How Much Rent Can I Afford?

Rent is one of the largest monthly expenses for U.S. households. Housing costs – including rent, mortgage payments, and utilities, accounted for almost one-third (32.9%) of total consumer spending, according to the latest data.^[1]

But working out how much you can realistically spend on rent isn’t always straightforward. Budgeting methods such as the 30% rule and the 50/30/20 approach can provide a starting point.

In this article, we look at the different guidelines that could help you understand how to budget rent and how much you can afford.

How much should I spend on rent?

It can be challenging to calculate how much to spend on rent, with 14% of renters still incurring late fees according to the Consumer Financial Protection Bureau’s (CFPB) report in 2024.^[2]

But there are guidelines such as the 30% rent rule, the 50/30/20 budgeting method, and the debt-to-income calculation that can help you work out how much rent you may be able to afford with your income.

30% of gross monthly income

According to the U.S. Department of Housing and Urban Development (HUD) those paying more than 30% of their income on housing costs are considered cost-burdened.^[3]

The 30% rule is to spend no more than 30% of your gross income on rent and other housing costs, such as renters' insurance, utility bills, parking fees, or other home-related costs.

Let’s look at an example of this rule: If your monthly income is $3,000, then you’d spend 30% ($900) of this amount on your housing costs. You can calculate your own 30% rule by multiplying your income by 0.3.

The amount will determine how much you can spend on your rental according to this budgeting tool.^[4]

50/30/20 budget rule (needs vs. wants vs. savings)

The 50/30/20 budgeting method allocates 50% of your monthly budget to needs, 30% to wants, and 20% to savings.

The 50% category covers rent as one of your needs, but you’ll also need enough to cover other needs, such as food and transport.

50% for needs

This category covers your essential living expenses, such as housing costs, utility bills, and groceries.

The rule accounts for half of your income towards needs, including your rent. But you will also have to include other needs in this category.

Here are some of the needs included in this portion of your budget:

• Housing (rent or mortgage payment)
• Food and groceries
• Transportation (car payment or public transport)
• Utilities (electric, water, gas)
• Phone bill
  Source: ^[5]

30% for wants

The 30% category is for non-essential spending categorized as “wants.” These are things you enjoy spending money on, but are not required for day-to-day living. This part of your budget is intended for personal choices that enhance your lifestyle but are not considered essential needs.

Wants can vary from person to person, but common examples include:

• Dining out or ordering takeout
• Vacations and trips
• Hobbies
• Clothes shopping
• Gym membership
  Source: ^[5]

This portion of your budget gives you space to enjoy life while still staying on track with your financial goals. Wants are upgrades and other purchases that are not necessary for living.

20% for savings

The remaining 20% of your income is set aside for savings. This part of the budget is for improving long-term financial stability.

It will go towards the following:

• Retirement account
• Saving to buy a house
• Emergency fund
• Paying off student loans
  Source: ^[5]

Saving money can involve paying off student loans, building an emergency fund, setting aside funds for a down payment on a house, and preparing for long-term goals, such as retirement.^[5]

How much of my income should go on rent?

HUD and the Census Bureau consider households that spend more than 30% of their gross income on housing costs, including rent, utilities, and renters' insurance, to be cost-burdened.
In addition to using budgeting methods like the 30% rule or the 50/30/20 method, you can also calculate the total cost of your rental expenses and determine the percentage of your income they represent.

For example, if your rental costs were the following:

• Rent payment: $1,000
• Utilities: $80
• Renters insurance: $13
• Parking: $133

Your total monthly rental cost would be $ 1,226. If your monthly income is $3,000 (after tax), you would divide $1,226 by $3,000.

• $1,226 ÷ $3,000 = 0.41, or 41% rent-to-income ratio.

While this approach is similar to the 30% rule, it helps you see what you're actually spending on housing, without strictly following a set guideline.^[4]

Other factors that affect renting costs

When finding a new place to rent, it’s important to think beyond just the monthly rent price. Most renters face several additional costs when moving into a new home. Here are some of the common ones to plan for:

• Security deposit: A security deposit is usually paid upfront and is often equal to one month’s rent. It’s refundable at the end of your tenancy unless the landlord needs to cover damages or unpaid rent.
• Moving costs: Whether you hire movers or do it yourself, moving can quickly become expensive. Costs might include transportation, packing materials, or fuel.
• Utilities: Typically, the tenant is responsible for paying utilities such as electricity, gas, and water. Costs can vary depending on location, season, and the energy efficiency of your rental.
• Application, pet and parking fees: Some landlords charge an application fee during the rental process. If you have a pet, there may be a monthly pet fee or a one-time pet deposit. Parking fees are also common in apartment buildings or busy areas with limited parking.
• Move-in fee: Some landlords charge a separate move-in fee to cover things like changing locks or setting up access for a new tenant. This fee is usually non-refundable.
• Renters insurance: Renters insurance protects your belongings in case of theft, fire or other damage. While it may not be required, it offers an affordable safety net for many renters.
  Source: ^[4]

Ways to make rent more affordable

These tips are most helpful if you’re already renting and looking to reduce costs when your lease is up for renewal.

You may be able to make rent more affordable by choosing a lower-cost location, checking if any rent increase is regulated, or splitting costs with a roommate.

Consider your location

The location of a house can affect the rental cost. If you work remotely and your employer allows location flexibility, moving to a less expensive city could significantly reduce your rent. However, if your job or family ties keep you in a high-cost area, you may need to explore more affordable neighborhoods within your current city.

According to Zumper, New York, San Francisco, and Boston are the most expensive cities to rent with the most expensive 1-bedroom median rent prices in June 2025.

Whereas Wichita, Akron, and Shreveport all have significantly lower rent costs. Considering different locations may help you lower rental costs.^[6]

Check the regulations

If your landlord increases your rent, make sure to check your local and state rules to see if the hike is allowed. Some areas have rent control laws or caps that limit how much a landlord can raise the rent each year.

Knowing your rights can help you challenge any illegal or excessive increases.^[7]

Negotiate your rent

Although negotiating when renting is different from buying, you can carefully negotiate, especially if you have established yourself as a good tenant. If you have been respectful and professional, then you may be able to negotiate before your lease is up.^[7]

Adjust the payment date

If your rent payment is due before your payday, you can ask your landlord to move the due date to better align with your income schedule. While this won’t lower the total amount owed, it could help you avoid late fees or overdraft charges by ensuring funds are available when rent is due.^[7]

Share with a roommate

Whether you’re renting with bad credit or simply trying to cut costs, you can share them with a roommate. According to Freddie Mac, living with a roommate can help lower housing costs by splitting rent and utility bills. It also means sharing responsibility for chores and bills, and can offer social benefits such as companionship and emotional support within your living space.^[8]

What to do if you’re struggling to pay rent

If you are struggling to meet your rental costs, then you may be able to get help paying your rent or utility bills using some of the resources in your town.

Find out more with the CFPB’s guide. You may also be able to gain help paying your utility bills at Low Income Home Energy Program (LIHEAP) office.^[9]

Sources

1. U.S. Bureau of Labor Statistics. "Employment Situation Summary." https://www.bls.gov/news.release/cesan.nr0.htm.
2. Consumer Financial Protection Bureau. "CFPB Report Finds Continued Challenges for Households that Rent." https://www.consumerfinance.gov/about-us/newsroom/cfpb-report-finds-continued-challenges-for-households-that-rent/.
3. U.S. Department of Housing and Urban Development. "Comprehensive Housing Affordability Strategy (CHAS)." https://www.huduser.gov/portal/datasets/cp/CHAS/bg_chas.html.
4. Rocket Mortgage. "How Much Should I Spend on Rent?" https://www.rocketmortgage.com/learn/how-much-should-i-spend-on-rent.
5. Annuity.org. “50/30/20 Budget Calculator,” https://www.annuity.org/personal-finance/budgeting/50-30-20-rule/
6. Zumper. "Rent Report – Current Rental Prices." https://www.zumper.com/#rent-report.
7. Kiplinger. "What to Do When Your Rent Is Too High." https://www.kiplinger.com/real-estate/what-to-do-when-your-rent-is-too-high.
8. Freddie Mac. "3 Benefits of Sharing Your Living Space." https://myhome.freddiemac.com/blog/rental-housing/3-benefits-sharing-your-living-space.
9. Consumer Financial Protection Bureau. "Help for Renters Facing Housing Insecurity." https://www.consumerfinance.gov/housing/housing-insecurity/help-for-renters/.

About the author

Becca has over 10 years of experience as a content writer, working across various industries including finance, digital marketing, education, travel, and technology. Her work has been featured in publications including Forbes, Business Insider, AOL, Yahoo, GOBankingRates, and more.

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