Rent Affordability Calculator

Are you looking for a new place? Not sure how much you should be spending on rent? We've come up with some general guidelines to help you determine what the ideal rent is for your income.


Calculations Guidelines

Establish a Budget

First, you need to assess your income. How much do you bring in every year, with any salary, bonuses, dividends, interest, support, or other means of income included?

You should expect to spend about 60% of your budget on the top three budget items for most families, which includes housing, transportation, and food. Avoid going too far over this number, because you'll also need money for emergency funds, your retirement plan, entertainment, credit card payments, insurance, and all of your other monthly expenses.

The 30% Income Rule

In the past most experts recommended spending no more than 30% of your income on rent — and it's still a fair rule of thumb. On the other hand, this may just be an arbitrary number because every person's situation is different. For instance, approximately 20% of households spend more than half their income on housing and are still living comfortably.

50/30/20 Guideline

A simple rule that many follow is the 50/20/30 guideline. This suggests spending your income in the following manner:

  • 50% on fixed costs (such as rent, utilities, and transportation).
  • 30% on day-to-day expenses (such as entertainment, dining out, shopping, and other miscellaneous things).
  • 20% on financial goals (like paying down debt, building an emergency fund, and saving for retirement).