If I make $2,500 a month, how much should my rent be?

If you make $2,500 a month, your rent should be no more than $750 per month based on the 30% rule. This rule states that you should not spend more than 30% of your gross monthly income on rent, so you have enough money to pay for your other living expenses, such as groceries and gas, and save for the future.

This percentage can also fit the 50/30/20 rule, which suggests allocating no more than 50% of your take-home pay to all your necessary expenses, including rent. You then split the remaining amount between your discretionary expenses (30%) and savings (20%).

An alternative way to figure out the maximum rent you can afford is to add up the total monthly cost of your necessary expenses plus your contributions to savings, then use the amount you have left over for rent. This ensures you aren’t splurging at the expense of bigger priorities. It’s always a good idea to factor in the cost of your other living expenses, debt, and financial goals if you want to get an accurate picture of how much you can afford to spend on rent.

Factors to Consider When Determining How Much to Spend on Rent

• Living expenses: If you have a lot of other living expenses, you may have to spend less than 30% on rent. For example, if your expenses, excluding rent, take up 80% of your income, spending 30% of your income on rent will not be feasible. You will either have to spend less on rent or find ways to reduce the cost of your other expenses.
• Debt: In addition to your living expenses, you should also factor in your debt payments when determining how much to spend on rent. For instance, if your living expenses outside of rent cost $1,500 and you spend $375 on debt payments, you will not have enough money left over to cover your rent if it’s 30% of your monthly income ($750).
• Financial goals: You may want to spend less on rent if you plan to prioritize financial goals such as buying a house or building an emergency fund. That way, you’ll have more money available to allocate to these goals so you can achieve them faster.
• Income: Your income is one of the biggest factors in determining how much to spend on rent. Generally, you should not spend more than 30% of your income on rent. So, if you make $2,500 a month, your rent should be no more than $750 per month.

Even if you plan to spend 30% or less of your income on rent, it may be difficult to do so if the average rent in your area is higher than 30% of your income. If that’s the case, the tips below can help reduce how much you spend on rent. 

How to Save Money on Rent

Get a roommate. You can save money on rent if you split the cost with a roommate or multiple roommates. You can also save money on utilities, since you’ll be splitting the cost.

Negotiate lease renewal. Your rent may become unaffordable if your landlord decides to increase your rent when the lease is up for renewal. However, if you’ve been a good tenant who has always paid rent on time, you can try to negotiate to keep your rent at the same rate.

Sign a longer lease. Every time a tenant moves out, a landlord has to find a new person to rent out the apartment. In the meantime, the apartment will stay vacant, causing the landlord to miss out on potential rent. However, if you opt for a longer lease, your landlord may offer you a discount since they can count on having the apartment rented for a long period of time.

Move to a cheaper neighborhood. Rent in one part of town may be twice as much as in another area for the same-sized apartment. That’s why it’s important to compare rent prices for different neighborhoods in your area to find the best deal.

For more information, check out WalletHub’s guide on how much to spend on rent.