What percentage of income should go towards rent?

The share of your income that should go towards paying your rent depends on many factors, the most important ones being your income level and where you want to live.

A THRIFTY 20%

If you spend around 20% of your earnings on rent, you could spend more on non-essentials or save more. However, spending about 20% on housing when you’re earning a regular income means you’ll have to keep your distance from sleeker apartments, especially in pricier metros. But if you’re the type of person who doesn’t mind making a compromise or two to save some money on rent, 20% can be a good option for you.

THE SWEET SPOT 30%

Spending 30% of your income on rent can help you reach a healthy balance between comfort and affordability. On a median income, 30% should get you an apartment you can truly call home. At the same time, you should have money left to keep up with any debt you may have and contribute to your savings.

A SPLURGE 40%

It can be very tempting to spend more on rent, especially if you think you’ve found the perfect home. If you earn an above-average income, allocating 40% of it to an apartment should get you a rental in a better location or more living space. But keep in mind that shelling out 10% extra each month comes with its risks. It’s always smart to keep an eye on your spending habits and plan for day-to-day expenses.