What percentage of your income do you spend on housing?

[bhanson]

For those of you floating around 50% of your income (NET OR GROSS) for housing and thinking it's okay, you need to read some personal finance blogs.

It's a disaster waiting to happen.

(With possible exceptions for those intelligent, ambitious few living in the most expensive cities in our nation: NYC, etc.)

At my base rate of pay I spend less than 20% of my NET income on housing, any extra overtime just brings this number down. This is while going to school full time, where as after I finish my degree my income will more than double. If I choose to keep the same standard of living nothing says financial security more than a housing payment of less than 10% of your NET income.

A good financial health measurement tool is to ask yourself: If I lost half of my income today, could I still pay all of my bills without any problems?

If you answer yes, then you're in a very stable position. If you answer is no, then you're wrong and should work on fixing it.

 

[Eli]

What I find surprising is the relatively small amounts between peoples net & gross income. 3% differences? Really?

I lose that in state taxes alone.

Our combined net income is ~$3500/mo, gross is 4400/mo.

Rent is 850.

850/4400 = 19%
850/3500 = 24%

Guess my initial figures were a little off, but yeah.

 

[Bignate603]

Our combined net income is ~$3500/mo, gross is 4400/mo.

Rent is 850.

850/4400 = 19%
850/3500 = 24%

Guess my initial figures were a little off, but yeah.

Only a $900 difference between gross and net income? Are you only doing tax or are you including any other deductions?

My income is similar to yours but if I include all my other payroll deductions (including health care, life insurance, retirement and taxes) I'm looking at something closer to a $1400 difference between net and gross.

 

[Siddhartha]

~25%, of my net income, which is amazing for the a decent place in Northeast.

 

[KentState]

I'm assuming KentState's guess is way wrong. I pay about 14% of my gross, which turns into almost 25% of my net after 401k and IRA deductions.

I was doing simple math. Basically I took our actual income time 75% to give me net income. At my income, I get a little less per paycheck and she gets a little more.

For example, $150,000 total gross with $1,500 ($18,000) rent is 12%. $150,000 * 75% = $112,500 net with rent of $1,500 ($18,000) is 16%. Even if we only keep 70% of our gross, it's right around 17%. So, I'm off by a few percent at most. Now, if I was pay the $1500 towards a loan, I would be reducing my taxable income by around $11,000/year. Factor that in, and the percent would shrink as well.

In your example, we would be taking home only 50% of our gross to get 24%.

 

[KentState]

What I find surprising is the relatively small amounts between peoples net & gross income. 3% differences? Really?

I lose that in state taxes alone.

If you made $1,000,000,000 a year for example, and had rent of $12,000,000 a year, the difference between 0% and 50% tax is 1.2% to 2.4% for housing.

 

[AdamK47]

Mortage + Utilities =
19.1% net
13.4% gross

 

[Eli]

Only a $900 difference between gross and net income? Are you only doing tax or are you including any other deductions?

My income is similar to yours but if I include all my other payroll deductions (including health care, life insurance, retirement and taxes) I'm looking at something closer to a $1400 difference between net and gross.

Taxes are our only deductions as of now. Health insurance through my company is outrageous, and she just started working at her new job so doesn't have benefits yet.

 

[KillerCharlie]

Unfortunately here just simple 2 bedroom apartments run at least $1000/month. When I buy a place it will be something more like $1500/month just for the mortgage. Even though I make decent money it'll still be at least 30%-40%.

Just think though - if you make $70k that's just over $4k take home per month. Just a simple 2 bedroom apartment with 1000 sq ft would be 25%.

 

[Slew Foot]

I bet none of you guys posting live in the bay area CA.

 

[zoiks]

I bet none of you guys posting live in the bay area CA.

I live in the bay area. I posted mine above.
But for working professionals, the pay here is considerably better than the rest of the country save for a few places.

 

[Red Squirrel]

For those of you floating around 50% of your income (NET OR GROSS) for housing and thinking it's okay, you need to read some personal finance blogs.

It's a disaster waiting to happen.

(With possible exceptions for those intelligent, ambitious few living in the most expensive cities in our nation: NYC, etc.)

At my base rate of pay I spend less than 20% of my NET income on housing, any extra overtime just brings this number down. This is while going to school full time, where as after I finish my degree my income will more than double. If I choose to keep the same standard of living nothing says financial security more than a housing payment of less than 10% of your NET income.

A good financial health measurement tool is to ask yourself: If I lost half of my income today, could I still pay all of my bills without any problems?

If you answer yes, then you're in a very stable position. If you answer is no, then you're wrong and should work on fixing it.

The problem is, not everybody makes 500k or more per year. You just need a plan. If you lose your income then you find another job. It's good to try to have about 6 months of emergency funds in case you do lose your job. Also it's not smart to go buy a house if your job is contract based. Try to get a solid job first.

About 60% of my income goes towards living (well only counting constant bills and what not, not groceries and such) and I'm doing just fine. If it was only 10% then that would be awesome, I'd pretty much be done all the house projects I want to do by now. Heck with that much spare cash I could build a 20 story office building and rent it out or something. They say you need money to make money, well with that much spare money there is lot of money to be made if it's invested properly. I don't ever see myself in that position, that's more or less a dream. In fact when I get my raise I'll probably just put a bit more money on the mortgage every month.

 

[Chaotic42]

0% on "housing". Maybe 3-5% on all ordinary living costs.

Why is housing in quotes? Do you live on the street or something? I'm at about 27% of my gross income. My $2700/yr insurance isn't helping much.

 

[dawks]

Your GDSR (gross debt service ratio) which includes all mortgage related debt payments, including the loan payments, heating costs, property taxes, and condo fees should not exceed 32%. If you want to stay safe. 50% is ridiculous. Its time to move to a cheaper place or get a better job. You'll never be able to save enough for retirement and live comfortably and safely.

 

[FelixDeCat]

None.

 

[tontod]

I pay ~40% of my take home pay, but I live in Boston. That accounts for property taxes in addition to the principal/interest.

 

[DrPizza]

taxes, insurance, mortgage, electric, coal, propane, oil add up to about 10% of gross.

 

[JimmiG]

Around 55% if you count student loans as income, maybe 65% including electricity, TV, Internet, home insurance etc. The rest of my "income" goes to travel card, food etc., leaving about 0% for leisure activities

If I get a job in this town after I'm done studying, I'm probably staying in the same apartment. The rent is $690 which is good for an 800sq.ft., 2 bedroom apartment. With a proper job it will be at most 30% or less of my net income.

 

[Bignate603]

Around 55% if you count student loans as income, maybe 65% including electricity, TV, Internet etc. The rest of my "income" goes to travel card, food etc., leaving about 0% for leisure activities

For a college student that's living off loans that's about right. There's still plenty of morons that live the high life off of borrowed money while in college. 4 years of fun and a lifetime paying for it.

 

[datalink7]

For those of you floating around 50% of your income (NET OR GROSS) for housing and thinking it's okay, you need to read some personal finance blogs.

It's a disaster waiting to happen.

(With possible exceptions for those intelligent, ambitious few living in the most expensive cities in our nation: NYC, etc.)

At my base rate of pay I spend less than 20% of my NET income on housing, any extra overtime just brings this number down. This is while going to school full time, where as after I finish my degree my income will more than double. If I choose to keep the same standard of living nothing says financial security more than a housing payment of less than 10% of your NET income.

A good financial health measurement tool is to ask yourself: If I lost half of my income today, could I still pay all of my bills without any problems?

If you answer yes, then you're in a very stable position. If you answer is no, then you're wrong and should work on fixing it.

I'm at 50% right now and I am pretty sure I'm fine. Though actually 10% of that is extra I'm putting in my mortgage every month so really I guess I should say 40%.

I have no other bills and a decent savings built up (I could pay everything and survive for about 4 months on no income).

It was about the only choice for my area and I didn't want to do the rent thing any more and felt I could afford my property.

 

[JimmiG]

For a college student that's living off loans that's about right. There's still plenty of morons that live the high life off of borrowed money while in college. 4 years of fun and a lifetime paying for it.

Well I really wish I had a smaller, cheaper apartment while studying, but since I will graduate in about 1.5 years I really don't want to move to some small, crappy apartment, only to get a bigger one again when I start working. So I just cut down on other expenses and I break even Plus I can always rent out a room if things go bad.

 

[CoinOperatedBoy]

Glad to see the ATOT Accounting Team is out in force.

 

[Chaotic42]

For those of you floating around 50% of your income (NET OR GROSS) for housing and thinking it's okay, you need to read some personal finance blogs.

It's a disaster waiting to happen.

(With possible exceptions for those intelligent, ambitious few living in the most expensive cities in our nation: NYC, etc.)

At my base rate of pay I spend less than 20% of my NET income on housing, any extra overtime just brings this number down. This is while going to school full time, where as after I finish my degree my income will more than double. If I choose to keep the same standard of living nothing says financial security more than a housing payment of less than 10% of your NET income.

A good financial health measurement tool is to ask yourself: If I lost half of my income today, could I still pay all of my bills without any problems?

If you answer yes, then you're in a very stable position. If you answer is no, then you're wrong and should work on fixing it.

I agree that this is ideal, but it would be almost impossible for most people to live with your numbers. An acceptable apartment here in Southern Mississippi is about $800/mo, which is about what a mortgage would be. By your numbers, you'd have to be bringing home $4,000/mo down here now as a college student. That's impossible here unless you start some kind of hot business.

So do you mind if I ask what you do now, what you're studying, what you're going to do when you graduate, and where you live?

 

[meltdown75]

cheese and rice... a lot of you dudes must make killer coin.

i estimate my living expenses (everything) to be about 40% of my income

that includes mortgage, bills, food, and everything that isn't frivolous spending or entertainment money.

 

[Zebo]

50% I try not to make much - too much taxes.

computers in sig are company owned and used for work exclusively I can't afford such things.