What percentage should rent be of total budget?

Brian8888

I am restarting my "saving-life" and am wondering when determining a budget what the maximum percentage used for rent should be. I am moving soon and am living in a big city.

Lagoon

Ours is 33% of our budget. That's for a property in a fairly nice neighbourhood, but along with the price of food, travel and bills leaves us very little to save and means that absorbing unexpected costs is difficult.

Brian8888

Thank you Laggoon! I was aiming for lower than that but looking at the rental properties on offer I find it almost impossible.

PasturesNew

There cannot be a figure ..... if you're not earning much it'll be 60-70% ... if you're earning (say) national average wage then you've a bigger choice of places to rent and might dismiss the cheap ones and go for something pricier because "you're worth it"

One way to get a figure might be: Look up the LHA rate for a 1-bedroom place (assuming you are single) in your area, add 10% and NEVER spend more than that much on rent. Or, compare the 1-bed and 2-bed rates and pick an arbitrary mid-point at which you cap your rent spend.

opinions4u

I'd suggest that once rent / mortgage edges over 35% of net income there's a big risk of financial difficulties.

But there's no one size fits all answer.