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1 in 4 Renters is Severely Cost-Burdened, 50% of more of their Income on Rent
- closeparen 9y agoI spend 50% of my income on rent. I am not cost burdened in any meaningful sense: the remaining 50% is more than enough to live on (just not enough to buy a condo with). It would be more interesting to know the absolute dollar amounts people have after taxes and rent, rather than the percentage spent.
- bootsz 9y agoAgree, especially since many other costs tend to be more fixed (or at least grow fairly slowly as a function of income). In this case % of income doesn't seem to be a super helpful metric.
- jgalt212 9y agoBaumol cost disease is relevant here. Rent, education and healthcare all continue to go up. All else goes down. https://en.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.wikipedia.org/wiki/Baumol%27s_cost_disease
- 5706906c06c 9y agoGuessing no wife or kids?
- deleted 9y ago[deleted]
- goodoldboys 9y agoI think savings rate is much better suited as a primary percentage-based metric to track on to see how people are doing. For those who have low to 0 savings rates, we can then look at why that is - and most the most likely case would be high housing costs. _Those_ people are burdened, whereas you are not (I'm assuming you are able to save).
- closeparen 9y agoI think that depends on the goal you’re saving towards. Mortgage down payments, college tuition, etc. aren’t that dependent on your income - saving 80% of a low income is likely worse than saving 10% of a high income.
- stadeschuldt 9y agoWhen I was young I have been told that your rent should not more than 1/3 of your income. This was meant as a rule of thumb. Also this would apply for the majority of people. If you make 10 million a year and pay 5 million on rent you probably still have enough left to get by.
- EliRivers 9y agoI still run into (elderly) people who expect a mortgage to be about three to four times a person's salary. When the houses costs eleven times the median salary, that would require a deposit of seven times a person's salary. The past was a different (cheaper) world when it came to the largest expense most people have.
- megaman22 9y ago> I still run into (elderly) people who expect a mortgage to be about three to four times a person's salary I'd argue that's still a reasonable target, most places in the US. The pockets where things are insanely, insanely expensive are smaller than you might think - especially if you spend time reading the comments here on these kinds of articles.
- EADGBE 9y agoNot necessarily true, we've all heard about rock stars and movie stars seemingly blowing through millions. You gotta budget; and if you can't make more than you spend you're going to have a bad time. We'd think blowing through 5m a year would be hard, but I'd bet there's people out there doing it every day.
- Sohcahtoa82 9y agoWithout blowing it on drugs, gambling, cars, housing, or ridiculously priced hotels, I don't know how I'd spend $5 mil a year. That's about $13,700 per day.
- EADGBE 9y ago
- bootsz 9y agoIs it safe to assume that they are defining "income" as "after-tax income"?
- notfromhere 9y agoTake home. Otherwise, using gross pay doesn't really mean much since tax rates are so individualized
- foxyv 9y agoLow-Rent, No Jobs - Pick one