Just wondering

6/4/2013 9:45:01 AM

Yes

I'm Krallum and I approved this message.

6/4/2013 9:48:18 AM

all of it

[Edited on June 4, 2013 at 9:52 AM. Reason : or at least enough to pay it]

6/4/2013 9:52:18 AM

depends on where it is... if you live in a good, walkable, sustainable area then it can be more as you will save money/time by not having to drive to every damn thing. If you have to drive all the time then they usually say around 30% of your income

6/4/2013 9:52:19 AM

50% to necessities (rent/mortgage, elec, car payment, insurance, basic groceries, etc)
20% to savings/debt
30% to luxuries (cable, dining out/bars, shopping, etc)

[Edited on June 4, 2013 at 10:02 AM. Reason : .]

6/4/2013 10:02:13 AM

I shoot for 20-30% going solely to rent

6/4/2013 11:05:36 AM

I'd say 33% would be a good spot.

6/4/2013 11:43:07 AM

I've always heard the 1/3rd rule as well.

6/4/2013 11:58:45 AM

$3,000.

6/4/2013 12:03:07 PM

I've heard 1/3 but including all your utilities

6/4/2013 12:05:15 PM

Why would you want to pay 1/3 of what you make on rent? What logic is there behind not paying as little as possible?

I'm Krallum and I approved this message.

6/4/2013 12:17:28 PM

None. It should go towards your mortgage

6/4/2013 12:18:16 PM

As little as possible to meet your reasonable location, safety, and amenities requirements. I don't like generic fractions and the like when talking about budgets as they are completely arbitrary. You kind of either understand what you can afford or you don't.

We worked backwards from our other expenses and estimated expenses. We looked at maxing retirement accounts, funding other investment accounts, how much we spend for food, vacations, gas, utilities etc. and looked at what we had left over basically as the absolute maximum we could spend each month. We ultimately didn't spend that much of course, but it gave us our own maximum, regardless of what the bank was going to loan (which was much more than I wanted to spend).

[Edited on June 4, 2013 at 12:41 PM. Reason : ]

6/4/2013 12:27:09 PM

The traditional rule is no more than a third. I've heard of agencies using that as a qualification criterion also (though they're probably using a third of gross income, which is of course misleading).

Realistically, it depends on your priorities and your location. Write down your monthly necessities (groceries, utilities, insurance, car payment, etc). Then estimate variable amounts that are either required (paying down debt) or important to you (savings, dining out, travel, etc.). See how much you have left. Know you don't have to use 100% of that, but you've located your top end.

6/4/2013 12:41:23 PM

Yep, I see you pretty much wrote what I did (after my edit on my post. I didn't see your post first). To me, that's the only logical way to do it. I could see potentially comparing what % others actually are spending as some sort of general, big-picture litmus test, but I wouldn't use it to determine how much you should be or could be spending.

[Edited on June 4, 2013 at 12:43 PM. Reason : ]

6/4/2013 12:42:14 PM

Quote :

"None. It should go towards your mortgage "

Buying a home isn't the right decision for everyone.

6/4/2013 12:42:28 PM

You can get a mortgage up to 45% debt-to-income %, traditionally the guideline was 28% max debt toward housing, 36% max debt total


In some areas it is going to be really hard to rent for less than 1/3 of your income.

6/4/2013 1:26:10 PM

The correct question to ask yourself is:

Quote :

"How much of my income can I put in my 401K/Roth and still live comfortably?"

6/4/2013 6:55:23 PM