How Much of Your Paycheck Should You Spend on Rent?

Pay attention to what you can afford and adjust expenses if necessary.
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Budget experts recommend that housing expenses account for one-third of income. Regard your rent expense in the context of your overall financial health. The exact amount you spend will depend on your other obligations, such as child care, debt repayment and your personal financial goals. If your income is low, you might find it difficult to allocate a full one-third of your pay to rent. If you are a high earner, one-third may be a reasonable expense.

Devote One-Third Of Your Paycheck To Housing

As a guideline, your budget should allocate 30 to 35 percent of your take home income to housing. This includes rent or mortgage, housing insurance and electricity. Examine whether you can afford other life necessities -- like food, transportation, medical costs and savings -- after you have paid rent. A household with $500,000 of income can easily afford these necessities after a 30 percent housing expense. A household with $20,000 coming in will have difficulty paying for other necessities if 30 percent is going to housing.

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