1. What is the 30% Rule?

The 30% rule is a common guideline that suggests you should spend no more than 30% of your gross monthly income on rent. This calculator helps determine how much income you need to afford a specific rent amount while following this rule.

2. How Does the Calculator Work?

The calculator uses the 30% rule formula:

Where:

• Monthly Rent — Your expected monthly rental payment
• 0.3 — Represents the 30% guideline

Explanation: The equation calculates the minimum gross income needed to keep your rent at or below 30% of your income.

3. Importance of Income Calculation

Details: Following the 30% rule helps maintain financial stability by ensuring you have enough income left for other expenses after paying rent.

4. Using the Calculator

Tips: Enter your expected monthly rent amount in dollars. The calculator will show the minimum gross income needed to afford that rent while following the 30% rule.

5. Frequently Asked Questions (FAQ)

Q1: Is the 30% rule before or after taxes?
A: The 30% rule typically refers to gross income (before taxes), though some recommend using net income for more accurate budgeting.

Q2: What if I spend more than 30% on rent?
A: Spending more may leave less for other expenses. Many landlords require income to be 3x the rent, which aligns with the 30% rule.

Q3: Does the 30% rule include utilities?
A: Traditionally, it's just rent, but some versions include utilities. Be sure to check which version your landlord uses.

Q4: Is this rule realistic in high-cost areas?
A: In expensive cities, many people exceed this guideline, but it's still a useful benchmark for financial health.

Q5: How does this compare to the 50/30/20 budget rule?
A: The 50/30/20 rule allocates 50% to needs (including housing), 30% to wants, and 20% to savings, making the 30% rent rule more conservative.