What percentage of your net do you spend on rent (or your mortgage)? (account, income)
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Location: Chapel Hill, NC, formerly NoVA and Phila
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Our mortage is currently about 38% of our net income and has always been a high portion of our net income. But...
1. We've always prioritized living in nice neighborhoods with good schools rather than living 'large' in other ways.
2. We have a 15-year mortgage which makes our monthly higher than those with a 30-year
3. My husband contributes $24K to his 401k (just turned 50)
4. We have no other debt - car loans, student loans, credit card bills, etc.
We have had absolutely no problem saving money for retirement, college, vacations, or other 'wants' despite spending a larger portion on housing than many people. We lived in the DC area for most of our married lives, where housing is expensive, so we watched our spending in areas that don't matter to us as much. I'd venture to guess that we have more saved than most people in our income bracket/age range.
Our mortage is currently about 38% of our net income and has always been a high portion of our net income. But...
1. We've always prioritized living in nice neighborhoods with good schools rather than living 'large' in other ways.
2. We have a 15-year mortgage which makes our monthly higher than those with a 30-year
3. My husband contributes $24K to his 401k (just turned 50)
4. We have no other debt - car loans, student loans, credit card bills, etc.
We have had absolutely no problem saving money for retirement, college, vacations, or other 'wants' despite spending a larger portion on housing than many people. We lived in the DC area for most of our married lives, where housing is expensive, so we watched our spending in areas that don't matter to us as much. I'd venture to guess that we have more saved than most people in our income bracket/age range.
If your husband is contributing $24k to his 401k (I thought that was over the limit...?), then you must have a household income high enough such that a good bit of money is left over still after the 38% of net goes to the mortgage. I'm not maxing my 401k but I sure could contribute a lot more to it if I weren't about to start paying 27% of my net to rent. Of course, if I had a partner I could cut that in half probably but for now it is what it is. I could also move to a LCOL but honestly it's not for me...at least not yet at my current age/stage in life.
Location: Chapel Hill, NC, formerly NoVA and Phila
9,781 posts, read 15,815,772 times
Reputation: 10894
Quote:
Originally Posted by southkakkatlantan
If your husband is contributing $24k to his 401k (I thought that was over the limit...?), then you must have a household income high enough such that a good bit of money is left over still after the 38% of net goes to the mortgage. I'm not maxing my 401k but I sure could contribute a lot more to it if I weren't about to start paying 27% of my net to rent. Of course, if I had a partner I could cut that in half probably but for now it is what it is. I could also move to a LCOL but honestly it's not for me...at least not yet at my current age/stage in life.
$18K is the limit until age 49. Once you hit age 50, you can contribute up to $24K. Our HHI is about $150K for a family of 5. So it's a good income, but not ridiculously high. Our net income is fairly low, though, because of the high 401k contrib., a flex plan for our health copays, health ins., dental ins., etc., so it makes our mortgage payment compared to net income seem high. The rest of our living costs are fairly low.
Well, not all 'that' glad because it means others also know what its like to experience the increase in rental costs.
My ideal would be 20% or less of my net to rent. That's not really happening without a roommate (I currently have one and am moving out in a few months). So the decision to go up to ~27% is making me nervous...it seems I 'am' actually priced out of the rental market here (at least inside of the city limits that is).
After 1-2 more years I'm thinking buy, or use some of my house down payment money on a vehicle and move further out. Else I'm looking at $1500+/month easily in rent around these parts which is what I just left in Chicago.
$1500 +/month would defiantly make me choke.
For a 1bdrm/studio in my city, rent seems to top out at around $1300 per month, in the downtown area, but most 1bdrm apartments are in the $1-1.2k range. I'm on the opposite side of town. It's on the edge of the city limits where there is a mix off city limits,suburban, and unincorporated county but suburban in nature by all accounts even it the city limits. The rent for a 1bdrm, ranges from the mid $700s to around $1100. The nicer apartment complexes are right at $900 per month for a 1bdrm across the board. The ones that are $1000-$1100 are either brand new or close to/or 1000sq ft in size. You do need a car no matter what area of town you live in though.
I will say that I'm currently in a good situation. My apartment complex is under new management and I just found out that my employer is a preferred employer, so I get a 3% rental discount . This equals to the annual rent increase when you resign your lease. So my rent will not increase when I resign my lease soon. I don't know if that means that it will stay static going forward but that appears to be the case, I hope. I also moved in before the current market rate increase of around $900/month. I have some time before I get close to paying that in rent, even if it increases again. On the flip side, I'm handcuffed to this apartment complex. I'm more concerned about the housing prices in the area though. Like I said earlier, I'm about 2 years from being priced out if the current trend continues. $1k/month is about the most I would like to pay for rent or housing.
It's hard to give a number. I own two paid-for residences. The condo fee at one of them is roughly the same as combined property taxes on both properties. I'm contracting and getting paid W2 a long distance from home at the moment. It's recurring so I can't write off hotel and transportation costs. I don't know my net since this just started. Housing and business travel might be 30% of my gross.
My mortgage is 32% of my net. I know that's high, but if I stayed in the apartment I used to rent, with the increases the landlord has made, I would be paying 37% in rent today. My mortgage was the same as my rent when I bought the house.
I'm actually pretty comfortable with it. I also save about 33% of my income and don't consider all of it "net" (I don't think of my 401(k) when considering my net income because I don't see it in my take-home pay and in my bank account ). Other savings I considered part of net and I pay it like a bill. So my way of thinking of net income is kind of screwed up. If I really had to, I could save less. But I live pretty comfortably as it is, have every thing I need and a few "wants" now and then... so there is no need to save less.
I should also add that every year I get a raise at work. Whatever percentage they raise my pay I just add my 401(k).
25% monthly net but 11% gross. Bad at tax planning, max 401s/457/HSA, and year end bonuses .
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