Stash Learn


Jul 8, 2019

What It Means to Rent What You Can Afford

By Team Stash

If you pay 30% or less on housing, it can really help you.

Twitter LinkedIn Facebook


  • The general rule of thumb is to never spend more than 30% of your gross income on housing—whether you rent or own. Before renting to you, landlords often expect to see proof that you make 40 times your monthly rent annually—it’s the same calculation as 30% of your gross income. (We’ll show you.)
  • To cut down on costs, consider getting a roommate, or roommates, to split rent with you.
  • If you know your housing costs will exceed 30% a month, find other areas in your budget where you can cut back. For example, take public transportation rather than owning a car. Reduce dining out, or stop impulse spending.
  • Look for rentals where utilities are included, as that can help you conserve cash.

Consideration: If you have a lot of debt, your monthly rent plus your other loan payments shouldn’t exceed 43% of your monthly income. You may have to seek cheaper alternatives if it does.

Let’s break it down:

If your gross pay is $3,000 a month, you should pay no more than $900 a month.

To put another way, if your rent is $900 a month, your annual income should be at least $36,000.

Jargon Hack.

What is gross pay?

Gross Pay

Gross pay is the amount you get paid prior to taxes being taken out of your paycheck.

Find out
Jargon Hack.

What is a security deposit?

Security Deposit

A security deposit is money you need to put down prior to moving in to a rental, usually in addition to your first month’s rent. It’s protection for your landlord against your not paying rent, and property damage. You typically get your security deposit back with a small amount of interest when you move out.

Find out

While the 30% rule should be your goal, remember there is a well-documented shortage of affordable housing in the U.S., and nearly 40% of renters in the U.S. spend more than 30% of their income on rent, according to research. But doing what you can to get your rent costs down will only help you in the long run.

Investing made easy.

Start today with any dollar amount.
Get Started

Investing is better with friends.

Every successful referral gets you $5.
Get my $5

Investing is better with friends.

Every successful referral gets you $5.
Get my $5

Written by

Team Stash


Invest in

By using this website you agree to our Terms of Use and Privacy Policy. To begin investing on Stash, you must be approved from an account verification perspective and open a brokerage account.