How Spending No More Than 30% On Housing Can Seriously Grow Your Wealth
- 3 years ago
Mortgage underwriters and personal finance advisers recommend that Americans spend no more than 28% to 30% of their income on housing costs.
And according to Certified Financial Planner and Business Insider contributor Tanza Loudenback, it's a very good rule of thumb if you want to build wealth.
Of course, to achieve this, you may have to take a few deep breaths along the way and do things like sharing with roommates or renting the 'worst' bedroom.
However, by keeping your long-term fixed housing costs to less than 30% of your take-home pay, you can be far more flexible with the rest of your budget.
But remember, 'housing' costs don't just include rent. Utilities, such as power, water, sewage, garbage collection, cable, and internet all add up quickly.
Even so, living by the "30% rule" for housing can let you funnel more and more into retirement savings and other investments as your income improves!
And according to Certified Financial Planner and Business Insider contributor Tanza Loudenback, it's a very good rule of thumb if you want to build wealth.
Of course, to achieve this, you may have to take a few deep breaths along the way and do things like sharing with roommates or renting the 'worst' bedroom.
However, by keeping your long-term fixed housing costs to less than 30% of your take-home pay, you can be far more flexible with the rest of your budget.
But remember, 'housing' costs don't just include rent. Utilities, such as power, water, sewage, garbage collection, cable, and internet all add up quickly.
Even so, living by the "30% rule" for housing can let you funnel more and more into retirement savings and other investments as your income improves!