What percentage of income should go to rent and utilities

Sometimes, renting is a much better option than buying a house. Yep, it’s true! When you’re just starting out after leaving your parents’ house, working hard to get out of debt, or newly married, renting is a great idea.

How much do you need to make to afford $1,500 rent

And renters are definitely in good company—more than 100 million people in America are renters.¹

But if you’re planning to start renting a house or apartment, you probably have an important question on your mind: How much rent can I afford? You may even be wondering about that if you’re already renting.

So, let’s dig into how much you should spend on rent.

How Much Should You Spend on Rent?

Your rent payment (including renters insurance) should be no more than 25% of your take-home pay. Here’s an example:

• Let’s say you make $56,000 per year.
• Your monthly take-home pay after taxes would be around $3,734.
• If you multiplied that take-home pay by 0.25, you’d wind up with $933.50.
• So, with a $56,000 salary, the most you should spend on rent in a month is $933.50.

Simple, right

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