A rule of thumb
A common guide is to keep housing to around 30% of your take-home pay. It is only a rule of thumb. In expensive cities it can be hard to reach, and in cheaper places you might spend less.
A better way to check
Work from the whole budget instead of a single rule.
- Add both take-home pays.
- Subtract savings you want to keep making.
- Subtract other fixed costs: bills, insurance, transport.
- Subtract a realistic amount for food and fun.
- What is left is the most you can put into housing.
Test it before you sign
Try paying the new rent into a savings goal for a couple of months before you move. You see if it fits, and you keep the money. Wollie shows both incomes and both banks together, so you can test the numbers as a household.
Questions
Should rent be based on gross or take-home pay?
Take-home pay is the better base, because it is the money you really have each month.
Should we count utilities in the housing cost?
Yes. Include rent and the bills that come with the home, so you compare the true cost.
This guide is general information, not financial advice.