How to Know if I'm Paying Too Much Rent

It's probably safe to say that rent is taking a large bite out of your paycheck. Because it's such a big expense, you need to know if you're getting a good deal. While government and financial experts offer guidelines for how much your monthly rent should cost, how much is too much depends on your location and finances.

Most Americans can afford to spend 30% of their income on housing costs and have enough left for other expenses, the U.S. Census Bureau says. About half the nation's renters fall into that group. Those who pay 50% or more of their income on housing expenses are considered to have a severe housing cost burden. If you spend more than 30% of your income on rent and utilities, you run the risk of having less income flexibility.

Although the government's 30% rule has become a standard in housing affordability, that isn't always the ideal situation. Financial planner Stacey Osborne suggests keeping rent costs below 25% of income and all mandatory expenses below 50%, Internet site realestate.aol.com says. That helps families be prepared for financial upsets and spend money on other things without going through each check before it's even deposited. If you have very little cash left at the end of each month and rent is one of your biggest bills, you might be spending more than your finances allow.

Rents vary drastically by location. Although CBSNews.com's MoneyWatch page recently noted that the average U.S. monthly rent was just over $1,200, it was three times that amount in the country's 10 priciest cities and ran as high as $4,000 in some spots. Determine if you're paying too much for your area by comparing your costs to those in your neighborhood. Scour the classified ads or use an online service like Rentometer.com, which allows you to compare rents in your area. If you're paying too much it could be time to move or to ask your landlord for a rent reduction.

Even if your rent is on the low side, you could still be paying too much if your living situation leaves you stressed or frustrated. For example, if your landlord doesn't fix problems quickly, you have pests or the conditions are unsafe, your rent is probably too high. You can't put a price on peace of mind, so paying a little more may be worthwhile if conditions in your rental are less than desirable.