some also include utilities in this calculation for a more conservative estimate. This rule has been a cornerstone of personal finance advice for decades because it generally leaves enough room in your budget for other essential expenses and financial goals.

The calculation is straightforward:

  1. Calculate Your Gross Monthly Income: Divide your annual salary by 12.
  2. Apply the 30% Rule: Multiply your gross monthly income by 0.30.

    Affordable Rent = (Annual Income / 12) * 0.30

For example, if your annual income is $60,000, your monthly income is $5,000. Your recommended rent budget would be `$5,000 * 0.30`, which equals $1,500 per month.

Beyond the 30% Rule: A Personal Decision

While the 30% rule is an excellent starting point, it's not a one-size-fits-all solution. Your ideal rent budget may be higher or lower depending on your personal financial situation and priorities:

  • High Debt Levels: If you have significant student loans, car payments, or credit card debt, you should aim to spend less than 30% on rent to free up cash for debt repayment.
  • High-Cost-of-Living Areas: In expensive cities, it may be nearly impossible to find adequate housing for under 30% of your income. In these cases, you might need to allocate a higher percentage to rent, but this will require cutting back in other areas of your budget.
  • Financial Goals: If you are aggressively saving for a down payment on a house or investing for early retirement, you might choose to live more frugally and spend only 20-25% of your income on rent. You can explore homeownership costs with our House Affordability Calculator.

Ultimately, the best approach is to create a detailed personal budget to see where your money is going and determine a rent payment that allows you to live comfortably while still meeting your financial goals. For more on budgeting, resources like NerdWallet's budgeting guide are a great place to start.