Determining how much to spend on rent is tricky. The standard advice is that you should set aside about 30% of your gross income for rent. So if you make $60,000 a year, your rent should not exceed $1,500. While this might be plenty for an individual living in a low-cost area, it doesn’t work for a family in a pricey neighborhood.
Keep reading to learn about the nuances and compromises of budgeting for rent on a $60,000 a year salary.
Key Points
• The 30% rule recommends spending no more than $1,500 monthly on rent for a $60,000 annual salary.
• The 50/30/20 budgeting method suggests allocating 50% of take-home pay to necessities, about $1,936.50.
• Living below one’s means ensures financial flexibility and the ability to handle unexpected expenses.
• Setting aside monthly savings can help manage moving and furnishing costs effectively.
• Consider groceries, utilities, and transportation in the budget to ensure financial stability and avoid strain.
How Much Rent Can I Afford on $60K?
While nice and simple, the 30% rule doesn’t allow much flexibility. Another method to determine how much rent you can afford on $60K is the 50/30/20 budgeting rule. This recommends allocating 50% of your monthly take-home pay to necessities.
First, it’s important to calculate approximate take-home pay for someone making $60,000 a year. Payroll withholding amounts vary by location, benefit deductions, and other factors. For the sake of this example, assume the worker in question lives in Illinois, claims one allowance on their W-4, and has no other deductions for health insurance or retirement plans. This gives them a monthly take-home salary of $3,873.
Half that is $1,936.50. That bucket must hold enough to cover not only rent but also other living expenses such as utilities, groceries, and transportation. Cutting back in one area can allow you to devote more money to rent, but this is still a tight budget when you think about earning $60k, which is close to the average salary in the U.S.
💡 Quick Tip: We love a good spreadsheet, but not everyone feels the same. An online budget planner can give you the same insight into your budgeting and spending at a glance, without the extra effort.
How Much Should You Spend on Rent?
The goal of these budgeting guidelines is to help renters leave some room in their budget for paying off debt and saving money. If an individual has no debt and has already saved a fair amount in an emergency fund, then they can allocate a greater percentage of their income to rent.
On the other hand, there are many benefits associated with living below one’s means, including being able to comfortably afford surprise expenses.
Recommended: 6 Steps to Building an Emergency Fund
Monthly Cost of Living Expenses to Consider
When determining how much to spend on rent, budgeters need to know what they’re spending on all their other living expenses. That way, they can see how much room is left in the budget for rent.
It can be helpful to look back at the past few months of living expenses to get a general idea of what you typically spend. A free budget app can help you do that quickly and easily.
Here are the major expenses to keep in mind:
Groceries
Everyone needs to eat, and the last thing anyone wants to do is take on such a large rent payment that they can’t afford quality food. As of December 2024, the U.S. Department of Agriculture (USDA) estimates that the average woman should budget about $321.30 for groceries per month (of course, costs can vary depending on whether you shop at Costco or a gourmet grocery store). With that grocery budget, someone making $60K a year is left with about $1,615.20 to cover rent, utilities, and other necessities.
Utilities
Electricity, heat, cell service, and wifi are absolute necessities. Residents of Illinois, like a $60K worker, can pay on average up to $335 in utilities per month.
Recommended: Cost of Living in Illinois
Taxes
Above, you saw a calculation for a $60K worker’s after-tax income to determine how much they can afford to spend on rent. But self-employed people and gig workers may also have to deal with sending estimated tax payments to the IRS (Internal Revenue Service) on a quarterly basis.
If someone isn’t putting enough money aside for taxes, they can be hit with a big tax bill — plus penalties — come April. If you’re paying estimated quarterly taxes for the first time this year, consider talking to a tax professional to make sure you’re covering all your bases.
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Furnishings and Moving Expenses
When thinking about what rent you can afford on a $60,000 salary in 2025, don’t forget about the cost of moving into a new place. Moving to a new rental can trigger significant one-time costs. From packing supplies to truck rental, moving costs can be expensive.
So can setting up your new place, which may require furnishings, housewares, and incidentals — even if you’re downsizing your home. By setting aside a little every month, you can slowly accumulate enough to cover your next move.
💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.
The Takeaway
Affording rent can be challenging whether someone is living off a single income or is part of a dual income household. There are a few different approaches to determining how much rent someone making $60K can afford. One rule of thumb advises that you spend no more than 30% of your gross income rent, which would be $1,500 a month. Another says to keep all necessary living expenses including rent to under 50% of your take-home pay.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
FAQ
Is 50% on rent too much?
Typically, spending 50% of your income on rent isn’t advisable. Many budgeting methods recommend spending 50% on all necessary living expenses each month, including rent, utilities, food, and transportation. However, if you live in an expensive area, have no debt, and already have a sizable savings account, you may be able to get away with forking over close to 50% on rent until your circumstances improve.
What percentage of income should go to rent?
Ideally, it’s best to spend 30% of gross income or less on rent. That means if someone makes $60,000 a year, they can afford up to $1,500 per month on rent.
How do you calculate 3x rent?
There is a school of thought that it’s necessary to make three times as much as your annual rent costs. For example, if someone’s rent is $1,000, they need to bring home $3,000 a month in income, or $36,000 a year. To calculate 3x rent, all someone has to do is multiply their rent by three, and compare their amount to their monthly income.
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