First Apartment Budgeting Basics: How Much Rent Can You Afford on Your Salary?

The most frequent question we get is, “how much does it cost to move to an apartment?” We have covered the topic many times before, so this time we’ll start by looking at what it will cost to live in your first apartment.  We estimate the cost at various salary levels, ranging from $20,000 to $50,000, so you can figure out if living on your own is affordable at your salary. The estimated taxes and expenses below assume a single individual who takes a standard tax deduction and who does not get medical insurance through employment.  The state and local taxes and commuting costs are pegged to New York City levels and will be most likely less in other cities. The monthly rent is estimated at the HUD’s recommended maximum of 1/40th of your annual salary. Of course, your actual expenses will vary, depending on your personal tax and employment situation, but the chart below gives you some rough guidelines. Note: If you have student loans,  car loans or credit card debt, those payments have to come off first from your take-home pay.

how much rent can you afford

If it looks like you’ll be able to cover all your expenses and have a little left over for savings and for going out with your friends now and then,  you’ll need to figure out next how much money you have to save before you start looking.  In addition to the first month’s rent, your landlord wants a security deposit, too.  There are also smaller expenses for credit check fees and possibly other fees related to securing the lease. (Typically, these fees are lower in a roommate situation.)  And as it comes to furniture, in the minimum, you’ll need a bed to sleep on.   If you meet the savings targets below before you start your apartment hunt, you’ll have a good chance of landing your first apartment.  In terms of timing, if you can live with family or friends and save the money you’d otherwise pay for rent, you should be able to hit the savings target in just three short months.

Savings target

 

 

 

 

 

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Comments (7)

  1. Avatar Bull

    Ok I sound like an asshole or a pretentious prick or something, but I have over $100K in student loans =(, so a bit worried about that.

    Reply
    • MFA Editors MFA Editors

      Hi Bull,
      Obviously you are smart and well-educated so you should be able to figure out your expenses.
      100K in student loans sounds like a lot but you are making $95K. Even if taxes (income, soc.sec., Medicare, health insurance) take third of your income, you still end up with $5K a month in bank. You should be able to pay at least 1K towards your loans each month and still have money for rent, utilities, commuting/car, food, clothing, laundry/dry cleaning, hobbies, and even going out now and then.
      You might consider living with a roommate for a couple of years and really hack away at that loan so you get it down to a more comfortable level.
      Of course, if that 95K job is in NYC or SF, things will be tighter. If you really want pay that loan down fast, a roommate share is the only option.
      MFA Team is rooting for you!

      Reply
    • Avatar Susan

      There is so much talk about student loan repayment for so many people and that it is affecting their quality of life. congress has spend some tie on this issue continuously passing more bills to try to help these people. My son’s payment is $350/mo for many years to come. And he’s 46. You read often about people still paying on student loans into their sixties. So take the rent estimate and subtract student loan payment.

      Reply
      • MFA Editors MFA Editors

        Student loans are the yoke around the neck of so many young people. No other affluent country forces that burden on their younger generation, whose education is key to the country’s future. Write/call your representatives in Congress and demand that they recognize that and help.

        Reply
  2. Avatar Bull

    This is useless bullshit. I’m starting with a $95000 job. I have no idea what my expenses should be.

    Reply
  3. Avatar The Taliesin

    Definitely a huge post that needs to not be overlooked by any renters. I wish our renters looked more at resources like this and paid more attention to what matters like budgeting and having enough money to pay for basic necessities like rent.

    Reply
  4. Avatar Roastie

    I wish I made at least 20,000. I live in a very expensive city(new York), still with my parents. I’m also a student. Even with working two jobs, I still wouldn’t be able to afford it here. Maybe with a roommate, maybe not. :( I work part time due to my job not having enough hours, therefore I have to take a crappy second job. Ah well. Great site, though.

    Reply