How Much to Spend on Rent: Budgeting Guide + Calculator

Figuring out how much to spend on rent isn’t always easy. You have other expenses, savings to put away, and sometimes student loans to pay back. So, how much should you spend on rent? Thankfully, creating your rental budget doesn’t have to be confusing. Discover how to create a budget for getting a new apartment in this guide.

How Much Should You Spend on Rent?

The 30% Principle

The 30% principle is a popular rule of thumb that states that you should only spend a maximum of 30% of your monthly income before taxes on your rent. Most landlords require you to earn three times the monthly rent, so it’s a good idea to calculate your rent like this.

You can use the three methods below to calculate how much you want to pay for rent with the 30% principle approach.

1. Multiply Gross Monthly Salary by 0.3

This is the most common method of calculating your rent-to-income ratio. Just multiply your gross monthly salary by 0.3 (which is equal to 30%). The result you get is your maximum rental amount.

For instance, if your:

  • Monthly Income = $5,000
  • Maximum Rent Amount = $5,000 × 0.3
  • Maximum Rent Amount = $1,500

2. Divide your Gross Annual Salary by 40

This method is similar to the first one. But it’s simpler and faster if you want to use your annual income to calculate and not your monthly income. To do this, divide your yearly income by 40.

Here’s an example of how to do that:

  • Annual Income = $80,000
  • Maximum Rent Payment = $80,000/40
  • Maximum Rent Payment = $2000

3. Multiply Monthly Rent By 3

This is simply the fastest means of calculating your rent-to-income ratio. Just multiply the monthly rental amount by 3.

Keep in mind that your monthly salary before taxes and deductions must be more than the amount so that you’re sure you can afford the rent.

For instance, if:

  • Monthly Rent Amount = $2,700
  • Required Monthly Salary = $2,700 × 3
  • Required Monthly Salary = $8,100

However, the disadvantage of this method is that it increases the required salary by 3%. Still, it’s a fast method that you can easily use.

Is the 30% Principle Always Effective?

The 30% principle isn’t always practical and may not work for everybody. This is because you may end up not being able to save. Also, it doesn’t account for utilities, renters insurance, and other housing costs. It only focuses on rent.

Another setback of the 30% principle is that it doesn’t account for inflation, income stagnation, and increasing rent prices.

Also, the 30% rule does not consider your current financial situation. For instance, it doesn’t consider the student loan amount you might be paying back. You need to take your earnings, taxes, financial plans and goals, and the rate of the rental market into consideration to be effective.

How to Calculate Your Rent Budget

The 30% rule isn’t the only way to calculate your rent budget. Discover other ways to find out how much you should pay for rent.

The 50/30/20 Rule

The 50/30/20 rule of thumb is slightly straightforward and helps to split expenditures into needs, wants, and savings. That is:

  • 50% of income is on necessities, or needs, which include insurance, rent, transportation, food, and essential utilities
  • 30% of income on wants, which include entertainment, monthly subscriptions, travel, and meals out
  • 20% of income on savings and debt repayment, which includes retirement and emergency funds

However, the downside to the 50/30/20 rule is that it won’t state the exact amount you should spend on rent per month.

Use a Rent Calculator

You can calculate your rent budget with a rent calculator like the Brixbid Rent Calculator.

A rent calculator can help you to be sure about the exact amount to spend. To use the Brixbid Rent Calculator, all you need to know are:

  • Monthly Take-Home Pay
  • Recurring Monthly Expenses
  • Savings
  • Fun Money

And the calculator does the rest for you!

Factors to Consider When Deciding Your Rent Budget

Costs Associated With Renting

Before you decide on a rent budget, you have to consider the costs associated with renting. Make sure you can afford the rent, pay for associated costs, and have some savings. If not, you may have to consider a more affordable apartment. Standard rent-associated costs include:

Move-in Fees or Security Deposit

While deciding on a rent budget, you must also consider the move-in fees or security deposit. Depending on the landlord’s requirement, you’ll have to pay either of them together with your rent.

A security deposit is usually two to three times the monthly rent. In Chicago, however, there is no maximum or minimum legal amount for a security deposit. Move-in fees are usually less than a month’s rent and are non-refundable. So, before you choose an apartment, be ready to add these fees to your budget and pay them.

Pet Deposit and Rent

Before deciding on a rent budget, consider a pet deposit if you’re moving in with your pet. Landlords usually require a pet deposit to cover any damages your pet might cause during your stay. A pet deposit also may not be refundable

Some landlords may also charge an additional fee for pets. This is usually $20-$30 per pet. Plus, pet owners also can’t forget about other pet-related expenses for amenities, such as dog parks, poop bags, extra pest control for the building (food that sits out for humans and pets attracts pests), etc.

Moving Costs

It doesn’t matter if you’re moving to the building next door or to the other side of the city, you still have to have a plan to get your stuff there. And moving can cost a pretty penny. From buying boxes to paying for movers or a U-Haul, you should set aside a budget for this. Even if you have friends who help.

Renters Insurance

Although it’s not legally required in Illinois, some landlords require renters insurance before they rent out their apartment to you. This insurance saves you from liability claims like injuries and losses.

If your landlord requests insurance from you, you should ask how much coverage they need to have in order to do a proper price comparison.


Utilities are an essential factor to consider when deciding on a rent budget. This includes water, electricity, trash disposal services, etc. Some apartments may include some or all utilities, though not required.

These are unavoidable bills that you must pay. So, it’s important to add this to your rental budget.

Daily Commuting Costs

Before choosing an apartment, consider its proximity to work. If it’s far, you’ll have to pay extra commuting costs, reducing your savings. So, consider getting an apartment close to your workplace.


In most cases, you’ll have to pay extra for parking. On-site parking can be in a covered or uncovered garage–where uncovered is usually the cheaper option. Your landlord may also have a street-parking option. In some neighborhoods in Chicago, permit parking can even be cheaper than paying a monthly parking fee. If there is no street parking or garage you have access to, you may need to park in a private garage–which will probably cost more.

Furnishing Costs

Another factor you want to consider is the furnishing costs of relocating to a new apartment. This would include the cost of non-included appliances (blender, toaster, etc.), additional lighting, décor, and furniture. Luckily, Facebook Marketplace and Craigslist offer cheaper options to furnish unfurnished apartments. 

Your Lifestyle

You should get an apartment that suits your personality and lifestyle. This will determine how much you’ll spend on rent. 

For example, if you love jogging, you might consider living near a park where it’s more convenient for you to get your run in every day. If you love to go out on the weekends (and maybe some weekdays, live your life!), it may be more economical for you to live near nightlife to avoid the frequent Uber charges and surge pricing. But, there may be different price points for living near these points of interest.

10 Tips to Reduce Your Rent

Here are some tips on reducing rent costs so you have some money left for yourself.

1. Negotiate the Rent

An excellent way to reduce rent costs is to negotiate. Strike a bargain with the landlord if you’re not comfortable with the amount they’re asking for. However, approach the negotiation politely to increase your chances of success. 

Brixbid takes the awkwardness out of negotiating your rent. Our built-in rent negotiation platform can find the ideal price point for you and your landlord, so you can rest assured that you’re getting the best value for your rent. 

Browse our listings, find your dream apartment, and negotiate for lower rent!

2. Find a Roommate

This is one of the easiest ways to reduce rent costs. The moment you love an apartment, but the price seems high, you can go in search of a roommate. That way, you split the total rent.

This will also help you save on utilities and gives you companionship, too.

3. Look for an Apartment During the Winter

During winter, landlords often find getting tenants challenging. So, you can consider renting an apartment then to reduce rent costs. And you just might get your choice apartment at a reasonable price.

When you rent an apartment during winter, ask to sign an extended lease that will end in the summer. That way, by the time you move out, your landlord will be able to get another tenant for the apartment.

4. Give Up Parking Space

If you don’t have a car, reduce rent costs by giving up your parking space. That way, the landlord can give it to other tenants who will find it useful, and you can save money.

5. Get a Smaller Apartment

If you don’t have a large family, there’s no point paying for a big apartment that you will end up not maximizing. Simply get a smaller apartment that can accommodate your things and reduce rent costs.

6. Check Other Locations

If the rent for apartments in an area is out of your budget, check out other affordable locations

Alternatively, you can always reach out to a trusted Brixbid Plus broker. Our agents have thorough knowledge of all Chicago areas, and their existing relationships with landlords can help you find the right place at the right price.

7. Pay Upfront

You can also reduce rent costs by paying upfront at a discounted price if you can afford it. Just speak with the landlord and pay before you move into the apartment if they agree. However, ensure you pay back the money into your savings every month.

8. Request to Sign an Extended Lease

Landlords want serious and stable tenants. So you can reduce rent costs by requesting to sign an extended lease of one or two years. That way, the landlord is assured that you’re not moving out anytime soon and may be willing to reduce the total rent cost.

9. Work Remotely

If you work remotely, you can get an apartment in an affordable location without worrying about the distance to work. This way, you get to save on rent costs, and the best part, you save on commuting costs, too.

10. Participate in a Resident Referral Program

Resident referral programs are also a smart way to reduce your rental cost. Ask your landlord if they offer a rent discount for tenant referrals.

If they do, refer tenants who are interested in their apartments. And you’ll get some money in exchange for your referral. This way, you can reduce rent costs.

How to Split Rent With a Roommate

Living with a roommate can lower how much rent you will spend.

If you have to split rent with a roommate, there are specific tips you must consider so that none of you will feel cheated.

1. Understand the Landlord’s Policy

If you want to split the rent with your roommate, understand your landlord’s policy. That is, if two or more occupants are present on the lease, then the legal duty of each tenant referral is joint and individual. In clearer terms, if your roommate doesn’t pay rent, you’ll likely pay for the other half, no matter what happens.

2. Sign a Written Agreement with Your Roommate

When you move into your new apartment with a roommate, agree on how to split the rent.

So, if you both agree to anything, make sure you sign to that effect to avoid denial or disagreement in the future. The agreement should include a statement about what decision to take on anyone who goes against the agreement.

3. Conclude on How to Divide the Bills

Usually, roommates should pay equal rent, but you should agree and conclude on how to divide it. You can choose to split the utility costs. Also, to make things fairer, you can calculate the total square footage of each room, and each roommate can pay for their bedroom plus half of the common areas.

4. Confirm the Payment System from the Landlord

You need to confirm whether there is an online payment system or not. If your landlord has one, each tenant can pay their rent separately, so you don’t have to bother dealing with checks in the mail.

If your landlord doesn’t have an online payment system, you’ll have to monitor rent checks with your roommate to ensure they’ve paid their share of the rent.

5. Use Rent-Splitting Apps

You can use a piece of paper or an Excel spreadsheet to track your expenses. Or you can use one of these handy rent-splitting apps to work out who needs to pay what:

  • Split-wise: This is a rent-splitting calculator you can use when moving to a new apartment with your roommate.
  • IOU: This is a good app for splitting rent and keeping track of your roommate’s debts. You can send emails to your roommate(s), upload expenses, and divide them equally with your roommate(s).
  • Venmo: This is perhaps one of the most well-known apps for rent-splitting. Not only can you split bills with it,  but you can also use it to pay your friends and family.
  • Splitrr: This rent-splitting app is so easy to use. You don’t have to log in. Just upload costs and select equal or unequal splittings with your roommates. It works perfectly without the internet. It provides you with a list of debts, and you can get the PDF versions across to your roommate(s) via email.

What Should You Do If You Need Help Paying Your Rent?

Life happens, and keeping up with your expenses may be challenging. If you’re going through a rough patch and need help paying your rent, the tips below can help.

  1. Seek financial assistance: If you’re finding it tough to pay your rent, a local rental assistance program may help.
  2. Speak with your landlord: Let your landlord know of your constraints, and they may offer you the option to pay in installments to reduce the pressure. Open and honest communication is key to a successful tenant-landlord relationship.
  3. Ask your friends and family: You can ask for help from your family and friends. However, make sure you have a plan to reimburse them.