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What Percentage of Income Should Go to Rent?

David Bufton Updated: November 19, 2023 • 4 min read
What Percentage of Income Should Go to Rent

Key Points:

  • Understanding the ideal rent-to-income ratio is crucial for effective financial planning.

  • A common issue you may encounter when budgeting your monthly income is determining what percentage of income should go to rent. 

  • The 30% rule suggests spending no more than 30% of your gross income on rent.

  • If you still think your monthly rent payment is taking up too much of your budget, you can explore options to reduce your expenses.

Managing your money can be overwhelming, especially when you have many different expenses to consider. From paying bills and buying groceries to saving for the future and even indulging in some luxuries, our short guide offers helpful advice to help you budget your monthly income effectively. If you're unsure how much you should pay for rent, keep reading for guidance.

The 30% Rule

A common issue you may encounter when budgeting your monthly income is determining what percentage of income should go to rent. 

The 30% rule is a popular guideline that suggests you should aim to spend no more than 30% of your gross monthly income (your income before taxes) on rent. For instance, if you earn $3,000 per month, you should aim to spend around $900 per month on rent. However, it is essential to note that this advice may only work for some, and you should view it as a recommendation rather than a rule.

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Why Shouldn’t You Spend More Than 30%?

The logic behind the 30% rule is that exceeding the 30% threshold can negatively impact your budget and limit your ability to cover other expenses such as bills, savings, and leisure activities. Keeping your rent costs within this budget may help you maintain better overall financial stability.

If the 30% rule doesn’t align with your budget, there are other options you can consider. For example, you could try the 50/30/20 rule. Additionally, you can explore ways to reduce your monthly rent payment, such as finding a roommate or moving to a cheaper location. Overall, the 30% rule isn’t the be-all and end-all – finding an effective method that works for your budget and lifestyle is essential.

The 50/30/20 Rule

When budgeting for an apartment and deciding what percentage of income should go to rent, an alternative rule you could follow is the 50/30/20 rule. This rule suggests dividing your income into three categories: wants, needs, and savings. Following these instructions, you should aim to spend 50% of your income on essentials like rent, bills, and groceries, 30% on non-essential purchases like shopping and eating out, and put 20% into your savings account. 

Like the 30% rule, not everyone will suit the 50/30/20 rule, but it’s a good rule of thumb. There are other options like the 70/20/10 budget, which emphasizes spending less on non-essentials. Ultimately, the income-to-rent ratio you choose to follow depends on your priorities and lifestyle.

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Tips on Reducing Rent to 30%

To optimize your housing budget, consider strategies like:

  • Collaborating with roommates for shared living arrangements
  • Leveraging remote work opportunities for access to less expensive living areas
  • Investigating affordable housing options in cost-effective neighborhoods
  • Restructuring personal spending to free up more funds for housing

To budget for apartments, you may want to minimize your rent expenses if they restrict your monthly budget. Below are some suggestions that could help you out.

Rant to income ratio calculation

Split With Roommates

Sharing a house or apartment with roommates can be an excellent way to reduce your monthly expenses regarding both rent and utilities. Splitting the rent of a two-bedroom property is typically cheaper than renting a one-bedroom apartment alone, and renting a room in a group house can be even more affordable.

Remote Work

If you are fortunate enough to have a job that allows remote work, a great solution could be to move to a more affordable area. Not only will you be able to maintain your current income, but you can also enjoy the benefits of cheaper monthly rent.

Consider a New Location

If you find that rent costs are taking up too much of your monthly budget, it might be worth exploring the option of relocating to a more budget-friendly area. Take some time to research neighborhoods and housing options or rental affordability that fits your financial situation.

Budget your Spending Habits

Aside from budgeting a rent percentage of your income, you may also wish to look at your other expenditures. If you frequently order takeout and eat out at restaurants, spend money on entertainment and travel, or splurge on frequent shopping trips, consider how these costs affect your monthly budget. So, if you’d prefer to live in a better neighborhood or a more spacious apartment, cutting back on these non-essential expenses may help you afford a new space. 

Personalizing Your Rent-to-Income Ratio for Financial Well-being

Effective rent budgeting is pivotal in achieving overall financial health. The 30% rule and the 50/30/20 framework are starting points, but tailoring these principles to your unique financial situation is key.


While managing your monthly income and budget expenses can be challenging, the widely recognized 30% and 50/30/20 rules provide some solid guidelines that can help you determine what percentage of income should go to rent.

If you still think your monthly rent payment is taking up too much of your budget, you can explore options to reduce your expenses, including sharing a place with roommates or cutting down on non-essential expenses.



What percentage of income should go to rent?

There are many different ideas regarding how much of your monthly income you should spend on rent, including the 30% rule, which advises spending no more than 30% of your gross income on rent. While this is a good benchmark, it isn’t one-size-fits-all advice.

Does the 30% rule apply to everyone?

While the 30% rule is helpful, it’s important to remember that individual circumstances vary. The applicability of this rule also comes down to factors like lifestyle choices, family considerations, and overall financial priorities.

What do I do if my monthly rent payment exceeds 30% of my income?

If your rent takes up more than 30% of your monthly income, we recommend exploring the option of splitting your rent with roommates to reduce your burden. Another option is to relocate to a more affordable property or area. Having a job that allows for remote work can facilitate the relocation process. Plus, you may wish to reduce non-essential expenditures.

Written by David Bufton

After graduating from the University of Warwick with a degree in accounting, David went on to become a fully certified accountant. Since then, he has amassed years of experience working in and writing for various sectors, including finance, gaming, and telecommunications. Now, he uses his extensive experience and knowledge in business and finance to deliver top-quality content.