This glossary defines over 30 financial and expense-splitting terms you will encounter when dividing rent, bills, and shared costs with roommates, partners, or co-parents. Each definition explains the concept in plain language and links to a free SplitGenius calculator where you can apply it to your own situation. Whether you are looking up the 30% rule, trying to understand debt-to-income ratio, or learning about net effective rent, you will find a clear answer below.
A widely used guideline stating that your monthly rent should not exceed 30% of your gross monthly income. For someone earning $5,000 per month, the 30% rule suggests a maximum rent of $1,500. While useful as a starting point, the rule does not account for city-specific cost of living, existing debt, or individual financial goals.
Try Rent Affordability CalculatorA landlord qualification standard requiring your annual salary to be at least 40 times the monthly rent. For a $2,000/month apartment, you would need an annual income of at least $80,000. This rule is stricter than the 3x monthly income rule (which equals 36x annually) and is especially common among landlords in New York City.
Try Rent to Income CalculatorThe number of years after which the total cost of buying a home becomes less expensive than renting, factoring in mortgage payments, property taxes, maintenance, home appreciation, and equity built. Break-even points typically range from 3 to 7 years depending on local market conditions, mortgage rates, and home price appreciation.
Try Rent vs Buy CalculatorShared costs related to raising a child between separated or divorced parents, including education, healthcare, childcare, extracurricular activities, and clothing. These expenses are typically split using income-proportional, equal, custody-based, or hybrid methods, separate from any court-ordered child support payments.
Try Co-Parenting Expense CalculatorA numerical score that compares the relative expense of living in one area versus a national baseline (typically 100). A city with an index of 150 is 50% more expensive than average. The index accounts for housing, groceries, utilities, transportation, and healthcare, and is used to adjust rent affordability calculations for different markets.
Try Rent Affordability CalculatorThe percentage of your gross monthly income that goes toward paying monthly debt obligations, calculated as (Total Monthly Debts / Gross Monthly Income) x 100. Landlords typically require a DTI below 36-40% including rent. A DTI under 28% is considered excellent for rental qualification, while anything above 43% makes approval difficult.
Try DTI CalculatorA bill or expense division method where the total amount is divided evenly among all participants, regardless of what each person ordered or consumed. Equal splitting is the simplest approach and works well when everyone spent roughly the same amount, but can feel unfair when individual orders or usage vary significantly.
Try Bill Split CalculatorThe ownership percentage each partner holds in a business, determined by factors such as capital invested, time contributed, expertise provided, and the origination of the business idea. An equity split dictates each partner's share of profits, voting rights, and proceeds from a future sale. It is distinct from a profit split, which governs the distribution of ongoing earnings.
Try Business Profit Split CalculatorA metric ranging from 0 to 100 that measures how equitable a rent or expense split is compared to a mathematically fair distribution. A score of 90 or above indicates an excellent split, while a score below 50 signals that one or more participants are significantly overpaying. SplitGenius calculates Fairness Scores using weighted factors like room size, features, and income.
Try Rent Split CalculatorYour total earnings before taxes, insurance premiums, retirement contributions, and other deductions are subtracted. Gross income is the figure landlords use when applying the 30% rule or 40x rule for rental qualification. It includes salary, wages, bonuses, freelance income, and other regular sources of earnings.
Try Rent Affordability CalculatorA rent division method that combines per-room and per-person splitting. Private spaces (bedrooms) are divided by room, while shared spaces (living room, kitchen, bathrooms) are divided per person. This approach is commonly used when a couple shares a room with single roommates, and typically results in the couple paying 15-25% more than a single occupant.
Try Couple vs Roommate CalculatorA rent splitting method that divides housing costs proportionally to each person's income. If one roommate earns 60% of the household's combined income, they pay 60% of the rent. This method is popular among couples with different salaries and ensures no one is disproportionately burdened relative to their earning power.
Try Rent Split CalculatorA fee charged by a landlord when a tenant terminates a lease before the agreed-upon end date. Penalties typically range from one to three months' rent and may also include forfeiture of the security deposit and liability for rent until a new tenant is found. Some states cap early termination fees by law, and certain circumstances (military deployment, uninhabitable conditions) may waive them entirely.
Try Lease Break Cost CalculatorA childcare arrangement where two or more families hire a single nanny to care for their children together, splitting the cost. Each family typically pays 25-35% less than they would for an individual nanny, while the nanny earns 10-20% more per hour due to the increased workload. Costs are usually divided by the number of children each family has.
Try Nanny Share CalculatorThe true average monthly cost of an apartment after factoring in concessions like free months, waived broker fees, or move-in specials. Calculated as total rent paid over the lease term divided by the number of months. A $3,000/month apartment with 2 months free on a 12-month lease has a net effective rent of $2,500/month.
Try Net Effective Rent CalculatorYour take-home pay after all deductions, including federal and state taxes, Social Security, Medicare, health insurance premiums, and retirement contributions. Net income is the amount actually deposited into your bank account and represents what you have available to budget for rent, bills, savings, and discretionary spending.
Try Renter Budget CalculatorA rent division method where the total rent is divided by the number of people living in the unit, regardless of room assignments. In a three-person household, each person pays one-third. This method charges a couple in one room twice as much as a single occupant, which many consider unfair since the couple shares a single private space.
Try Couple vs Roommate CalculatorA rent division method where the total rent is divided by the number of bedrooms, and each bedroom's occupants split that room's portion among themselves. In a two-bedroom apartment, each room pays half the rent. A couple sharing one room would each pay a quarter of total rent. This method can undercharge rooms with multiple occupants for shared-space usage.
Try Couple vs Roommate CalculatorA partial month's rent calculated for the exact number of days a tenant occupies the unit during that month. Prorated rent is calculated as (Monthly Rent / Days in Period) x Days Occupied. Moving in on the 15th of a 30-day month at $1,500/month means paying $800 in prorated rent for the remaining 16 days.
Try Prorated Rent CalculatorA bill or expense division method where each person's share is based on their individual consumption or order total rather than an even division. If you ordered 40% of the food at a restaurant, you pay 40% of the bill including your proportional share of tax and tip. This is considered fairer than equal splitting when spending varies significantly.
Try Bill Split CalculatorA measure of how much of a household's income goes toward rent. A household is considered "rent-burdened" when rent exceeds 30% of gross income and "severely rent-burdened" when it exceeds 50%. As of recent data, approximately half of all renters in the United States are rent-burdened, with the problem most acute in high-cost coastal cities.
Try Rent Affordability CalculatorGovernment regulations that limit how much a landlord can increase rent, typically capping annual increases at 3-10% or tying them to the Consumer Price Index. Rent control laws vary widely by state and city, with strong protections in places like New York City, San Francisco, and Los Angeles. Not all units are covered, and exemptions often apply to newer buildings.
Try Rent Increase CalculatorThe percentage of gross income spent on rent, calculated as (Monthly Rent / Gross Monthly Income) x 100. Financial advisors recommend keeping this ratio at or below 30%. Landlords use it as a qualification metric, often requiring applicants to demonstrate an income of 3x the monthly rent (a ratio of 33% or less).
Try Rent to Income CalculatorAn insurance policy that covers a renter's personal belongings against theft, fire, and certain types of damage, along with liability protection if someone is injured in the unit, and additional living expenses if the unit becomes uninhabitable. Policies typically cost $15-30 per month and are often required by landlords. Joint policies cover all named tenants, while individual policies cover only the policyholder.
Try Renters Insurance CalculatorA refundable payment made to a landlord at the start of a lease, held as protection against unpaid rent or property damage. Deposits typically equal one to two months' rent, though many states cap the maximum amount. The deposit is returned at lease end minus any legitimate deductions for damage beyond normal wear and tear.
Try Security Deposit CalculatorThe process of resolving all outstanding debts within a group after shared expenses, such as at the end of a trip. An optimized settlement minimizes the number of individual payments needed to make everyone whole. A group of five people might need only three or four payments instead of ten or more when debts are consolidated and netted against each other.
Try Trip Expense SplitterA rent splitting approach that divides the total rent proportionally based on the square footage of each bedroom. A 150-square-foot room would cost more than a 100-square-foot room in the same apartment. This method is objective and measurable, though it does not account for other room features like private bathrooms, natural light, or closet size.
Try Rent Split CalculatorAn arrangement where a current tenant rents out their unit (or a portion of it) to a third party for part or all of the remaining lease term. The original tenant remains legally responsible for the lease. Subleasing can be a lower-cost alternative to breaking a lease, though it typically requires written landlord approval and may involve fees.
Try Lease Break Cost CalculatorA non-monetary contribution to a business measured in time, effort, and expertise rather than capital investment. A founder who contributes 60 hours per week of work but invests no money earns sweat equity. In profit-splitting calculations, sweat equity is weighed against financial capital to determine each partner's fair ownership share.
Try Business Profit Split CalculatorThe total monthly expense of an apartment when all costs beyond base rent are included: utilities, internet, renters insurance, parking, laundry, commute costs, pet fees, and amenity fees. Hidden costs typically add 30-60% on top of the listed rent. A $1,500/month apartment may truly cost $2,000-2,400/month when every expense is accounted for.
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