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How Much You Should Really Be Spending On Rent in 2025 Based on Your Income Bracket

Yahoo

9 hours ago

Yahoo

How Much You Should Really Be Spending On Rent in 2025 Based on Your Income Bracket

Rent is one of those areas that is getting significantly more expensive, especially in key metropolitan areas and big cities. Read More: See Next: So, naturally, you should wonder how much you should spend on rent. Now, this varies from person to person by income. If you consider yourself part of the middle class, the average household income is $80,610, according to the U.S. Census Bureau. The average individual income is about $62,088, based on the latest data from Fidelity. However, generally speaking, people are paid more in big cities. For example, in New York, full-time workers earned a median of $70,295 in 2023, according to the U.S. Census Bureau. So, everyone makes a little different money, so how do you determine how much to spend on rent? Let's dig into it. This is the oldest rule when it comes to what to spend on rent: No more than 30% of your income. Now, the 30% rule works in states, cities, and towns where rental prices are in line with median average earnings. However, Zillow data shows that the average New York City studio currently rents for $3,414 a month. That would mean most won't be able to afford to live in the average studio in NYC, since you would need to make over $11,000 per month to do so. So, you may have to opt for a less desirable apartment or live in another neighborhood outside the city that's more affordable. Discover More: On the other hand, cities like Phoenix or Houston have an average rent of just around $1,000, which would allow practically any average earner and especially any household to afford rent in those areas easily. Based on Zillow's top rental markets data, the average person can comfortably fit into the 30% bracket in the following markets (prices are for 1-bed apartments or condos): Houston, TX: $1,150 Phoenix, AZ: $1,209 Chicago, IL: $1,542 Orlando, FL: $1,391 Atlanta, GA: $1,437 If we break this down depending on income brackets, here is what 30% looks like (using a median amount): Low income ($2- 3k/monthly): ~$750 (30% of $2.5k) $3-4k/monthly: ~$1,050 $4-5k/monthly: ~$1,500 $5-6k/monthly: ~$1,650 $6-7k/monthly: ~$1,950 $8-9k/monthly: ~$2,400 $9-10k/monthly: ~$2,850 If you're an average earner, making just over $5,000 per month, you should aim to spend under $1,650 per month on rent. If you can spend less than 30% by living in a more affordable area, then this is worth doing to give yourself greater financial flexibility and security. Remember, your income is the guiding factor, regardless of the 'rule' you follow. Another way to divide what you earn is: 50% on living costs, including rent 30% on living, doing fun things, shopping, eating out, and holidays 20% on saving and investing, to use this money to buy a property and get out of rentals. Location can and will always make a huge difference when it comes to rental prices. Some cities are more expensive than others, even when comparing similar-sized properties. The same is true of areas within cities, towns, and even rural communities. Some are more desirable than others, and therefore, more expensive in areas where there are more owners and fewer rental properties, which will also push the price up. Naturally, the more space (bedrooms, especially) that you need, the more a house will cost. For example, in those more affordable markets we listed above, this is the Zillow average price for 3-bedroom houses: Chicago, IL: $2,500 Houston, TX: $2,101 Phoenix, AZ: $2,275 Orlando, FL: $2,400 Atlanta, GA: $2,179 As a concept, we trust the market, but it's hard to know whether it's going up or down. Rental prices are like that. Prices move up and down for numerous reasons, like interest rates going up or a residential area improving. They can also go down if an area experiences a decline or interest rates decrease (if a landlord passes along any cost savings). Supply and demand are also big factors, and there can even be seasonal variations in pricing. Thanks to Zillow and other data-driven platforms, it's easier to see when and why prices move, and you can use this to potentially predict which areas will get cheaper or more expensive over time. More From GOBankingRates 10 Genius Things Warren Buffett Says To Do With Your Money This article originally appeared on How Much You Should Really Be Spending On Rent in 2025 Based on Your Income Bracket

Here Are the Cheapest Cities To Live in the Most Expensive States

Yahoo

9 hours ago

Yahoo

Here Are the Cheapest Cities To Live in the Most Expensive States

Even famously expensive states have relatively inexpensive places to live. It's all about knowing where to look. Among the 16 most expensive states (annual living costs of more than $80,000 a year), there are cities where living costs come in tens of thousands of dollars below state averages. The $40,000 to $50,000 range is the most common. Find Out: Learn More: In a recent analysis, GOBankingRates has taken those 16 states and identified the least expensive city in terms of living costs for each. The cities were pulled from Zillow's list of the 2,500 largest U.S. cities, based on housing market size, for March 2025. The threshold was increased to 4,000 for Maine, North Dakota and Vermont. Cost-of-living data was sourced from the Bureau of Labor Statistics and Sperling's BestPlaces. Here's a rundown on the least expensive city in each of these expensive states, along with side-by-side costs. Also see the cost of living in every state. State's ranking on the 'most expensive' list: 16th Average annual cost of living in state: $81,067 Average annual cost of living in city: $36,876 Cedar City is located about 250 miles southwest of Salt Lake City and 170 miles northeast of Las Vegas. Cedar City comes in below the national average for grocery costs, at about $465 a month. Check Out: Also Read: State's ranking on the 'most expensive' list: 15th Average annual cost of living in state: $86,167 Average annual cost of living in city: $39,046 You'll find Sierra Vista about 20 miles north of the U.S.-Mexico border in southeast Arizona. Monthly rent here will cost you about $1,400 on average. Discover More: State's ranking on the 'most expensive' list: 14th Average annual cost of living in state: $86,554 Average annual cost of living in city: $34,981 Klamath Falls is a town of about 22,000 residents, located about 15 miles north of the California border on U.S. Route 97. It comes in below national averages for groceries (97.3% of the average), healthcare (99.6%), utilities (94%) and transportation (68.6%). State's ranking on the 'most expensive' list: 13th Average annual cost of living in state: $86,631 Average annual cost of living in city: $36,531 Waterville is located along the Kennebec River, about 80 miles northeast of Portland, Maine. Average monthly rent in this college town comes in just shy of $1,300. Average healthcare costs are roughly $5,800 a year, below national averages. State's ranking on the 'most expensive' list: 12th Average annual cost of living in state: $86,708 Average annual cost of living in city: $42,655 Woonsocket sits along the Rhode Island-Massachusetts border, about 15 miles north of Providence. Annual healthcare costs around $5,400, and you can expect to pay roughly $530 each month for groceries. Also Find: State's ranking on the 'most expensive' list: 11th Average annual cost of living in state: $86,785 Average annual cost of living in city: $42,706 You'll find the town of East Hartford across the Connecticut River from Hartford, the state capital. Despite its relative cheapness compared to state averages, East Hartford exceeds national averages for groceries ($524 a month), healthcare ($7,021 a year), utilities ($463 a month) and transportation ($6,938 a year). State's ranking on the 'most expensive' list: 10th Average annual cost of living in state: $87,017 Average annual cost of living in city: $43,374 Rochester sits on the eastern edge of New Hampshire, about an hour drive east of Concord. You can save around $40,000 a year living here compared to the state average, but monthly rent will still run you $1,700+ a month. State's ranking on the 'most expensive' list: 9th Average annual cost of living in state: $88,254 Average annual cost of living in city: $35,811 Yakima is a city with about 100,000 residents, located about 150 miles southeast of Seattle in south-central Washington. It's significantly cheaper than Seattle and comes in below national averages for grocery costs (about $500 a month) and healthcare costs ($5,352 a year). Rent in Yakima costs $1,260 a month on average. Read More: State's ranking on the 'most expensive' list: 8th Average annual cost of living in state: $88,408 Average annual cost of living in city: $49,474 Burlington is located in northwestern Vermont along the shore of Lake Champlain. In this list of cheap cities in expensive states, Burlington is second only to Wahiawa, Hawaii, for the highest average monthly rent with costs of $2,031. Burlington also exceeds national averages for grocery costs ($562 a month), healthcare (nearly $8,000 a year), utilities ($433 a month) and transportation ($5,179 a year). State's ranking on the 'most expensive' list: 7th Average annual cost of living in state: $88,563 Average annual cost of living in city: $42,685 Millville is part of the state's South Jersey region. Living here can save you roughly $46,000 a year compared to average state living costs. Monthly rent comes in at $1,638 on average. State's ranking on the 'most expensive' list: 6th Average annual cost of living in state: $89,104 Average annual cost of living in city: $33,347 Located in western Maryland along the Potomac River, Cumberland has about 19,000 residents. Healthcare costs here — about $5,200 a year — are about 84% of the national median. Monthly rent will run you about $1,034. See More: State's ranking on the 'most expensive' list: 5th Average annual cost of living in state: $95,286 Average annual cost of living in city: $31,821 Jamestown sits in southwest New York, about 70 miles southwest of Buffalo. You can find monthly rent here for less than $1,000 (just $913 on average). Your grocery bill will be $480 per month on average. State's ranking on the 'most expensive' list: 4th Average annual cost of living in state: $95,673 Average annual cost of living in city: $46,262 The only state capital to appear in this list, Anchorage offers relatively reasonable average monthly rent costs of around $1,600. Groceries will run you about $617 a month. State's ranking on the 'most expensive' list: 3rd Average annual cost of living in state: $111,901 Average annual cost of living in city: $39,321 You'll find Porterville roughly halfway between Fresno and Bakersfield in the San Joaquin Valley. Porterville's average monthly rent of $1,252 can be tough to find in other parts of the state. Groceries here will cost you just shy of $500 a month, slightly below the national average. Trending Now: State's ranking on the 'most expensive' list: 2nd Average annual cost of living in state: $112,752 Average annual cost of living in city: $33,347 Holyoke is located just north of Springfield in south-central Massachusetts. Monthly rent here will cost you $1,534 on average. You can do well in Holyoke compared to national averages for healthcare ($5,623 a year). State's ranking on the 'most expensive' list: 1st Average annual cost of living in state: $144,436 Average annual cost of living in city: $58,317 Wahiawa is a relatively expensive place to live compared to many other U.S. cities, but consider the delta between living here and living in other parts of Hawaii. Located on the island of Oahu, Wahiawa comes in about $86,000 cheaper for annual living costs than the state average. Rent in Wahiawa still costs $2,221 on average, and groceries will cost you nearly $700 a month. Editor's note: Photos are for representational purposes only and might not reflect the exact locations listed. Methodology: For this piece GOBankingRates looked at the 2,500 largest cities in terms of housing market size, according to Zillow's March 2025 data. With these cities isolated, GOBankingRates found the city with the cheapest 2025 rent and from there found the annual essentials (Rent, Groceries, Utilities, Transportation, and Healthcare) cost of living for these places. Cost-of-living figures were calculated by first finding the annual average expenditure, as sourced from the Bureau of Labor Statistics 2023 Consumer Expenditure Survey and from there used cost-of-living indices sourced from Sperling's Best Places. For ME, ND, and VT the market size was relaxed to 4,000. All data was collected on and is up to date as of May 14, 2025. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 6 Popular SUVs That Aren't Worth the Cost -- and 6 Affordable Alternatives 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses This article originally appeared on Here Are the Cheapest Cities To Live in the Most Expensive States

Yahoo

9 hours ago

Yahoo

Here Are the Cheapest Cities To Live in the Most Expensive States

Even famously expensive states have relatively inexpensive places to live. It's all about knowing where to look. Among the 16 most expensive states (annual living costs of more than $80,000 a year), there are cities where living costs come in tens of thousands of dollars below state averages. The $40,000 to $50,000 range is the most common. Find Out: Learn More: In a recent analysis, GOBankingRates has taken those 16 states and identified the least expensive city in terms of living costs for each. The cities were pulled from Zillow's list of the 2,500 largest U.S. cities, based on housing market size, for March 2025. The threshold was increased to 4,000 for Maine, North Dakota and Vermont. Cost-of-living data was sourced from the Bureau of Labor Statistics and Sperling's BestPlaces. Here's a rundown on the least expensive city in each of these expensive states, along with side-by-side costs. Also see the cost of living in every state. State's ranking on the 'most expensive' list: 16th Average annual cost of living in state: $81,067 Average annual cost of living in city: $36,876 Cedar City is located about 250 miles southwest of Salt Lake City and 170 miles northeast of Las Vegas. Cedar City comes in below the national average for grocery costs, at about $465 a month. Check Out: Also Read: State's ranking on the 'most expensive' list: 15th Average annual cost of living in state: $86,167 Average annual cost of living in city: $39,046 You'll find Sierra Vista about 20 miles north of the U.S.-Mexico border in southeast Arizona. Monthly rent here will cost you about $1,400 on average. Discover More: State's ranking on the 'most expensive' list: 14th Average annual cost of living in state: $86,554 Average annual cost of living in city: $34,981 Klamath Falls is a town of about 22,000 residents, located about 15 miles north of the California border on U.S. Route 97. It comes in below national averages for groceries (97.3% of the average), healthcare (99.6%), utilities (94%) and transportation (68.6%). State's ranking on the 'most expensive' list: 13th Average annual cost of living in state: $86,631 Average annual cost of living in city: $36,531 Waterville is located along the Kennebec River, about 80 miles northeast of Portland, Maine. Average monthly rent in this college town comes in just shy of $1,300. Average healthcare costs are roughly $5,800 a year, below national averages. State's ranking on the 'most expensive' list: 12th Average annual cost of living in state: $86,708 Average annual cost of living in city: $42,655 Woonsocket sits along the Rhode Island-Massachusetts border, about 15 miles north of Providence. Annual healthcare costs around $5,400, and you can expect to pay roughly $530 each month for groceries. Also Find: State's ranking on the 'most expensive' list: 11th Average annual cost of living in state: $86,785 Average annual cost of living in city: $42,706 You'll find the town of East Hartford across the Connecticut River from Hartford, the state capital. Despite its relative cheapness compared to state averages, East Hartford exceeds national averages for groceries ($524 a month), healthcare ($7,021 a year), utilities ($463 a month) and transportation ($6,938 a year). State's ranking on the 'most expensive' list: 10th Average annual cost of living in state: $87,017 Average annual cost of living in city: $43,374 Rochester sits on the eastern edge of New Hampshire, about an hour drive east of Concord. You can save around $40,000 a year living here compared to the state average, but monthly rent will still run you $1,700+ a month. State's ranking on the 'most expensive' list: 9th Average annual cost of living in state: $88,254 Average annual cost of living in city: $35,811 Yakima is a city with about 100,000 residents, located about 150 miles southeast of Seattle in south-central Washington. It's significantly cheaper than Seattle and comes in below national averages for grocery costs (about $500 a month) and healthcare costs ($5,352 a year). Rent in Yakima costs $1,260 a month on average. Read More: State's ranking on the 'most expensive' list: 8th Average annual cost of living in state: $88,408 Average annual cost of living in city: $49,474 Burlington is located in northwestern Vermont along the shore of Lake Champlain. In this list of cheap cities in expensive states, Burlington is second only to Wahiawa, Hawaii, for the highest average monthly rent with costs of $2,031. Burlington also exceeds national averages for grocery costs ($562 a month), healthcare (nearly $8,000 a year), utilities ($433 a month) and transportation ($5,179 a year). State's ranking on the 'most expensive' list: 7th Average annual cost of living in state: $88,563 Average annual cost of living in city: $42,685 Millville is part of the state's South Jersey region. Living here can save you roughly $46,000 a year compared to average state living costs. Monthly rent comes in at $1,638 on average. State's ranking on the 'most expensive' list: 6th Average annual cost of living in state: $89,104 Average annual cost of living in city: $33,347 Located in western Maryland along the Potomac River, Cumberland has about 19,000 residents. Healthcare costs here — about $5,200 a year — are about 84% of the national median. Monthly rent will run you about $1,034. See More: State's ranking on the 'most expensive' list: 5th Average annual cost of living in state: $95,286 Average annual cost of living in city: $31,821 Jamestown sits in southwest New York, about 70 miles southwest of Buffalo. You can find monthly rent here for less than $1,000 (just $913 on average). Your grocery bill will be $480 per month on average. State's ranking on the 'most expensive' list: 4th Average annual cost of living in state: $95,673 Average annual cost of living in city: $46,262 The only state capital to appear in this list, Anchorage offers relatively reasonable average monthly rent costs of around $1,600. Groceries will run you about $617 a month. State's ranking on the 'most expensive' list: 3rd Average annual cost of living in state: $111,901 Average annual cost of living in city: $39,321 You'll find Porterville roughly halfway between Fresno and Bakersfield in the San Joaquin Valley. Porterville's average monthly rent of $1,252 can be tough to find in other parts of the state. Groceries here will cost you just shy of $500 a month, slightly below the national average. Trending Now: State's ranking on the 'most expensive' list: 2nd Average annual cost of living in state: $112,752 Average annual cost of living in city: $33,347 Holyoke is located just north of Springfield in south-central Massachusetts. Monthly rent here will cost you $1,534 on average. You can do well in Holyoke compared to national averages for healthcare ($5,623 a year). State's ranking on the 'most expensive' list: 1st Average annual cost of living in state: $144,436 Average annual cost of living in city: $58,317 Wahiawa is a relatively expensive place to live compared to many other U.S. cities, but consider the delta between living here and living in other parts of Hawaii. Located on the island of Oahu, Wahiawa comes in about $86,000 cheaper for annual living costs than the state average. Rent in Wahiawa still costs $2,221 on average, and groceries will cost you nearly $700 a month. Editor's note: Photos are for representational purposes only and might not reflect the exact locations listed. Methodology: For this piece GOBankingRates looked at the 2,500 largest cities in terms of housing market size, according to Zillow's March 2025 data. With these cities isolated, GOBankingRates found the city with the cheapest 2025 rent and from there found the annual essentials (Rent, Groceries, Utilities, Transportation, and Healthcare) cost of living for these places. Cost-of-living figures were calculated by first finding the annual average expenditure, as sourced from the Bureau of Labor Statistics 2023 Consumer Expenditure Survey and from there used cost-of-living indices sourced from Sperling's Best Places. For ME, ND, and VT the market size was relaxed to 4,000. All data was collected on and is up to date as of May 14, 2025. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 6 Popular SUVs That Aren't Worth the Cost -- and 6 Affordable Alternatives 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses This article originally appeared on Here Are the Cheapest Cities To Live in the Most Expensive States

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How Much You Should Really Be Spending On Rent in 2025 Based on Your Income Bracket

Here Are the Cheapest Cities To Live in the Most Expensive States

Here Are the Cheapest Cities To Live in the Most Expensive States

Map Shows 10 Housing Markets Where Buyers Have More Power

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How Much You Should Really Be Spending On Rent in 2025 Based on Your Income Bracket

Here Are the Cheapest Cities To Live in the Most Expensive States

Here Are the Cheapest Cities To Live in the Most Expensive States

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