Housing
The 30% of gross rule fails in expensive cities. Size rent from leftover money after taxes, debt, and a real savings rate.
Updated 2026-09-08 · 8–10 min read
Landlords still quote 30% of gross. A $78,000 salary is closer to $4,700–$5,100 take-home after FICA, federal withholding, and a 6% 401(k). Thirty percent of gross is $1,950; thirty percent of take-home is $1,400–$1,530.
If you also carry a car note or student loans, 30% of gross can leave a $200 savings line that dies the first month a tire fails.
Write take-home. Subtract a savings rate you will actually keep (15% is a serious floor). Subtract minimum debt, transit, groceries, insurance, and a sinking fund. What remains is the rent-plus-utilities envelope.
Utilities, parking, and renter’s insurance belong in the envelope. A $1,900 unit with $180 utilities is a $2,080 housing decision.
A commute cut that saves 90 minutes a day can justify higher rent if you still fund the 401(k) match. Do not stretch for a second bedroom you will use as a closet.
Keep two months of full rent in a HYSA before you sign if income is commission or a single earner household.
Run the numbers: rent affordability calculator · rent vs buy (All Access).
It is a screening number, not a budget. In high-cost metros, run leftover money after a 15% savings rate instead.
Take-home. Gross hides FICA, 401(k), and health premiums.
Only the share you actually pay, including utilities. Keep one month of full rent if you depend on them.
Educational only. Verify IRS limits and loan quotes before acting.