Asked by: Mirel Lopez De Ipiñaasked in category: General Last Updated: 11th March, 2020
How much is too much for rent?
Similarly, it is asked, how much should I pay in rent?
Rule of thumb: Spend a fixed percentage of your income on housing. The general recommendation is to spend about 30% of your gross monthly income (before taxes) on rent. Therefore, if you'll be making $4,000 per month, then your rent should be $4,000 x 0.3, or about $1,200.
Similarly, how much do you make and how much is your rent? The general rule of thumb is to budget 30% of your gross monthly income for rent. (Hint: Your gross income is how much you make before taxes.) If you make $40,000 a year, divide this by 12 and you have your gross monthly income (3,333). Take 30% of 3,333 and you're left with a little under $1,000.
Moreover, are you paying too much rent?
But it's also a good idea to learn whether you're paying too much rent for an apartment you like or already live in. Paying overly high rent means you have less money available for other expenses or savings. It also means you can probably get more for your money at the same rent level.
Do you have to make 3 times the rent before or after taxes?
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.