To calculate how much rent you can afford, you need to know your monthly take-home pay-your gross pay minus any tax or health insurance withholdings. Just kidding, this isn’t complicated at all!
Get out that calculator you haven’t used since 10th-grade algebra class.
#Apartment budget calculator how to#
How to Calculate How Much Rent You Can Afford
Don’t volunteer to be broke by paying too much for rent. Worse, it’ll be really tough to find enough money to get yourself out of debt or, if you’re already debt-free, save up for a down payment on a house. Sure, you’ll still be able to pay for food and put gas in your car, but you won’t have a whole lot left to spend on life’s other necessities (and, no, goat yoga is not a necessity). 2īut if you spend more than 25% of your take-home pay on rent, your budget will wind up being really tight. After all, most people are spending a lot more than that on their housing costs-nearly 36% on average. We know, 25% might seem like a low number to you. And remember, that’s 25% of your take-home pay-meaning what you bring in after taxes. That means if you’re bringing home $4,000 a month, your monthly rent should cost you $1,000 or less. Your rent payment, including renters insurance (more on that later), should be no more than 25% of your take-home pay. Once you know you’re going the renting route, the big question is, How much rent can I afford? Let’s dig into how much you should spend on rent, plus why you shouldn’t feel bad about renting. Whatever your reason for renting, you’re in good company-more than 100 million people in America are renters. You might just be starting out after leaving your parents’ house, or you might be 20 years into this whole adult thing and working hard to get out of debt. That’s no biggie-it’s okay to rent! Sometimes renting really is the best option. Okay, so you’ve crunched the numbers and decided that, for now, buying a house isn’t going to happen.
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