When people say you should spend 30% of your income on rent what do they mean? 30% of it before or after taxes? Do I subtract my car insurance and phone bill and shit like that too?
>>17144266
It means 30% of your income, silly
I would imagine they mean gross income because that's what all other financial applications and formulas I've seen have been based on.
it means if you take home 3k a month you should only spend 1k maximum on housing to be able to afford your other bills and a comfortable lifestyle.
>>17144291
so my paycheck each month is 4k. i spend ~500 on car payment, insurance, and phone bill. is my take home pay 4k or 3.5k?
>>17144296
it's total, before any bills. it's just a guideline though. i take home 4400 per month and spend only 700 on rent which allows me to save money at the cost of living in a bigger place in a nicer area.
different people mean different things, net or gross, and the percentage changes too
really it's tough to hold to that if you live in a high cost of living area
in the end it's a rule of thumb you should shoot for, nothing more
if you can comfortably get away with less, why not?
