The traditional 30% rule for housing expenses is becoming increasingly unrealistic as housing costs skyrocket. Experts suggest a range of 35% to 39% might be more accurate, while cautioning against spending 50% or more on housing due to budget strain and lack of flexibility.
Yet figuring out how much you can reasonably afford to spend on housing has become increasingly complicated in recent years, as shelter costs continue to rise.— a decades-old rule of thumb suggests spending no more than 30% of your income on housing, or about $2,000 per month. But for many earners, that's far from realistic, especially in large cities where housing prices have surged the most.
Spending 50% or more of your income on housing should be avoided, if possible, says Eliason. Dedicating that much to housing puts"undue pressure" on your budget, limiting your ability to save for future goals or cover unexpected expenses.
Housing Costs Budgeting Financial Advice Income Saving
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