Posted by: Taylor Today at 01:11:02 PM
"I was also taught by my folks that a mortgage/rent should never be more than 30% of take-home pay, so I went with that rule for myself. But of course, everyone's situation is different."
I was taught the same thing, Taylor. When I got my first "real" job, earning the princely sum of 13k per year, my Los Angeles rent was $375, which was about 35% of my gross wages. (However, the job included a company car, so I had zero auto expenses and no college debt.) I had a roommate, and we looked for months for a decent apartment that was affordable. When we finally found a good place, I stayed there for eleven years. Thanks to rent control, roommates, raises (and the company car), I finally got the number below 25% of my net. I saved like mad to afford the down payment on my first house. LA housing was so out of reach that my first property was a 3+2 single family home in the more affordable town where I grew up, well outside of LA, which I rented to my brother. I finally sold that eight years later to buy a tiny 2+1 condo that I could actually live in. Alas, now work had taken me to the San Francisco Bay Area, where housing prices were even worse. Though I got a screaming deal on a short sale, the payment was over 50% of my then gross. Ugh. Worse still, I found the condo before my house in SoCal sold, so I borrowed 6K from my retirement account. (But that's a whole other mistake, er, story.) All this took place before I bought my current townhouse, described in a previous post.
Here's my point: If you have no other debt and Mustachian spending and saving habits, you can make a budget that seems out of whack to others work for you. The skills Mr. MM espouses are amazingly versatile. You can figure out how to save in the areas that don't matter, so you can spend mindfully in the areas that do to you. (Sounds like Dave Ramsey or Donna Freedman or MMM. Whoever it is, they're brilliant.) None of my homes have ever been fancy or in "ritzy" areas. I'm not "house poor" because I can't afford my own taste (a la HGTV's Property Virgins). OTOH, I'm not whining about how out-of-reach home prices are either. I figured out what was important to me and then budgeted and saved to accomplish my goals. If there had been housing available to buy at a lower price (as owning was a huge bucket list goal for me), I would have gone that route. As it turns out, I think I'm doing okay despite my huge housing costs. YMMV, but don't be afraid to turn the budget on its ear to attain your goals.