How to Plan a Budget for Rent: Frugal Living

When the time comes for you to venture out on your own and take on your own rent, you must first develop a budget that will totally cover your costs for rent.

Worksheet to Plan A Budget For Rent

There are free worksheets available to plan for a budget for rent. When you decide to draft a budget, you should always consider the amount of money you bring in regularly. Also consider how to add the costs of your living expenses. This will determine if you have enough of an income for all of your expenses.

To get your rent budget plan done follow these 3 simple steps:

Step One

Start with getting all your living expenses together and add them to the worksheet.

Step Two

Learn about the ways to SAVE on Rent.

Step Three

Adjust your expenses and focus on saving until it fits the 50/20/30 Rule for Budgeting below compared to your INCOME

These 3 simple steps are explained in detail below. So, Let’s get started…

STEP 1. Add Up Common Rent Expenses

Before you can build a budget for rent, you must gather expense data that you will be responsible for in that apartment or home. You will need to reach out to different utility companies. Also consider the other services needed to quote prices on these expenses. These expenses include both living expenses and additional expenses. Those are not necessary but often associated with renting expenses.

Living Expenses

The essential expenses that must be considered initially when you have a budget for rent include the initial rent cost, electric, gas (if necessary), water, cable, internet, and renters insurance. Certainly, the last three expenses are not as essential as the first four. However, they are necessary for entertainment and security purposes. If you work at home, the cable and internet may even be a necessity for your income.


This expense is the initial and core expense to consider when renting. This expense should remain the same each month unless there was a change in the lease at the time of renewal. When you can’t make your rent payment or find yourself making lots of late payments, you could quickly become evicted or not have your lease renewed. Ensuring that this expense is paid first is essential.


This expense, too, is essential and must be considered a priority. The difference with this expense is that it is based on usage. It can vary from month to month. You should considerate the electricity you are using so that you can keep this expense as small as possible.

Power cable wrapped around one arm.

If gas is necessary to heat your rental property, then it is as essential as electricity. The location you are renting will either be all electricity or a combination of both. When you purchase gas for the property you are renting, you purchase it by the tank size, which can last much longer than a single month. However, depending on how much you order at once, you will need to budget that expense.

Also, if you own a vehicle, purchasing gas is a necessity. You should budget the amount of a tank of gas for your vehicle. Then determine how many days you can use this tank for your daily commute. If a tank of gas will last you two weeks, then you should budget a minimum of two tanks of gas for the month. With gas prices always changing, budget this amount at the highest tank of gas you have purchased in the last three months. It is important to purchase by the tank because budgeting by the dollar amount may not get you as far two months later as it did today.


Water is essential for life. Not only do you need water for personal consumption, but it is necessary for laundry, cleaning, and cooking. This expense is always billed monthly. It has the ability to change depending on how much was consumed during the billing cycle.


Often billed together, these two expenses are more for entertainment purposes and the use of electronics. For some, however, they are a requirement and an expense necessary for budgeting when renting. if you work from home or plan to use the internet to power your electronics, then it is necessary.

Renters Insurance

While renters insurance is not required, it is highly recommended for those who are renting. In the event of a tragedy or natural disaster, an uninsured tenant who has damages to personal items will receive no compensation. The landlord’s policy will only cover the structure of the dwelling. Some landlords require a rental insurance policy to be purchased prior to renting to protect their tenants and avoid confusion at a later time.

Additional Rent Expenses

Additional expenses refer to those that can differ amongst tenants when they are building a budget for rent.

If you have a pet, you will need to include any charges that you receive outside of your standard rent expense. When you begin to plan a budget for rent, make sure that this charge is included.

Some rental properties have garbage included in their utilities. It is not always standard, however. If you live in an area with garbage pickup, you must include this expense into your monthly charge.

While pest control is not mandated for landlords to carry, some do require that their tenants cover a pest control expense. You may decide to opt into this expense yourself if you feel it necessary and it is not provided.

Some properties have parking included in the rental agreement, but others do not, making it an additional expense.

For those renting smaller properties like apartments, they often do not have enough space to store all of their belongings. Because of this, many tenants find themselves needing to rent a monthly storage unit. This is another monthly expense to consider should you find yourself needing this service.

Step 2. Ways to Save on Your Rent

If you are looking to save on your rent, there are several tips you can consider. Especially to minimize living expenses and keep you under budget.

Maintain Your Heating and Cooling Temperature

Since the goal for the electric bill is to keep it as minimal as possible, you should maintain the thermostat to keep your system from being overused when the temperatures change. When it is cooler outside, you should keep the heat lower. When it is warmer, you should keep the air closer to 75. If you keep your apartment super chilly when it is warm and too cozy when it is cold, your system will use a lot of electricity to maintain the desired temperature. It will then raise your electric bill.

Energy Efficient Lightbulbs

Still maintaining that electric bill, you should keep the LED energy efficient light bulbs. They use less energy than standard light bulbs and have proven to keep electric bills lowered.

Cold Water For Laundry

Washing your laundry is a necessity when you rent. If you have an in-house washing machine, you should always wash your clothes on cold water. This help you prevent the electricity from warming water and using unnecessary electricity.

Dryer Balls

If you purchase inexpensive dryer balls, your clothes will dry faster, minimizing use and saving more electricity.

Step 3. The 50/20/30 Rule for Budgeting

When you decide to start a budget, you need to ensure you have additional money for savings and daily purchases. Those going beyond your billed living expenses.

Many in the younger generation are experiencing the budgeting benefits of the 50/20/30 rule. It is a simple and easy way to budget money, ensure bills are paid on time and help you become financial efficient.

The Big 50

First and foremost, fifty percent of your overall income should be set aside for the absolute necessities. Those are mainly living expenses. This category is more than just the scheduled rent check, but the various expenses previously outlined that are associated with living expenses. i.e. water, electricity, and others. These expenses are the same expenses required by anyone who is renting either an apartment or a home. All of these expenses may come to be less than fifty percent of your income, and if so, that is great.

Should these expenses exceed this fifty percent, you may need to consider a different apartment or property to rent. Going over this initial amount will give you a higher risk of over-extending yourself. You would then also risk the change of going over budget. Should you find your income compromised in the future, it will be much harder to stay afloat and get caught up due to high living expenses.

Saving 20

The second part to plan a budget for rent is to take twenty percent and deposit it into savings. It is important to begin your savings immediately if you have not already begun. If you are an hourly employee and find yourself short one month, you will have savings accounts to help you cover your living expenses and keep you from getting behind.

This is the portion of your income that will help you get ahead in your future. Maybe when you decide to purchase a home later, pay for a wedding, or any other major expense that requires a significant amount of savings.

Although you may think it is too soon to think about retirement, it is something that must always be considered. Should you never need your savings for any major purchases, or not need the entire amount, this savings can be used at a later time. Whatever you want to use your savings for. You always need savings in the event of an emergency or lack of employment.

Personal 30

It is understandable that you will want to live a little bit. Whether you want to do some shopping, dining out, or any other expense that is not a necessity. You will have the remaining thirty percent available for these personal purchases. With this portion of your income, you should pay any non-essential monthly subscriptions such as cell phone plans, memberships, and other luxuries that are not essential to your essential living.

Keeping these expenses at or under thirty percent will keep you from over-extending yourself. It will also help you never going over budget. You will then be able to pay down any outstanding debt quicker.

How Much Should Rent Be Based Upon Salary

Now that you know what your expenses are going to be when you build a budget for rent you need to consider if your income is enough. Consider what you should be making in order to afford a particular location or just a general rent. Then you will determine if you need it supplemented in order to afford the expenses.

The initial rent expense itself, in general, should not exceed more than a quarter of your monthly income. When you have to build a budget for rent, you should not be over-extending your income. You have more stability if you have a salaried income where your checks will be equal and disbursed at the same time. If you are basing your income off of tips or hourly wages, you should really consider keeping your budget more on the minimal side, should you encounter a slow month or fewer hours.

Finance Options if You Can’t Make a Rent Payment

If you find yourself in a situation where you are unable to make your rent payments and you need some rental assistance, you have options available to assist you with your rent payment.

Section 8 and other Rental Assistance Programs

There are several government rental assistance programs for your renting needs. Section 8 rentals are agreements made between the landlord and the Public Housing Agencies. When a rental property is designated as Section 8, these landlords have standards and requirements that must be met deeming the property both safe and affordable. In order to determine if you qualify for public housing, you will need to apply for the program. You can do it either online or in person at the agency.

Emergency Loans to Help Pay Rent – 3 available options

If you find yourself in a bind due to less than expected income or emergency expenses, you can always take out a loan for rent. If you need help paying rent, you can take an emergency loan for rent by the following:

  1. Through a personal loan with the bank – If your credit ranges from fair to good, you may be approved for a personal loan from your bank or credit union.
  2. A personal loan with friends or family – When you are counting on a family member or friend and you are comfortable asking for a loan…then this sensitive option available. Here’s how to asking friends and family for a rent loan the right way.
  3. A personal loan with an online lender– If your credit is below average and you have no other source for emergency funds, you can use an online rent lender finder service to assist you with loan offers from online lenders and peer-to-peer lenders.

Final Thoughts

If you are looking to start renting soon, you need to plan a budget for rent with these 3 simple steps.

Make sure that you know all of the expenses that you will be responsible for, as well as the income that you will be using to account for these expenses. When you sit down to develop your budget, always enforce the 50/20/30 rule so that you can keep yourself from going over budget and finding yourself overextended with debt. Once you have calculated this data and know what your budget is, you are ready to begin renting. Should you find yourself in a situation where you need help paying rent or need a loan for rent, there are options available.


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