4 ms·

I'm with you on all of these except the mortgage/rent payment. 25% should be the goal IMO. I know it can be tough, especially at lower income levels. My solutio

I'm with you on all of these except the mortgage/rent payment. 25% should be the goal IMO. I know it can be tough, especially at lower income levels. My solution for that is, if your income can't afford it then you need roommates.

jimmaswell 4y ago
The housing market is cooling somewhat, but 25% is still pretty hard to hit today unless you're a high earner in a low COL area. I'm at 26% take home doing WFH in rural New Hampshire. Likely not practical if you live anywhere more urban than that. Rent or mortgage up to 50-60% is more common today.
deleted 4y ago
[deleted]
fuckstick 4y ago
> mortgage/rent payment These are not the same at all. > 25% should be the goal I think 70% should be the goal - why? Because I pulled it out of my ass. Do you have a sound financial explanation for this benchmark, because it sounds like arbitrary dick sizing. 60% of income on a mortgage in a relatively stable area without insane property taxes is likely a very prudent allocation of income, since you both have a good investment and a place to live. Spending 60% or even more of income on a mortgage may well be better than 25% on rent. Another thing, 25% of income is very different at $30k then it is at $300k. This is something the budding personal finance advisor should understand. > then you need roommates Is that what you’re going to tell people in their 30s with kids?
- bombcar 4y ago
  > Is that what you’re going to tell people in their 30s with kids? Kids are just roommates that never help with the rent. ;)
- mattw2121 4y ago
  Yes, if you are in your 30's with kids and not making enough to afford your bills, you need more jobs, higher paying jobs, or roommates.
  - fuckstick 4y ago
    > Yes, if you are in your 30's with kids and not making enough to afford your bills, you need more jobs, higher paying jobs, or roommates. To meet some arbitrary 25% income metric - no thanks. Notice you said nothing about “afford your bills” previously - but you have some very unsubstantiated definition for afford. The idea that one should automatically consider roommates if they can’t keep housing below 25% of income is asinine. Meanwhile still waiting for the derivation of “25%” in the first place.
    - mattw2121 4y ago
      I'm not going to break down an entire budget for someone living on 40-50k, but if they are spending more than 25-30% on rent/mortgage they will have a real hard time making utilities, food, car, insurance, etc work.
      - fuckstick 4y ago
        > rent/mortgage Again with that clueless equivocation. > 40-50k, but if they are spending more than 25-30% on rent/mortgage they will have a real hard time making utilities, food, car, insurance, etc work. And yet millions of families in the US alone are literally making this work. So that’s nonsense. I have literally lived this. There is no goddamn reason spending more than 50% of your income to own a nice home in a good location is necessarily a bad allocation - there are far worse. It’s not for everybody but it isn’t inherently irresponsible. So what value does an arbitrary rule like 25% have - especially considering differences in absolute income - none whatsoever. Finding suitable roommates is also not something anywhere near as easy as you make it sound. Have a nice day. I know I’m not going to stop you spewing your inane life advice.
        4y ago
bombcar 4y ago
What happened is the banks had a rule "total debt payments cannot be over 30%" years and years ago, based on their understanding of many customers and bankruptcies and such. Over time this became "spend 30% on housing" which, if you think about it, is kinda insane. It's obviously a rule of thumb that doesn't fit directly to everyone (should Musk spend $720 million a year on housing? Should you buy a new house every time you get a raise/change jobs?). It's like the "renting is throwing away money" - it's a marketing tagline that has become gospel truth somehow. There are times for renting and times for buying and each situation should be evaluated to the best of your ability with the knowledge you have.

jimmaswell 4y ago

The housing market is cooling somewhat, but 25% is still pretty hard to hit today unless you're a high earner in a low COL area. I'm at 26% take home doing WFH in rural New Hampshire. Likely not practical if you live anywhere more urban than that. Rent or mortgage up to 50-60% is more common today.

deleted 4y ago

[deleted]

fuckstick 4y ago

> mortgage/rent payment These are not the same at all. > 25% should be the goal I think 70% should be the goal - why? Because I pulled it out of my ass. Do you have a sound financial explanation for this benchmark, because it sounds like arbitrary dick sizing. 60% of income on a mortgage in a relatively stable area without insane property taxes is likely a very prudent allocation of income, since you both have a good investment and a place to live. Spending 60% or even more of income on a mortgage may well be better than 25% on rent. Another thing, 25% of income is very different at $30k then it is at $300k. This is something the budding personal finance advisor should understand. > then you need roommates Is that what you’re going to tell people in their 30s with kids?

bombcar 4y ago
> Is that what you’re going to tell people in their 30s with kids? Kids are just roommates that never help with the rent. ;)
mattw2121 4y ago
Yes, if you are in your 30's with kids and not making enough to afford your bills, you need more jobs, higher paying jobs, or roommates.
- fuckstick 4y ago
  > Yes, if you are in your 30's with kids and not making enough to afford your bills, you need more jobs, higher paying jobs, or roommates. To meet some arbitrary 25% income metric - no thanks. Notice you said nothing about “afford your bills” previously - but you have some very unsubstantiated definition for afford. The idea that one should automatically consider roommates if they can’t keep housing below 25% of income is asinine. Meanwhile still waiting for the derivation of “25%” in the first place.
  - mattw2121 4y ago
    I'm not going to break down an entire budget for someone living on 40-50k, but if they are spending more than 25-30% on rent/mortgage they will have a real hard time making utilities, food, car, insurance, etc work.
    - fuckstick 4y ago
      > rent/mortgage Again with that clueless equivocation. > 40-50k, but if they are spending more than 25-30% on rent/mortgage they will have a real hard time making utilities, food, car, insurance, etc work. And yet millions of families in the US alone are literally making this work. So that’s nonsense. I have literally lived this. There is no goddamn reason spending more than 50% of your income to own a nice home in a good location is necessarily a bad allocation - there are far worse. It’s not for everybody but it isn’t inherently irresponsible. So what value does an arbitrary rule like 25% have - especially considering differences in absolute income - none whatsoever. Finding suitable roommates is also not something anywhere near as easy as you make it sound. Have a nice day. I know I’m not going to stop you spewing your inane life advice.
      - 4y ago

bombcar 4y ago

What happened is the banks had a rule "total debt payments cannot be over 30%" years and years ago, based on their understanding of many customers and bankruptcies and such. Over time this became "spend 30% on housing" which, if you think about it, is kinda insane. It's obviously a rule of thumb that doesn't fit directly to everyone (should Musk spend $720 million a year on housing? Should you buy a new house every time you get a raise/change jobs?). It's like the "renting is throwing away money" - it's a marketing tagline that has become gospel truth somehow. There are times for renting and times for buying and each situation should be evaluated to the best of your ability with the knowledge you have.