How Much Rent Can I Afford On $60k?

It would be best if you aimed to spend around 30% of your income on rent. For example, if you’re making $60,000 a year, that’s $5,000 a month before taxes. So your monthly rent shouldn’t be over $1,500.

Apartment hunting is a tiresome process that comes with unforeseen struggles. Before you go looking for a new home, you must ask yourself one question: how much rent can I afford?

Maybe you got a raise, or you’re looking to downscale on the rent portion of your budget. Either way, you need to decide how much money you’re willing to spend each month on housing. We’ll help you decide how reasonable that is – is 50% of your income going to rent a smart idea?

When it comes to real estate prices, location dictates everything. You can rent a one-bedroom apartment in a small town in the midwest for $700. That same apartment will cost you $3,000 in Boston!

Let’s help determine how much rent you can afford on $60,000.

What percent of your budget should go to rent

The general rule implies you should spend 30% of your income on rent. The more economical, money-friendly portion is 20-25%. A rent of over 40% is a splurge and can lead to trouble paying other expenses.

If you have your eyes on an apartment and know the rent, multiply it by 40. Your yearly income should be at least 40 times bigger than your rent. If your rent is $1,500, you need to make at least $60,000.

But how feasible are the equations in real life?

As with any rule of thumb, there are situations when you can’t enforce it. If you live in an area with affordable housing, you can spend as little as 15% on rent. In highly populated areas, you might spend up to 35% of your gross income.

An income of $60,000 a year means you’re making $5,000 monthly, pre-tax. A 30% portion is $1,500, while 20% is $1,000. Try to fit your rent into the bracket between 20-30%. This means rent won’t eat up your budget, and you can still have enough money to save, invest and live comfortably.

Factor in major expenses

Taking $1,500 of your $5,000 gross income might not seem much if you don’t have debt or other significant expenses. But what happens when a major portion of your paycheck goes towards student loans?

High rent doesn’t go hand in hand with a high long-term monthly expense. For example, if you’re paying off debt, take that out of your monthly budget when calculating rent.

Let’s say you’re paying $500 towards debt each month. Then, your rent should be 30% out of $4,500, or nothing over $1,350.

Don’t exclude living with roommates

$1,500 can get you a two-bedroom apartment in the best neighborhoods in some places. However, in New York, you’d have to double or even triple that budget since the average rent for a studio is $3,573!

This sounds impossible on a $60,000, so your best bet is to share an apartment with roommates.

The 50-30-20 budget plan

One of the most popular budget plans, especially for beginners, is the 50-30-20. It suggests splitting your income into 3 categories: 50% for needs, 30% for wants, and 20% for savings.

The first and largest share goes to things you need to survive – housing, utilities, food, health insurance, gas. When making $5,000 a month, $2,500 goes to this category. If you spend $1,500 on rent, you’ll have $1,000 for all other expenses.

The second category covers non-essentials, purchases you make to feel good, like travel, gym memberships, small luxuries. Finally, the third category is savings and investments.

What is the 70-20-10 money rule?

This rule mimics living on 70% of your paycheck. The most significant section goes to all expenses from essentials to luxuries. Unlike the 50-30-20 rule, the needs and wants here fall under the same category. So if you spend more on rent, you’ll have less money for necessities and day-to-day expenses.

Then 20% goes to savings and 10% to debt payoff or charity if you don’t have any debt.

Study the housing market

A young couple is sitting on the floor in a new apartment that they've just rented.

Think of rules more like guides instead of something you have to use. Study the housing market in the area you live or plan on renting. Spending 30% of your paycheck on rent is reasonable but not possible everywhere.

Larger cities have better job opportunities but higher rent prices as well. Living closer to the center of town is convenient but more expensive. Neighborhoods in the outskirts are more affordable, but transportation can cost you hundreds each month. And a morning commute that takes over an hour is not fun.

Luckily working remote is becoming more and more popular. When you don’t have to commute and show up to an office every day, you can afford to live an hour away from work.

When moving to another area is out of the picture, you’d have to make compromises elsewhere to make up for the high rent. This is where the 50-30-20 and 70-20-10 plans can help you.

Don’t reach for your savings accounts

Searching for a place to rent is a tiresome process. Trying to find a home with a reasonable price, location, and floor plan can take months. And you might get tempted to reach for your savings for a place that’s out of your league.

We can’t begin to explain how damaging this can be to your personal finances. Rent is not a one-time expense. You’ll spend a significant amount of your savings to afford it each month. It’s not sustainable since, after a while, you’re left with no savings and an apartment you can no longer pay for.

Rent affordability calculator

The simplest way to check how much rent you can afford on $60,000 is to use a rent affordability calculator. 

These calculators are available on almost all online real estate marketplaces. They take in your monthly income, debt, monthly expenses, and savings into consideration and propose a rent you can afford. 

It’s something you can try to see where you stand. Maybe you can afford more living space than you thought! Try the Zillow version here.

Where can you rent comfortably on 60K a year

Real estate prices are dictated by demand and location. You can live lavishly on a median income in one state or struggle to pay rent in another. Here are some of the most affordable places for renters in 2021.

City PopulationOne-bedroom ApartmentTwo-Bedroom ApartmentYear-Over-Year
Rent Change
Springfield, MO170,048$636$826-24.5%
Tucson, AZ544,291$837$1,0440.8%
Greensboro, NC301,695$839$1,026-18%
Ankeny, IA71,569$1,011$1,29621%
Cincinnati, OH309,317$1,068$1,495-24.9%
Louisville, KY615,924$1,166$1,29511.6%

Cities with highest rent in 2021

If you’re trying to save or don’t like splurging on rent, you should know the states with the highest rent. New York and California take the lead, while Massachusetts and New Jersey don’t fall much behind.

For a one-bedroom apartment in New York City, you’d have to pay around $3,061. In Massachusetts, the same apartment will cost you $3,454 a month. Los Angeles is slightly cheaper at $2,715 for a one-bedroom, but it has the highest rent for a two-bedroom apartment – $4,514!


Can you live off 60K a year?

A salary of 60K a year is considered median income. Therefore, you can live comfortably as long as you rent and spend within your means.

Can I spend 40% of my income on rent?

If you earn above-average, spending 40% on rent might not cause you trouble. However, spending 40% on rent when you’re on a median income is unadvisable. So instead, use the ’40 method’: divide your yearly income by 40, and the number you get is how much you should spend on rent.

Is it better to rent or buy?

Deciding to rent or buy depends on your plans for the near future. Are you looking for flexibility or want to settle? Houses are a considerable expense but also an asset. Renting is ideal in the years when you’re looking to explore places and job opportunities.

Bottom line

Rent is the most significant monthly expense and something we can’t compromise on much. With a solid income, it’s easy to go overboard and spend more than you’re supposed to on a larger living space. This leads to compromising in other areas like savings and investments.

Stick to the golden rule – no more than 30% of your income, or $1,500 when you’re making $60,000 a year. Anything extra can go towards investing in yourself so that you can scale up to a higher-paying job.

The highly popular van-life or people who choose to live in alternative housing primarily do it because of the high rent prices. Although this is extreme, it’s eye-opening once you find out how much they save up. So don’t splurge on rent. It’s essentially money in the air. Instead, save the extra for a house downpayment.

How much is the highest rent you’ve paid in your life? Do you find 30% of your income a reasonable amount for rent?

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