Is Rent Eating Your Budget? Manage Costs in 2025

Rising rents across Canada have a lot of people wondering, “How much should I really be spending on rent?” If your rent feels like it’s taking over your budget, you’re definitely not alone.

In cities like Toronto and Vancouver, average rents are higher than ever — and staying on top of your finances can feel like a full-time job.

The good news? Even in today’s market, there are ways to regain control. Whether you’re adjusting your spending, reworking your budget, or looking for support with debt, figuring out how much of your salary should go to rent is a great place to start.

Book your free budget consultation today and take the first step toward more breathing room in your finances.

How Much Should You Spend on Rent in 2025?

We’ve all heard about how expensive rent has gotten and, sadly, the numbers back it up. Over the last few years, rent prices in Canada have gone up significantly, especially in major cities. So, how much is too much?

You might’ve come across the “30% rule.” It’s this idea that you shouldn’t spend more than 30% of your gross (before tax) income on housing, including rent and utilities. For example, if you earn $4,000/month before tax, it’s recommended you don’t spend more than $1,200 on housing.

Sounds good in theory, right? But in practice, it’s not so simple.

In cities like Toronto, average rents now top $2,200 a month for a one-bedroom. That means sticking to 30% just isn’t realistic for a lot of people.

Here’s the thing: following one “rule” doesn’t always make sense. These types of guidelines don’t always get the full picture, like if you’re saving money elsewhere. For instance, maybe your rent is higher, but you’re walking to work instead of paying for gas or transit. That could still be a smart trade-off.

When it comes to what percentage of income should go to rent, the real answer depends on you: your income, your lifestyle, and your financial goals.

Why a Budget Matters for Rent in Canada

Instead of aiming for a “perfect” percentage, it’s more helpful to look at how your rent fits into your overall financial situation.

If you can comfortably pay your rent, stay out of debt, and put a little into savings each month — even if you’re spending more than 30% on rent — you might be in a solid place.

A budget helps you see that bigger picture. It lets you line up your rent with your priorities and your goals. In 2025, many people find that spending 20% to 40% of their income on rent is more realistic, depending on where they live and what other expenses they have.

When you’re asking, “how much of my salary should go to rent?” — having a budget gives you the clearest answer.

Create a Budget to Manage Rent Costs

If you don’t have a budget yet, now’s the time to build one. It doesn’t have to be complicated: just a clear outline of what’s coming in, what’s going out, and where your money is really going.

Start by figuring out how much you earn each month. If your income varies, take an average and use that to build your plan. When you make more in a given month, try to set some aside to cover months when income is lower.

Then write down your expenses. Some, like rent, are fixed costs (they stay the same each month). Others are variable, like groceries or entertainment, which can change on a month-by-month basis (and can usually be adjusted).

Make sure to include:

• Debt repayments, like credit cards, car loans, or lines of credit
• Savings, especially for emergencies or surprise expenses

Once everything is listed, compare your total expenses to your income. Can you cover your bills, stay out of debt, and still set something aside? If yes, you’re on the right track.

And if you need help keeping track, apps like Mint, You Need a Budget (YNAB), or even a basic spreadsheet can help you stay organized.

Adjust Your Budget for Rent in 2025

If your budget feels too tight or things just aren’t adding up, it might be time to make a few changes to save where you can.

And you can always start small by:

• Cooking at home a little more and cutting back on takeout
• Cancelling any unused subscriptions or services
• Revisiting your phone, internet, or insurance plans (you might find a better deal elsewhere)
• Try the envelop saving method to encourage more saving and less spending

Even saving $50 to $100 here and there can add up quickly. The goal isn’t to cut everything — it’s to prioritize what matters most and find ways to make your rent more manageable.

Get Help with Rent and Debt in Canada

If rent is pushing your finances into the red — or if you’re using credit cards or payday loans just to stay afloat — it may be time to talk to someone.

A Licensed Insolvency Trustee (LIT) can help you review your financial situation and explore options like budgeting help, debt consolidation, or even a consumer proposal. And consultations are free.

Struggling to figure out how much you should spend on rent and how to balance everything else? You’re not alone, and there are solutions.

Book a free consultation with Farber today and let’s get you back on track.