Ask the Readers: How Much Do You Spend on Housing?
Published on - February 17th, 2012 (by J.D. Roth) Over the past few months, I’ve occasionally used the “Ask the Readers” feature at Get Rich Slowly to poll people about their budgets and spending habits. So far, I’ve asked folks to share their spending on food, clothes, gifts, and health insurance. Now I want to look at a bigger item in your budget — probably the biggest. Let’s talk about how much you spend on housing.
More than other expenses, your housing costs are influenced by where you live. Some parts of the country — and some parts of the world — are much cheaper to buy a home or to rent an apartment. It’s cheaper to live in Boise, Idaho, for instance, than to live in New York City. Generally, however, there are reasons for these price disparities. Most people are willing to pay more to live in New York than in Boise, and that drives prices higher. It’s a trade-off.
I’m a firm believer in the Balanced Money Formula, which says that if you pay too much for housing, you’ll have less to spend on other wants and needs, and you’ll always feel pinched, as if you can’t afford anything. On the other hand, if you limit your housing expense to below 25% of your take-home pay, you should have lots of breathing room.
For my own part, I pay a little more than I ought to for housing. After a few years of spending $0 per month (because we paid off the mortgage after selling the blog), I’m now paying $950 for my apartment in Portland. That’s 36% of my take-home pay, and a fine example of not practicing what I preach. But I’m able to get away with this because:
- I’m still saving more than 20% of my income.
- I have ample emergency savings.
- The rest of my spending on needs is low.
- My spending on wants is extremely low, and my relatively high housing expense doesn’t make me feel pinched.
As I mentioned before, this $950/month figure seemed high to me until I started comparing notes with other Portland renters. Yes, there are places that cost less, but they all involve compromises I’m unwilling to make right now. (The biggest compromise? Location. I want to be able to walk almost everywhere, and I can do that from this apartment. That’ll help me save money on auto expenses, which balances things a little.)
What about you? Where do you live and how much do you pay on housing? What percentage of your budget does this represent? Does your housing payment cramp other parts of your life? Or have you intentionally kept it low so that you can afford to spend on other things? If you were to start over again from scratch, what sorts of housing choices would you make? Would you rent? Would you buy? Would you move to another part of the country (or the world)?
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My fiancé and I are about to close on our first house next month. Our mortgage including principle and interest, taxes, insurance will be around $970 a month. We currently rent a 950 sq ft 2 bedroom 2bath apartment for $965. Our new house will be 2150 sq ft with 4 bedrooms 3.5 baths on half an acre. We decided to buy because the market is so low, we could get so much more for the same price as rent. Plus with our good credit we got an interest rate of 3.75%. Also the deal itself was too good. Our house sold in 2007 for 255,500 and we are buying it for over $90,000 less. While our cost is a little more than 32% take home, we are both right out of college with jobs that we pay less than normal which we hope to change after the house settles. But it’s all looking good for now.
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My wife, daughter and I live in Delanson, NY, a small village west of Albany and Schenectady. We’re renting (one side of) a duplex with 3 bedrooms and 1.5 bathrooms for $950/month.
I wish it were less.
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I may be in a unique situation since our household is considered the top 1% of income earners in America.
We spend approximately $4000/month on housing which include P&I, insurance, and property taxes. We live in NJ so our property taxes are really high.
However, this only represents a very small fraction of what we bring home in monthly income…less than 20%…closer to 15% depending on the month since our incomes can be a bit variable.
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If your take home income is 20-26K a MONTH, then why do you need to read a blog like Get Rich Slowly? Either you have a problem saving, or your goal is to simply patronize.
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$250K a year is definitely enough to save at a good clip with anywhere, but that’s not “independently wealthy” money unless there’s serious accrued wealth behind it. I don’t make that much, but I don’t think it’s weird at all that someone who does is interested in personal finance and frugality.
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250K per year (sounds like after tax income) is certainly enough to gain financial independence in a few years if one saves diligently. But that won’t happen with $4000/month in housing expenses. I am not saying that someone who makes that much doesn’t need to read personal finance blogs or watch their spending, but based on previous comments by this person, I really don’t think they are interested in frugality, which IMO is one of the strengths of this blog.
My criticism was mainly directed towards the tone, i.e. “Just so you know guys, my situation might be unique, because our household is considered the top 1% of income earners in America.”
Wow, REALLY!!?? I really didn’t get that based on your moniker, i.e. “I am 1 percent”. (sarcasm abounds–not to mention that it’s grammatically incorrect, one cannot by definition be a percentage).
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Maybe to stay wealhy, start an early retirement, become even more wealty…Are you suggesting that someone who makes a good living should not be interested in personal finance advice? Isnt that the mentality adopted by celebrities who become bankrupt or taken by someone in charge of their finances?
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Just because they make a lot of money doesn’t mean they don’t care about making sure they don’t blow it all and end up living paycheck to paycheck. Lots of wealthy people do that. And I’d argue that the more money you have, the easier it is to forget that you still have to manage it well.
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I wouldn’t consider 1/5 a “very small fraction” of what you take home. It’s a comfortable payment but very small is an overstatement.
Also, I don’t imagine you’re that unique in NJ, where more than 7 percent of households have a million dollars or more in investible assets (excluding home equity).
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My wife, myself, and our 1 year old live in Delaware in a 3 Bedroom house, about 2000 sq ft. The mortgage payment is about $1240 per month , including property tax, homeowner’s insurance, and FHA mortgage insurance (can’t wait for that to go away).
That payment is about 31% of take-home pay, which is after tax, health insurance, and my 401k contribution. I don’t really feel pinched.
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I pay $612/mo for 1 bedroom in a 4 bed/2 bath apartment in Brookline, MA. With the subway, shops, restaurants, banks, pharmacies, movie theater, bus stops, and grocery stores within a 5 minute walk of my apartment, this apartment is a steal.
So 4 roommates at $612 each is $2448/mo for a 4 bed 2 bath apartment.
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Inner ring suburb of Minneapolis, MN. We pay just under $1100/mo (P&I, plus all escrows) for our 1600 sq ft 3 bed/2 ba rambler (although we’re in the process of adding a 4th bedroom in the basement). That’s between 25-30% of our take-home pay depending on my self-employed income that month. We recently refi’d to a 20 year mortgage (we were 4 years into a 30 year), which kept our payments exactly the same, but $300 more per month goes toward the principal. We likely won’t stay more than another 5 years, but we have 3 kids now and will probably have another or 2 and we’d eventually like to build a slightly bigger, better designed home on a few acres. I think we’re a little pinched, but that’s due to living primarily off a teacher’s salary.
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I live in Central Michigan Gratiot County area and rent. Our rent is $475 a month for a 2 bedroom trailer on an acre of land 5 miles from town. For the last year that has been close to 40% of our income but we are not gonna find anything cheaper!
This year it will be about 28% of our income so should be a tad more comfortable!
If I started from scratch I probably would be living in Costa Rica or Belize!
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I pay $1000 per month to rent a tiny house in suburban northern new jersey. Includes heat and it is the cheapest rent I have seen in the area. It is 27% of my monthly income. I am looking to buy a house in the next year. The ones I am looking at are in a slightly more north area but it may turn out to actually be slightly cheaper including taxes or roughly the same. My income is expected to go higher, so the ratio will hopefully lower. Most rents in the area for something with two bedrooms are at least $1300, though.
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My fiancé and I split $940 in rent (which includes heat) on a 770-square-foot one-bedroom apartment in Chicago. This is about 15% of our combined take-home pay each month. We are intentionally keeping costs low so that we can put as much money as possible toward paying down his student loans. Once that’s done we look forward to paying a little bit more each month to get a washer and dryer in our unit!
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My girlfriend and I live in a 1400/mo 1 bedroom in Charlestown, MA (Greater Boston). The 700 split comes out just a hair over %25 of take home and I am still able to save %20 and contribute a decent amount to my retirement savings. All in all a good scenario since we are both young professionals looking to continually progress career-wise with the opportunity to continue renting in this reasonably priced apartment while saving up for a down payment on a house within the next 3-5 years.
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Like Clementine, we’re also in the rural Northeast (Vermont). We have a small 2 bdrm house on 2 acres, very modest for this area. $990/mo. covers the mortgage, taxes and insurance. That’s about 17% of our gross (husband is retired) and 23.5% of our net (including retirement savings contributions).
I’m happy to not be saddled with a large debt. Not worrying makes a huge difference in life. I know that from hard experience!
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In Arlington MA we pay $1600/month on rent for a 2 bedroom apartment. This equates to about 25% of our take home pay. I would like to see that lowered though not sure if that will be through moving or buying. I don’t feel pinched at all because our only other outstanding debt is student loans.
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I live in a 1 bedroom apartment in Charleston, WV and pay $620 for rent and $29 for renter’s insurance. Most utilities and cable are included. I only pay for internet and the electric bill (there’s gas heat). All of this makes up about 30% of my take home income. I would prefer to pay less, but that’s only because I tend to obsess about saving money. I’m 23 years old and just starting my career, so I decided not to buy a house because I wanted to be mobile, because I don’t know where life if going to take me! I only live a mile from work, in a decently safe part of town, in a secure apartment. I can’t really complain! I figure I save money from my short commute. I’d rather pay what I do now and live where I’m at than living 10 miles away and getting stuck in traffic everyday to save $100 in rent. Convenience and security, two things I love!
I am starting from scratch, but if I could change something, I would have starting saving more money earlier. I also would have tried to refrain from my “first real job spending spree”. I intend on buying one day and have started saving a little for a down payment on a house, but it’s not my top priority right now. I always thought I’d leave WV, but it’s a really nice place to live. Everywhere I’ve visited so far isn’t much better, and our cost of living is much lower. I’m open to moving elsewhere, but for now I’m content
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Right now my husband and I pay $1725 for a 1 bed 1 bath apartment in Georgetown (Washington DC). It’s 43% of our income, and we do feel a bit pinched, but it’s worked for a couple reasons. 1) We can both walk to work — no transportation costs! and 2) it’s a temporary position (two years). This fall we’re moving to LA, which for us will have comparatively cheaper housing. With a 33% increase in my income coming with my new position, our goal is to settle in at a place that’s 25% or less of our take-home.
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I live in a city in New England and pay $975/mo for an apartment with my husband, which is about 25% of our income 9 months of the year, and 28-30% for our entire yearly income. We definitely tried to find a cheap apartment within walking distance of most things, and are paying only $75/mo more than the very cheapest two that were tiny and in bad locations, but $2-300 less than the many that are similar to ours but have dishwashers and laundry machines.
It’s the summer that pinches, though. I make 0-40% of my normal income over the summer because I’m a graduate student and work on my own research then, and when I lived with roommates I left town to do research and sublet my room, but now that I’m married I don’t have my own bedroom! I do save 25% of my income during the school year so I have it to live on during the summer, but because of the travel for research, my costs go up when my salary goes down. Bah!
So in anticipation of this, I’m applying for grants and a short term teaching job for the summer, and of course my husband is going to pay more out of his salary as we need it, but I’d really like to earn more so that we can both continue to save during those months.
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I live in a three bedroom semi-detached house in London, bought for $561,000 in March 2009. Current value c. $820,000 after spending $135,000 on improvements.
My mortgage is $1,875 per month with $780 extra costs (bills/local tax). This equates to 40% of my take home pay.
While this looks high the logic I use is that by forcing myself to pay this much I’m keeping my other discretionary spending very disciplined.
In addition I am effectively saving $625 per month into the best tax-free asset I can (i.e. primary property, free of Capital Gains Tax).
I have school fees starting this year in the order of $2,100 per month which will put a further ‘middle class squeeze’ on me but again investing in my four year old son should pay dividends in the future
This pattern will continue until 2015 when we leave London and I am able to rent out my house for over $3,000 per month.
Our outgoings will dramatically reduce and the index-linked monthly income of $1,200 will certainly come in use.
As always: ‘If you wish to make the Gods laugh, tell them your plans.’
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I live in West Michigan and have a small mortgage remaining on our home sitting on 5 acres. I recently refinanced to get a lower rate, so today my mortgage (P&I only) is $673 plus I set aside another $600 for taxes, insurance, and upkeep. Combined this is under 15% of my net income.
I am focusing on killing the mortgage in the next few years.
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Our mortgage payment plus taxes and insurance is about $820/month on a 15 year mortgage in Indiana. That’s about 15% of our take home pay or 10% of gross. We intentionally kept this low by only having a mortgage for approximately 30% of the purchase price. Our goal was to allow me to be a stay-at-home mom without missing my income too much!
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UK: Kent
mortgage: 37% of joint takehome
gas,elec,water,counciltax,homeinsurance: 11% of joint takehome.
so housing costs excluding food, tv, internet, phone: 48%
Ouch. wondered where it all went. I think it would be interesting to compare % against age. As a 30 year old, I wonder whether I’ve lost out as salaries haven’t increased by as much as house prices.
Plan to overpay on that mortgage next year to get it down. Will be good to know what the average UK % figure *should be*
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I live in Manhattan and pay $2000/month for a 1-bedroom apartment, about 450 square feet, on the 5th floor with no elevator. It’s well over 50% of my income and it makes me unhappy. It’s only for a year though.
Previously:
$1725 for a 1000 sf coach house & parking spot in Chicago
$1625 for a beautiful 2br apartment in a 6-flat and parking spot in Chicago
$1200 for a 4-room railroad apartment (800sf) off the beaten path in Brooklyn
$1300 for a 250sf studio in the Lower East Side
$850 for a 1br in a slumlord building in Chicago (near the University of Chicago)
We’re planning to move to our hometown, a city of about a million, where we can buy a small 800sf house close to downtown in a walkable area for a payment of $1600 or so. Once we both have jobs there it will be around 25% of our income.
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Currently live in a a one bedroom apartment in the heart of downtown Phoenix. I pay about $900/month. Utilities are ~150/month more.
I take home $2,800/month – but a chunk of that money goes into savings and my FSA before it hits my bank account.
I realize it’s probably a better “deal” to buy a house – especially in the Phoenix market, but I appreciate the flexibility I have if I ever want to move – either to another state or country.
I suppose I’d have other considerations if I were attached or have kids.
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My wife and I purchased a duplex 6 years ago. Our payment is $1049 monthly. The tenent on the other side pays$715 so we pay the balance of $334 which is great for bulking up the payments when our debt is paid off. We’ve been able to do it quickly because of our living situation.
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We live outside Baltimore and pay about $2000 per month for the mortgage, property taxes, HOA, and insurance (no escrow) for a 2400 sf, 4 bed/3-1/2 bath house on a 0.2 acre lot. This is about 25 to 30% of our take-home pay. The mortgage is our only debt.
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I live in Chestnut Hill, MA (Just outside of Boston) with my GF. We rent a 3 BR, 1 BA apartment in 3 unit multifamily home. We have 1200 sq ft and share a 2 car garage with another tenant and a small backyard with all 3 units. 1000 feet from the Boston T.
We pay 1850 in rent + about 200 in utils per month. I pay all the utils and 950 of the rent. Housing is 23% of my take home, utils bring it up to about 25%.
Rent prices are ridiculously high right now. I don’t want to commit to a house yet, but the sweet low mortgage payment I could get on a forclosure would be nice.
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We live in Massachusetts, kind of rural town, not cheap here (though not like Boston). Anyway, with a home equity/mortgage combination, we pay 1700 (not including taxes/insurance). It’s 21% of our monthly net. We’re aggressively paying down other debt, so we’re pinched that way but not due to housing. Average income for our town is less than ours (surprisingly) and average house cost is nearly 2x what ours cost (bought in 2001). WOW.
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I live just outside of Hartford, CT and I pay $1140 a month for my mortgage and taxes. That’s about 30% of my income. I don’t feel pinched (at the moment) and my mortgage is cheaper than any rent I could find around here. My house is 1500 sq ft and really too big for me, but I like my property and my garage (my garage is almost 1000 sq ft!) so it’s the right choice for me, for now.
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My mortgage takes about 21% of my gross salary and about 31% of my take home pay. I’m planning to increase payments to it this year with an eye to paying it off in the next 6 years or so. I refinanced to a shorter term a few years back to pay off other debt so it’s more than the $78,000 I paid for the house here in CA, but in the end, I think it was worth it. Luckily, my taxes are about $600 a year. I have no other debt and few expenses, so I don’t feel stressed. I built up my emergency savings with this budget, and now I plan to move funds to the house payment instead of continuing to build the emergency fund. I feel paying off the house is the best thing I can do for myself before I retire. I have to say that finding GRS in 2007 and taking the advice to heart was the best thing for me financially and I really am grateful for the help and support this site provides. It’s a terrific resource.
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We have an interesting situation because of our (kinda) HELOC (http://www.preservingpennies.blogspot.com/2012/02/manulife-one-review.html) where we can choose how much we want to pay on our mortgage. If I just pay the monthly interest and property taxes it costs us $800/month which is about 20% of our income currently (I’m on mat leave and my husband is working less hours because it is winter). Of course if we just did that we would never pay off our mortgage.
So we do put more money than that into it but that depends on how much we make each month- goes up significantly in the summer. Our HELOC has been a huge blessing while I’ve been on mat. leave. It has taken away so much stress and we’ve still been able to pay more off than I would have thought!
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My family pays $2400 in mortage, taxes and HO insurance for a small 3 br, 2ba house on a small lot in a desirable (but not top of the line) community in easy commuting distance of Boston.
It is easily affordable on the salary of two mid-career professionals with no other debt. If we went down to a single salary our budget would be really tight. We could probably pay the mortgage and monthly bills, but not be able to eat out, save for retirement or send our kids to college.
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My husband and I live in West Texas, in a 3 bedroom 1800 sq foot house in a very nice, established area of our city (houses built late 70s).
We pay 1040/month for principle, taxes, regular insurance, and flood insurance (required coverage b/c we are in a flood zone).
This is about 16% of our take home pay. When we first moved in, (3 years ago) the insurance was much less, but with a few natural disasters hurting the state, our rates went up a couple of hundred dollars. We were very happy we resisted the instance of our others to get a house at the top of our “approved” budget, with the hike, it would have put us in a jam.
We are currently aggressively paying down our student loans (almost half way done), and plan to start tackling the mortgage next year.
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I also live in West Texas (Lubbock to be exact). My house payment (PITI) is $1119.00 for a 3/2/2 with 2000 sq ft in a newer neighborhood in a great school district. I refinanced a year ago and am 1 year into a 15-year mortgage @ 3.75%. My payment represents 22% of my gross and 36% of my take-home (my retirement contributions are high as I am maxing out my SIMPLE IRA every year).
I paid off my student loans last year and now my goal is to have my house paid off in under 5 years. I bought my house brand-new 6 years ago and have been tempted to move a few times as the neighborhood is changing a bit and it appears that new neighbors don’t really maintain their properties as well as those who lived there before them (it’s a tract-home neighborhood with many “starter homes”).
Each time I get the urge, though, I have resisted as I really just want to pay it off and build wealth as quickly as possible while still traveling a bit and enjoying life. I will do a few improvements this year (replace the builder’s grade carpet with laminate flooring and new carpet/tile and perhaps a new fence). I figure it’s better than taking on a new, more expensive mortgage and this will help me enjoy my home more while achieving my goals much sooner.
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We pay $1,025.44 per month on our mortgage, but about 150 of that is our PMI. Once the PMI is gone, we’ll be paying less than what we used to pay in rent.
That is a pretty good amount for a newly remodeled home in town, in Eugene, Oregon. It is a 3 bed, one bath home. It comes out to roughly 26% of our take home pay.
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I rent a 2/2 with a roommate in Atlanta, and we each pay $575 in rent. With utilities and renter’s insurance, my housing costs are around $750/month, which is 18% of take home pay. Lease is up in July, though, and I’m moving out. We’ll see if I can get another gig like this one!
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When we had a mortgage, our payment was 11% of our take home pay. Now that we own the place, taxes and insurance make up 1.5%. We live in a little 2BR house “up north”.
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Renting a 3BR/2BA apartment in Loudoun County, VA for $1540/month – this includes our trash fee and ‘pet rent’ for our cats ($30/mo). About 12% of our gross income or 18% of our monthly take-home pay.
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This post is very interesting. Ivve learned more than expected. First, I’ve learned that a lot of people read this blog outside the US. Second, I’ve learned that GRS readers make good money.
I pay $1,400 in downtown Chicago for a tiny 2 bdr/1 bath with parking. It represents 27% of net pay and 18% of gross pay. I also overpay by $250/mo (included in the numbers) to get the mortgage paid off early.
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I live in probably the most popular neighborhood in Pittsburgh and pay $870/month for a small one-bedroom that I share with my husband. When we lived in Chicago (south loop) we paid $1500/month for a large one-bedroom. Since my salary didn’t change much from one location to another, it seems like we pay much, much less now. My husband went from being an engineer to a PhD student though so his portion (we have separate finances) probably feels about the same, percentage-wise.
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NW Minneapolis suburbs
$846.53/month for an 1800sqft 1950s rambler.
We make about $5500/month.
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I didn’t know they made houses that big in the 1950s. Cool!
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The main floor is 912 sqft, then we finished the basement so we can use it for another 900 sqft.
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Weird, my name is Michael, I too live in a NW Minneapolis SB and own a Rambler with almost the same SQFT… just the basement is unfinished.
I Net $4200, when my wife is working, it’s $7k. But that not a year round deal…
However I bought in 2004… near peak in this area… looks like either you put more down or bought in the last year or two.
We just finished paying off the 2nd Mortgage this month and that leaves us with a $980 (P+I+T)… Small world.
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Currently I rent an one bedroom apartment in Houston for $730, which used to be 33% of my net pay. I just got a new job (first “real” job after getting my PhD), and it’s now 23% of my net.
However, I’m looking to buy a condo and prices for a two bedroom are looking to be around $1100 with condo fees. That would be about 35% of my net pay. The major complex I’m looking at includes in the HOA fees electricity, water, insurance, Uverse TV and internet. I’m hoping to be able to keep making triple payments on my student loans if I do move.
Finding it hard to jump to buy though just because I’m worried about making a bad financial decision, but everyone says now is the time to buy. We’ll see what I end up doing…
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Hey, from a current PhD student, congrats on your job!
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Thanks! I’m mostly just excited about surviving… It was a rough 6 years!
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I finished my PhD and got a ‘real’ job in 2009. I got two huge bumps in income (1.8x my grad school stipend when I took a postdoc, and then moved to 2.7x my grad school stipend when I moved to corporate america a year later). But for the most part we kept our expenses the same until we moved in 2011 for my husband’s job. It allowed us to save like mad, pay off my undergrad student loans 7 years early and my car loan 4 years early. We’re debt free as of March 5th. Don’t rush to buy the condo just because it’s the “thing to do”. And congrats on your job!
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We live in Cancun, Mexico and spend about $375 a month on rent for a small 3 bedroom, 2 bathroom house.
We spend anywhere from $20 – $50 a month in utilities.
This is about 18% of my take-home income… will be considerably less once my husband starts working full time.
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We live in Somerset County, NJ, and pay $1,800 in rent monthly for a 3 br (with finished basement that we use as a 4th br) townhome. I never calculated the percentage of our income before just now, but we’re at 21%, which is good I think. I know when I first moved out on my own as a single mom with 2 kids, my housing expenses were at least 50% of my income and that was HARD.
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$372/month in Austin, Texas. My house is paid off, so that covers taxes, insurance, and upkeep; there’s also $150/month in utilities and, when I was working, I was saving $138/month for renovations (I want a dishwasher, covered parking, and a laundry room). Before the house was paid off, it was $624. My take-home pay was about $2400, so that’s about 25%. The $372 is also about 25% of my current budget of $1500 while I’m unemployed.
The house in question is a 100-square-foot 2-1 built in 1955 close to downtown but on the wrong side of the freeway. The washer is in the kitchen and there are laundry lines out back (and we’re allowed to use them.) The cost was ONE-HALF the median cost for a house in my city when I bought it because it’s small, old, and in a marginal part of town. Property taxes are high in Texas, partly because there’s no income tax, and I get both homeowner’s and flood insurance (I’m not in a a 100-year flood plain, but the apartment complex on the other side of my back fence is). All these numbers (except for the renovation savings) are half the real cost because I always have a roommate.
The cheapest non-scary 2-bedroom apartments in a similar area are $900/month + utilities (last I checked), so $450/person, cheaper than when I was still making payments, but slightly more than when I’m not making payments–but it’s a little like comparing apples to oranges. Utilities cost about half as much in apartments, you get a dishwasher, you don’t get a clothes washer but instead a community laundry room, and you don’t have to take care of the yard, but you do have to deal with paper-thin walls. I’m hoping property taxes and insurance rates will rise more slowly than rents. We’ll see.
I was raised in suburbs, and I much prefer living in the city. I’ve also lived in rural areas, and even before there was the internet, I preferred that over suburban living, too, though not over urban living. Most of my friends pay a little bit more for housing at least twice as big as mine, but they live on the outskirts of town or suburbs and their utilities bills are much higher. My sister lives in a suburb of Indianapolis, and it is SO cheap compared to here that she’s also getting a huge place. I have the advantage of winter days that are like everyone else’s spring days. (We’re not talking about the FOUR months of days with highs above or near 100 degrees last summer–usually it’s only 1 or 1 1/2 months of crazy heat.) I handle the heat much better than the cold, the snow, the scraping, the shoveling, the car rusting, etc.
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We live in Wichita, KS and pay $560 in rent per month for a two bedroom, two bath apartment (950 sq ft). It’s 14% of our income. Spend about an average of $50/mo in electric, the only utility we pay for.
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We have been paying $4,850 for P&I, taxes and insurance, but recently sold our house. We are looking for a new place to buy, or may just rent a house for 1-2 years until the right thing comes along. I’ve been wrestling a lot with how much house we should buy – we are committed to our current schools, and we refuse to have a long commute, so we are very central in a fairly large city (1M+) and housing is expensive to live close to downtown. There is such a range of options, and it’s hard to prioritize – while the neighborhood and being on a kid-friendly street is our top priority, we would really like a house that has good flow and allows for entertaining, but those typically cost a bit more.
We both work fairly demanding jobs, so we’ve been paying less than 20% on housing, and even buying more would just put us slightly above 20%, but it sure seems like it’s more than that. I guess when you take out taxes, insurance, utilities, groceries, pre-school and child care, our housing costs are obviously a much larger % of our disposable income.
So in looking at new houses, we may increase our monthly nut to $6,000, but I am trying to figure out how to front-end some of that so that we get some loans paid off in 4-5 years and start to snowball some of the other loans. It sure would be nice to have no mortgage by the time the kids start college so that our mortgage payments can be shifted to tuition bills!
Good topic, though, especially since housing is typically such a huge part of the budget.
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I pay $1,700 for a 1 bedroom fourth floor walk up in downtown Boston. I’m paying for location, but I think it is worth it – I practically live above my grocery store! This represents about 15% of our combined take home. We could afford to move into a nicer apartment, and dream about it (a dishwasher! laundry in building! parking!), but I have a hard time justifying it…
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I’m a current PhD student so my income fluctuates. Right now making about $4036/month after taxes and deductions, and my housing is $845 for a bachelor apartment in Toronto, Canada, so 21% of my income. The apartment is nothing fancy, it’s in an older low-rise on the top floor (so no foot traffic above me), with lots of light in a neighborhood where I can walk to coffee shops, restaurants, my bank, and the grocery store. It is on the subway line and is about a 10 minute subway ride to downtown.
With my current income I’ve been able to save about 60% of my take home pay. Although in the summer my income will change dramatically. Right now my only guaranteed income is a small RA-ship, and my housing might end up being more like 90% of my take home pay (Yikes!!). Which means that like EXK, I’ll need to save some of my income and live off my savings in the summer.
I feel like there definitely is a tradeoff. This year I have been taking on additional work as a Teaching Assistant/Sessional Instructor at other universities in the area. So I’ve been able to save a lot of my income. But I haven’t been able to work on my dissertation. So taking a pay cut in order to have more time to work on research I think is really important. I just wish housing in this city wasn’t so expensive.
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We are a family of 5 in Grand Rapids MI area. $2300 per month in mortgage, taxes and ins. gets us a 4400 SF 6 bed house on 1 acre 17 minutes from downtown. This is less than 25% of our budget, so we are making extra payment to kill the mortgage within the next 5 years or so.
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My partner and I live near Ottawa, Canada and pay $725/month for a two-bedroom apartment, which works out to about 17% of our combined annual income. It’s not in the greatest area (hence the price being much, much lower than anything else in the area), but we made a conscious decision to live really cheaply for a few years to save up money for a house of our own. We finally saved up enough and will be closing on our new house in May. After that, our housing costs will be about 27-28% of our combined income.
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That’s awesome. Did you buy in Ottawa or Gatineau?
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My husband and I just purchased a house in a suburb of Dallas/Fort Worth (it’s between the two). We actually close on the sale of our old 1400 sqft house near downtown Fort Worth on Tuesday, which we had no mortgage on but taxes and insurance worked out to be $6300 a year or about $500 a month. Once we put the money from the sale of the old house on the new house mortgage (we put 20% down until the sale of our old house was finalized), which our first payment is due for on March 1st, the new 15 year mortgage PITI will be $1661 for a 3400 sqft 4 car garage house with a pool. Our take home pay per month (combined) is a little under $15k, which makes our housing about 11% of our budget. We have a year’s emergency fund saved and no other debt so I imagine that we’ll pay off the new mortgage within the first 2-3 years (especially since I didn’t include overtime pay in the net take home amount, which we tend to work about 10 hours/week at time and a half).
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In San Antonio TX, I’m paying $640.00 per month for a comfortable 1BR/BA apartment, which is about 32% of my take-home. That amount covers rent, gas, and water, so it is slightly variable (within a few bucks). Having just moved in last year, I’m not looking to move anytime soon.
That said, I’ve been advised that there will be a 3% raise in my rent coming up when I renew my lease. Still well within my limits, but it might be time to start thinking about additional revenue streams for the year AFTER this one. Pay increases are frozen – for now, at least – for where I work, so I need to start working on that.
Good – and thought-provoking – post.
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I live in DC proper. I pay $1550, which is 41.46% of my take home pay. I actually decided to triple my rent almost a year ago, moving an hour closer to work each way and moving out by myself rather than in an apartment with a roommate. I don’t regret this one bit. I do have a lot less spending cash (obviously) but it has been helping me focus my spending on what I really want it to go towards rather than mindlessly spending $1800 on sushi in 6 months (true story).
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