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Rent Affordibility Calculator
How Much Rent Can I Afford? Use this rent calculator to figure out how much apartment you can afford.
Next Step: Find apartments within your budget
Type in your search location and maximum budget. We’ll find the perfect rental apartment that fits your criteria.
Your total monthly household income is $5,833 before tax. That makes your after tax income approximately $5,000 (assuming total tax rate of 10 %). We then deduct $0 from your income to pay for major expenses , leaving $5,000 for you to spend every month.
With $5,000 at your disposal every month, we recommend that you spend approximately $1,500 on rent which is about 26% of your monthly net income. You’ll be left with $3,500 to spend on other common living expenses. Part of this remaining money should go to savings while part of it should go to daily neccessities such as groceries, transportation, clothing, dining out, home utilities, etc.
If you’d like to live in luxury, you may choose to spend more money on rent and save up less. However, we recommend you pick a place that costs at most $2,000 per month in rent. Living at a place that exceeds your affordable range will leave you little money to spend on other neccessities and negatively impact the quality of life of your household. In addition, you should try to save up as much money as possible each month to account for unexpected expenses such as medical emergency, broken appliances, rental price increase and others.
Knowing how much you can afford is essential
Sometimes it’s too late before we ask that very important question “how much rent can I afford?” The whole process of the apartment search is overwhelming: using apartment finders to locate one that looks decent, calling and making appointments to tour, and applying and finally being accepted. Sometimes the details of that question of “how much can I afford” is just not adequately considered.
We made this question easier to answer with our How Much Rent Can I Afford? Calculator. Especially when you are moving to a new area, it’s hard to know just how much you can spend each month on your apartment without leaving yourself with only oatmeal for breakfast and beans and rice for dinner.
Once you finish your calculations, plug in the results of our How Much Rent Can I Afford Calculator right into your RentLingo apartment search. You can search for apartments based solely on your budget. RentLingo’s apartment reviews and ratings so that you can narrow your search to the best apartments possible that will fit your budget. Don’t forget to factor in things like utilities, renter’s insurance and transportation costs. Also, each listing is complete with its own apartment guide that includes available amenities, apartment pictures and videos, location details, and contact information. Good luck with finding your next apartment!
A simple rule of thumb is you shouldn’t spend more than 1/3 of your after tax salary on rent. As an example, your annual salary is 50K that leaves you with $4,166/month. After taxes, you should have around $3,270. One third of 3270 is about $980, and that’s what your monthly rent should be on 50K a year.
Budgeting once you know how much you should spend on rent
Once you’ve entered your information into the rent calculator and have an answer to “How Much Should I spend for rent,” you have a baseline to figure out the rest of your monthly budgeting. Since the largest percentage of your monthly income goes to rent, it’s easiest to figure out the rest of your budgeting once you have an idea of how much rent you can afford.
A common budgeting strategy follows the 50-30-20 rule. Applying this strategy to your finances is a great way to maintain a focus on controlling your monthly spending while also planning out your future’s finances.
The 50: The 50 of the 50-30-20 rule means that you should aim to pay no more than 50% of your income towards your monthly necessities. These necessities include expenses such as:
- The cost of your groceries per month
- Your utility bills like your phone bill, water, and electricity
- The cost of renter’s insurance
- Driver’s insurance
- Health & dental insurance
- And of course, how much you should spend on rent
As we calculated up above, figuring out how much you should to pay for rent gets you off to a good start on budgeting for the rest of your necessary monthly expenses and helps you lay the foundation for figuring out the rest of your finances. So, if you are looking at two different apartments and one is 40% of your income and the other is 25%, you might want to calculate how that difference will affect the rest of your monthly budgeting for your necessary costs.
The 30: The 30 represents how much of your income should go to discretionary spending. Basically, you should allocate 30% of your monthly income to cover entertainment, dining, the gas needed for out of town trips, the costs of your hobbies, and anything else that you can live without if you had to.
The 20: The last, and often what feels like the most distant, is the 20. The last 20, according to the 50/30/20 rule, is the percentage of income that should to go towards your financial goals. Whether that is putting down money for your retirement, paying off a car loan or student loan, or saving money for a down payment for your home.
While the 50-30-20 rule is a great way to think about budgeting, it’s not the end all solution to everyone’s financial situation. Chances are that if you make 30K, the way you budget is going to be different than someone who makes 80K a year. But, it all starts with using a rent affordability calculator to figure out how much you should spend on costs like rent, so that you can set the baseline for the rest of your budget.