There are certain expenses everyone deals with no matter how extravagant or restrained their lifestyle. Housing is at the top of the list, both because you need a place to hang your hat and because it’s usually the single largest bite out of your monthly take-home pay.

Unfortunately, this is the most basic and important of expenses. Whether it’s a house, apartment or condo, everyone needs a place to live and this basic expense can quickly become your biggest source of financial stress.

According to a September National Rent Report by Zumper, eight of the 10 most expensive rental markets in the country have either maintained their spot or moved higher on the list, even as prices for one and two-bedroom units dropped slightly for the first time all year. This might sound like business as usual but for employees looking to decrease their financial stress, it’s bad news for their budgets.

Employees can downsize their budgets in many ways, from cutting meals out to limiting their entertainment spending, but housing is a relatively fixed cost and it’s hard to find wiggle room until your lease comes up for renewal. And then, where do you go if rents are rising everywhere you want to be? one staple that has lost most of its wiggle room. If you want to know what your employees are stressed about, housing is one area you can’t ignore.

What’s the fix?

The recommended rule for figuring out how much to budget for housing is to cap it at 30 percent of your income, leaving at least 60 percent of your budget for other expenses like food, healthcare, debt payments and savings. The problem for an increasing number of employees is that these figures have made maintaining this ratio difficult. If employees want to spend under $1,000 each month on rent, for example, they’ll need to look to the 30th most expensive city on this list, downsize the space they live in, move to another neighborhood or find an alternate way to manage rising rent or housing expenses. And until they can make this change, they’ve got less room in their budgets for other necessities.

Changing a housing situation isn’t impossible, but it is a recurring cost people are locked into for months or years at a time, that will affect them every day. If that cost climbs too high, or there is an unexpected jump, it creates a cycle where that cost eats into the rest of their finances, increasing their financial stress and keeping them from making progress with their budgets, debts and retirement savings.

As an employer, you want to help defray this expense but may be at a loss for where to start. There are small  steps you can take, like offering transit assistance for your workers’ commutes or opportunities to work remotely, but the root of the problem is much deeper.  

Employees have to get control over their budgets and learn how they can change their housing situation for the better. For some cities, moving to a new neighborhood may be the only viable option, but it’s one your employees have to discover in order to take action.

If you want to reduce financial stress in your workplace, talk to your employees and see what assistance they need. With the right knowledge and tools, they can decide on a solution that gets them to a stronger financial position. They can’t count on a major drop in their rent (it’s an expense that tends to rise over time), so it’s time to find a new way around this cost and get it back down to the recommended 30 percent threshold.

Whether it’s small changes or a big move, there’s no better time to get started than right now. You’ll be amazed at what a small savings on housing can do for the rest of the monthly bills and, consequently, your employees’ financial stress level.


Dustin Pellegrini is a senior web producer and writer at Think Glink Media, where he specializes in reporting credit and personal finance topics. He studied writing and visual media at Columbia College Chicago.