TL;DR? Head over to our nifty rent calculator to instantly see how much you should spend each month on your rent.

Your rent due date looms on your calendar every month. Stormy clouds, dementors, bad omens, and evil villains circle that tiny, little date. We feel you. If you absolutely dread paying rent because it annihilates your bank account at the end of each month, you may need to rethink your budgeting strategy.

This opens up a few important questions:

  • How much of your monthly income should you spend on rent?
  • What is a healthy amount and what can you afford?

We understand they can be difficult to answer, and that’s why we created this guide. Read on for tips detailing how to calculate what you should spend on rent, so you can start setting aside enough funds to afford something more than cup o’ noodles for breakfast, lunch, and dinner.

First things first: Figure out your rent-to-income ratio

Most people recommend spending 30% of your income on rent.

Let’s put this into perspective with some dollar amounts: if you make $2,000 a month, then it’s advised to pay 2,000 x 0.3, which amounts to $600. If this is the case, you may want to find roomies or move somewhere that offers cheap housing—like Vietnam, Bali, Koh Tao, and the list goes on.

Quick breakdown of 30% at a few income levels that should help out…

  • 30% of $2,000 = $600
  • 30% of $3,000 = $900
  • 30% of $4,000 = $1,200
  • 30% of $5,000 = $1,500
  • 30% of $6,000 = $1,800

There’s a high chance that you have student loan debt, a gym pass, you have to buy groceries, or maybe you have a family. The point? You have to consider so many factors when calculating how much money to set aside for rent. 

However, the general rule is to put 30% of your income aside.

Keep in mind that you don’t have to stick to the 30% rule. You can opt to go the economical route and save some dollars by only spending 20% on rent. Some may find that they don’t spend a lot of money on other things like traveling, shopping, or student loans, so they opt to dip into luxury and spend 40% of their income on rent. The choice is yours! Let’s take a deeper look at each option.

Should you go the economical, middle of the road, or extravagant route?

I’ll help you figure out where you fit by painting some real-life scenarios. 

What does a typical economical person look like?

You’re wrestling with debt—student loans, car payments, neverending debt to your parents, and the list goes on. You’ve just graduated from university, have a near minimum paying job, but you want to continue to go out and dance with your friends on the weekends. You want to save money to travel to the corners of the world. You want to buy an expensive take-out meal every so often, sit in your pajamas, drink cheap wine, and watch a movie on Netflix (another monthly fee).

Does this person sound like you? You may want to consider choosing a less expensive living situation and going with 20% of your income towards rent. 

Economical housing expectations:

Get ready for a cheap house or flat with minimal amenities, and in an okay neighborhood. Don’t expect to live in luxury. You will probably end up having a couple (or more) roommates and share bathrooms. If you’re comfortable with people, you can even opt for a room with multiple beds in it to really go the economical route.

What does a typical middle of the road person look like?

You’re living a relatively balanced life—finance-wise. You can afford to go out on the weekend, hit up your favorite coffee shop almost daily, you like to go on vacation once a year, and you don’t have too much debt. You prefer living in a nicer place, but you aren’t too worried about getting the best amenities.

Does this person sound like you? You may want to consider putting 30% of your income to rent. 

Middle of the road housing expectations:

Be prepared to land a decent place with most amenities—depending on your income—in a respectable neighborhood. You may or may not find a spot in the most central or cleanest neighborhood, but you never know what you’ll find!

What does a typical extravagant person look like?

You don’t have much debt to pay, if any. You have a good job, and you live by yourself. No kids. Going out isn’t really your thing. You prefer to spend a lot of time in your cozy home, where your amenities and neighborhood have you feeling safe and warm. One of your biggest monthly fees are likely Netflix, HBO, Hulu, and Disney+—’cause how can a homebody stay at home without bingeing on their fave shows and movies every so often?

Extravagant housing expectations:

You will likely be able to find a house within a desirable neighborhood with the right amenities. However, it’s important to note that most landlords follow the 30% rent-to-income ratio rule, and most insist that you follow it. As a result, you may have a tougher time finding a space to rent.

Other things to consider

Before you sporadically rent a flat in San Francisco or New York City, consider the following additional expenses:

  • Do you have a car? You will want to consider gas prices, parking spot prices, and monthly insurance costs. 
  • Don’t forget about the deposit fee before you move in! This is usually the equivalent of one month’s rent. 
  • Do you have a pet? If so, I’m jealous. But unfortunately, you may be subject to pet rent. 
  • What about utilities? That water bill can be a drag sometimes, can’t it? You may need to include utilities, rental insurance, and cable and internet bills in your monthly calculation. 
  • How often do you dine out? Do you like to party on the weekends? You will also want to consider this when calculating your monthly budget. 

The overall budget rule

In general, most people follow the 50/30/20 rule. This budgeting strategy gets you to set aside 50% of your monthly income for fixed expenses like rent, utilities, transportation, and groceries (yes, you need to eat). 

This is the fun part: 30% goes to entertainment, shopping, and eating out! I think this is my favorite part of the budgeting strategy, you? The last 20% should go to savings. It may be easy to dip into this fund, but you never know when you’ll get into an accident, when your computer will break down, or when you’ll drop your phone in the toilet, and the list goes on. 

Plus, some financial experts recommend that you should have three to six months of finances saved up in case an unexpected situation comes along that requires some cash. It’s best to start putting that 20% towards this.

Want to make it easy on yourself? Use Anyplace.

Do your income-to-rent calculation at 20%, 30% and 40% levels, and then head to Anyplace. Choose the city you want to live in and then adjust the price range down to the one that fits your preferred income-to-rent ratio. Here’s the bonus: All of our apartments, co-living spaces and rooms are fully furnished with shared spaces, amenities like house cleaning, and WiFi + utilities included. So, you’ll actually be getting more for money than just paying for a place to live—you’ll get services like WiFi free, which could cost $50-60 / month.

Forget about long leases, too. Every accommodation on Anyplace has flexible terms, so you can live there on a monthly basis. This way, if you want to move or upgrade, you can do it easily without breaking a long lease agreement.

BONUS: If you’re downright horrible at math like me or too lazy to compile your expenses together, our cool new rent calculator can help you figure out your rent-to-income ratio.

Your thoughts

Well, there you have it! Some advice on how much to spend on rent. What do you think? Are you the type of person who wants to spend 20%, 30%, or 40% on rent? Let us know in the comments. 


Where to next? Find flexible month-to-month rentals across the globe on Anyplace.

Kelsey Krahn
Author

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