Enter your total monthly take home pay into the calculate to estimate a max amount your should spend on rent every month.
Rent Budget Formula
The following equation is used to calculate the rent budget you should consider spending every month.
R = M * SF
- Where R is the rent budget
- M is your monthly take-home pay
- SF is a savings factor
- Maximum savings : SF = .15
- Average savings: SF = .25
- Minimal savings: SF = .35
Rent Budget Definition
A rent budget is defined as the amount of money a person should spend on rent based
Rent Budget Example
How to determine a rent budget?
- First, determine your take home.
Calculate your monthly take home pay after taxes.
- Next, determine you desired savings.
Determine your desired savings rate.
- Finally, calculate your budget.
Calculate your budget using the equation above.
The recommended maximum someone should spend on rent is typically 35% of your take home pay for normal earners. it will ultimately depend on other expenses.