Poll

What percent of your net income do you spend on rent?

0% (I live free somewhere)
8 (4.9%)
1-9%
16 (9.8%)
10-19%
48 (29.4%)
20-29%
39 (23.9%)
30-50%
18 (11%)
50%+
1 (0.6%)
I do not rent, I own.
33 (20.2%)

Total Members Voted: 155

Author Topic: Mustachian Renters - % of total take home income?  (Read 15137 times)

mobilisinmobili

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Mustachian Renters - % of total take home income?
« on: March 19, 2013, 09:16:06 AM »
I've read in many finance books that your rent should never be more than 33% of your take home pay.

Curious what other mustachian renters are doing.. I'm at 25% of my take home pay for rent personally.

arebelspy

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Re: Mustachian Renters - % of total take home income?
« Reply #1 on: March 19, 2013, 09:29:54 AM »
Added poll.
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matchewed

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Re: Mustachian Renters - % of total take home income?
« Reply #2 on: March 19, 2013, 09:37:04 AM »
Kinda glad to be putting it at a lowish rate. Roomate's GF is moving in which although increases the overall rent it drops by such a good amount for everyone on a personally paid basis. 15.8%*

*Edited for including percentage.
« Last Edit: March 19, 2013, 09:39:49 AM by matchewed »

ketchup

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Re: Mustachian Renters - % of total take home income?
« Reply #3 on: March 19, 2013, 09:48:56 AM »
Currently at 25%, but should lower soon, with 11% being best-case soon scenario (another roommate, back at the second seasonal job, and rental house occupied).

KatieSSS

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Re: Mustachian Renters - % of total take home income?
« Reply #4 on: March 19, 2013, 10:27:24 AM »
Yikes, mine is close to 50%! I knew it was high, but the % is really shocking. The unfortunate thing is I can't really do much about it. DC is insanely expensive. If I chose to live with roommates I'd still pay no less than $1,000/month to live in the District. I pay just under $1,300 for a studio. If I moved to a suburb, I'd be spending what I saved in rent on the commute. I priced all this out when I was moving and living further away from work would have saved me NO money. It actually ended up being more. The saving grace of my high rent is that I can walk to work on nice days, utilities are included, the grocery store is nearby, and I live in a safe neighborhood. For a woman in DC a safe neighborhood is key.

I figure I'm not doing too badly as I am paying off my debt at a rapid rate and still managing to contribute to my 403b and Roth IRA.

Kriegsspiel

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Re: Mustachian Renters - % of total take home income?
« Reply #5 on: March 19, 2013, 11:26:21 AM »
I'm at about 9%.  I live in a really cheap small town.

mobilisinmobili

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Re: Mustachian Renters - % of total take home income?
« Reply #6 on: March 19, 2013, 11:30:47 AM »

TLV

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Re: Mustachian Renters - % of total take home income?
« Reply #7 on: March 19, 2013, 11:33:30 AM »
Somewhere between 8% and 47% depending one what exactly you mean by "take home pay" - excluding payroll tax and income tax withholding is probably agreed on, but after that it's not clear where to draw the line.

Here's what makes up the difference between 8% and 47%:
* 401k contributions
* Insurance-y paycheck deductions
* ESPP contributions
* Direct-deposited taxable account contributions
* Roth IRA contributions
* Tithe
* Averaging in irregular income (bonuses)

I suppose if I interpret it literally as income that I physically take into my home, it would be more like 1500%, because we don't deal with cash much.

Phoebe

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Re: Mustachian Renters - % of total take home income?
« Reply #8 on: March 19, 2013, 11:41:10 AM »
In 2012 about 6% of our net pay went towards rent.  But we also fully fund our 401k's and HSA, so if you include those amounts we pay about 5%.  We live in a two bedroom townhome in Wisconsin.

jpo

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Re: Mustachian Renters - % of total take home income?
« Reply #9 on: March 19, 2013, 12:19:25 PM »
Counting only money from paycheck as take home (no HSA/401k/etc deductions), 32%. I grumble inside every time I write the check. After the lease is up we are moving.

John74

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Re: Mustachian Renters - % of total take home income?
« Reply #10 on: March 19, 2013, 01:20:01 PM »
We spend about 17% of our net income on rent.

mobilisinmobili

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Re: Mustachian Renters - % of total take home income?
« Reply #11 on: March 19, 2013, 01:36:33 PM »
Somewhere between 8% and 47% depending one what exactly you mean by "take home pay" - excluding payroll tax and income tax withholding is probably agreed on, but after that it's not clear where to draw the line.

Here's what makes up the difference between 8% and 47%:
* 401k contributions
* Insurance-y paycheck deductions
* ESPP contributions
* Direct-deposited taxable account contributions
* Roth IRA contributions
* Tithe
* Averaging in irregular income (bonuses)

I suppose if I interpret it literally as income that I physically take into my home, it would be more like 1500%, because we don't deal with cash much.

By take home I mean paycheck after taxes only. Deductions going towards your investments / savings is still 'take home' pay.. you're just taking it home and saving it!

mlipps

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Re: Mustachian Renters - % of total take home income?
« Reply #12 on: March 19, 2013, 02:02:29 PM »
16% until the end of this month. We start increasing our 401k contributions April 1 (Happy Dance!) and then it will be 20%.

Another reason I'm glad we moved to Chicago from DC...it was 27% until November!

tongzhi

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Re: Mustachian Renters - % of total take home income?
« Reply #13 on: March 19, 2013, 07:54:05 PM »
I consider take-home income to exclude all eductions, 401k, FSA, insurance, health... i.e. the amount actually deposited into my checking account, and that is about 20%. It would be closer to 40% but for my BF living with me. We share a small (400 square foot) modern studio in San Francisco with a washer dryer (very big on that last point). We pay $1,900 a month. That may seem like a ridiculous sum of money in most parts of the country but in SF it's a relatively good deal for a central location that's very conducive to walking, biking and transit. Nonetheless we own a car (I wouldn't if I lived alone, but you don't always have a choice with an SO) and part of that monthly sum is for our luxurious underground parking spot.

martynthewolf

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Re: Mustachian Renters - % of total take home income?
« Reply #14 on: March 20, 2013, 07:04:40 AM »
After tax my rent is 25.61% of my take home salary. Which I was surprised to see when I worked it out last month. However its a nice little place I got that could be charging me more!

zoltani

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Re: Mustachian Renters - % of total take home income?
« Reply #15 on: March 20, 2013, 04:14:53 PM »
14% of my take home, split rent with wife.  If you include both our salaries and the rent we pay it is probably less than that as the wife gets paid quite a bit more than I do.

frugalcalan

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Re: Mustachian Renters - % of total take home income?
« Reply #16 on: March 20, 2013, 04:43:08 PM »
Are we including utilities in this?

mm31

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Re: Mustachian Renters - % of total take home income?
« Reply #17 on: March 20, 2013, 05:00:14 PM »
A little under 9% if excluding 401k contributions from take-home pay

mpbaker22

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Re: Mustachian Renters - % of total take home income?
« Reply #18 on: March 20, 2013, 08:29:44 PM »
12.1% of my 2-paycheck-a-month deposits, which is what I live by for budgeting purposes.  But since I actually get 26 paychecks a year ...
11.1% of my total 26 paychecks per year.
9.9% of total cash coming into my bank account from my job per year (includes bonus and tax refund).
9.4% of total cash coming into my bank account plus cash into 401K less expected taxes paid on 401K

And now we see how companies skew their numbers so easily.  I checked the 10-19% box in the poll.

kythuen

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Re: Mustachian Renters - % of total take home income?
« Reply #19 on: March 21, 2013, 06:01:23 AM »
I'm at exactly 25%.  But that includes my cable, internet, water, trash, electric, gas, and heat.  I share a house with a friend in Boston, and because she's the owner, my rent is actually ridiculously low for the area.  That percentage would drop considerably if I tried to tease out how much the cable, etc. costs each month, but since my rent stays the same even when utility costs fluctuate... I really have no idea.  Might drop as low as 17%, just for the roof and walls.

Edited to add - that's 25% of the money that actually arrives in my bank each month via paycheck. 
« Last Edit: March 21, 2013, 06:10:36 AM by kythuen »

anastrophe

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Re: Mustachian Renters - % of total take home income?
« Reply #20 on: March 21, 2013, 07:20:19 AM »
25% after taxes, HSA, and retirement contributions. This is actually really low for my area, without increasing my transportation costs significantly. Of course I fantasize about something cheaper, but it would mean compromising on either transportation or safety.

skyrefuge

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Re: Mustachian Renters - % of total take home income?
« Reply #21 on: March 21, 2013, 01:29:39 PM »
we pay about 5%.  We live in a two bedroom townhome in Wisconsin.

Hey, that's about what I pay, 5.3%.

Oh, except that I don't rent. I own. A pretty modest house. With no mortgage. And a pretty big income. But I still pay 5.3% of my income a year in just property taxes.

Fuck. :-(

Zikoris

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Re: Mustachian Renters - % of total take home income?
« Reply #22 on: March 21, 2013, 08:07:51 PM »
16%. I have a 1 bedroom apartment in downtown Vancouver. Includes all utilities. Awesome location for transit as well - just about every bus in the city goes within a 3 block radius of my front door, though I can walk nearly everywhere I need to go.

capital

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Re: Mustachian Renters - % of total take home income?
« Reply #23 on: March 22, 2013, 08:58:54 AM »
Right around 20% in Brooklyn for a bedroom in a two-bedroom apartment. Rental prices in NYC are silly, though incomes are high for professionals and transportation is dirt cheap-- it's uncommon for a young person to own, and even stranger to commute via car here. Biking is reasonably common.

Phoebe

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Re: Mustachian Renters - % of total take home income?
« Reply #24 on: March 22, 2013, 01:09:01 PM »
we pay about 5%.  We live in a two bedroom townhome in Wisconsin.

Hey, that's about what I pay, 5.3%.

Oh, except that I don't rent. I own. A pretty modest house. With no mortgage. And a pretty big income. But I still pay 5.3% of my income a year in just property taxes.

Fuck. :-(

Yeah, I realized this would be the case some day when we buy.  I had dreams of saving money once we buy a house in cash, but it will probably be about the same when you consider taxes, higher utilities, repairs and insurance.  However, we will be paying about the same to live in a much larger place that we can someday sell.  But the ongoing costs won't go away.

dorothyc

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Re: Mustachian Renters - % of total take home income?
« Reply #25 on: March 22, 2013, 01:39:58 PM »
we pay about 5%.  We live in a two bedroom townhome in Wisconsin.

Hey, that's about what I pay, 5.3%.

Oh, except that I don't rent. I own. A pretty modest house. With no mortgage. And a pretty big income. But I still pay 5.3% of my income a year in just property taxes.

Fuck. :-(

Yeah, I realized this would be the case some day when we buy.  I had dreams of saving money once we buy a house in cash, but it will probably be about the same when you consider taxes, higher utilities, repairs and insurance.  However, we will be paying about the same to live in a much larger place that we can someday sell.  But the ongoing costs won't go away.

We pay 7.7 % of take home a year just in property taxes and homeowners insurance - one income family in Southern California.

SilverSoul

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Re: Mustachian Renters - % of total take home income?
« Reply #26 on: March 22, 2013, 02:28:04 PM »
About 15% here.

jnik

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Re: Mustachian Renters - % of total take home income?
« Reply #27 on: March 24, 2013, 07:47:53 AM »
15% of what gets deposited into my account, so that's after all taxes, 10% pre-tax 401k, various insurances (which will be re-evaluated next open enrollment), etc. Not including gf's contribution since we're reworking that in light of my new position/salary. I'd have to do a lot more record-digging and math to figure out what that is based on just post-tax. (Another way of looking at it: 30% of my living allowance, my paycheck is split between two accounts and I live off of one, save the other.)

mobilisinmobili

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Re: Mustachian Renters - % of total take home income?
« Reply #28 on: March 24, 2013, 03:38:30 PM »
For people paying less than 20% - do you feel that your income is high enough that you're paying the median (average) rental income in your area.. or are actively trying to reduce costs significantly on rent on an average salary?

CanuckExpat

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Re: Mustachian Renters - % of total take home income?
« Reply #29 on: March 24, 2013, 04:29:54 PM »
For people paying less than 20% - do you feel that your income is high enough that you're paying the median (average) rental income in your area.. or are actively trying to reduce costs significantly on rent on an average salary?

We about 15% take home in rent, and I would say for us it is more the former.
We don't live in a high rent area, but we live in a place that is bigger than we strictly need. We could find somewhere cheaper, but of the things to splurge on, I find housing to be a nice choice.

mlipps

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Re: Mustachian Renters - % of total take home income?
« Reply #30 on: March 24, 2013, 04:34:40 PM »
For people paying less than 20% - do you feel that your income is high enough that you're paying the median (average) rental income in your area.. or are actively trying to reduce costs significantly on rent on an average salary?

We have a fairly high income in a high COL area, but choose to live in a safe but not trendy neighborhood.

mm31

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Re: Mustachian Renters - % of total take home income?
« Reply #31 on: March 24, 2013, 09:01:28 PM »
For people paying less than 20% - do you feel that your income is high enough that you're paying the median (average) rental income in your area.. or are actively trying to reduce costs significantly on rent on an average salary?

The rental market is not that good where we live and we just were glad to find a place with insulation, enough light from outside, and that had a reasonable floor plan.

hoyahoyasaxa

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Re: Mustachian Renters - % of total take home income?
« Reply #32 on: March 24, 2013, 09:04:20 PM »
We pay more than I'd like, but them's the breaks of living in NYC.  With my wife and my combined income, we pay about 26% of our take home pay.

Zikoris

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Re: Mustachian Renters - % of total take home income?
« Reply #33 on: March 24, 2013, 10:41:02 PM »
Quote
For people paying less than 20% - do you feel that your income is high enough that you're paying the median (average) rental income in your area.. or are actively trying to reduce costs significantly on rent on an average salary?

I make 36K and live in downtown Vancouver, and spend around 16% take-home on rent, so no way in hell am I paying average rent, or making anywhere near average income! I've always found cheap apartments everywhere I lived, to the amazement of a lot of people I know. Vancouver in particular has gazillions of low cost places that are very nice, like housing co-ops, secondary suites in homes, and heritage houses that have been renovated into five or six individual suites. Hell, I've never even had roommates, other than my live-in boyfriends.
« Last Edit: March 24, 2013, 10:42:46 PM by Zikoris »

bigchrisb

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Re: Mustachian Renters - % of total take home income?
« Reply #34 on: March 25, 2013, 02:46:17 PM »
1.8%.  I rent a house and sublet the rest of the rooms to housemates.  Makes my rent close to free.  1.8% includes a few vacancies over the last couple of years.  Excluding them its below 1%.

jnik

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Re: Mustachian Renters - % of total take home income?
« Reply #35 on: March 26, 2013, 08:23:55 AM »
For people paying less than 20% - do you feel that your income is high enough that you're paying the median (average) rental income in your area.. or are actively trying to reduce costs significantly on rent on an average salary?
Wikipedia only has the 2000 census figures, so I'm sure median income has gone up, but we're paying 11% of median income (vs. 15% of my take-home, again, post-deductions) in rent and we chose this place based largely on price. Where we were before was quite pricey with awful maintenance, and our options are somewhat limited because few places around here allow pets, so we actually wound up with a larger place (and yard, sigh) than we were wanting, but still saving money.

mobilisinmobili

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Re: Mustachian Renters - % of total take home income?
« Reply #36 on: March 26, 2013, 08:29:10 AM »
1.8%.  I rent a house and sublet the rest of the rooms to housemates.  Makes my rent close to free.  1.8% includes a few vacancies over the last couple of years.  Excluding them its below 1%.

Do you find it's much of a hassle?

Fletch

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Re: Mustachian Renters - % of total take home income?
« Reply #37 on: March 26, 2013, 09:42:51 AM »
Sigh, bring on the face punches for the person who voted 50%+ (includes utilities). I'll attempt to justify, but I still know it's absurd.
It is an unfortunate reality for entry level jobs in large cities, especially if you have a large dog, that rentals are COMPETITIVE, and group housing doesn't always work with pets. The absolute cheapest option I could find would still only bring it down to ~40% and for safety reasons wouldn't be feasible as a single woman.
On the salary side, I suppose I could finagle take home pay to reflect the non-salary benefits I get, like graduate schol tuition, gym membership, and metro benefits, in addition to better than average health and other insurance, and the benefits of the outside training and certification they pay for.
On the expenses side, I pay nothing for transportation because I can walk everywhere and don't have a car, nor do I need one. No debts from college, and will not have any from graduate school.
Even with the tiny salary and huge rent payment, I save about 15%; and if anything my lifestyle has deflated from college after I sold the car, stopped drinking as much, and got better about packing my own lunch. The point is, the absurdity of my rental situation is temporary (my salary will go up, and i wont be in this city forever) and allows me to keep all my other expenses low, so it's the trade off I make.


KatieSSS

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Re: Mustachian Renters - % of total take home income?
« Reply #38 on: March 26, 2013, 11:32:40 AM »
Sigh, bring on the face punches for the person who voted 50%+ (includes utilities). I'll attempt to justify, but I still know it's absurd.
It is an unfortunate reality for entry level jobs in large cities, especially if you have a large dog, that rentals are COMPETITIVE, and group housing doesn't always work with pets. The absolute cheapest option I could find would still only bring it down to ~40% and for safety reasons wouldn't be feasible as a single woman.
On the salary side, I suppose I could finagle take home pay to reflect the non-salary benefits I get, like graduate schol tuition, gym membership, and metro benefits, in addition to better than average health and other insurance, and the benefits of the outside training and certification they pay for.
On the expenses side, I pay nothing for transportation because I can walk everywhere and don't have a car, nor do I need one. No debts from college, and will not have any from graduate school.
Even with the tiny salary and huge rent payment, I save about 15%; and if anything my lifestyle has deflated from college after I sold the car, stopped drinking as much, and got better about packing my own lunch. The point is, the absurdity of my rental situation is temporary (my salary will go up, and i wont be in this city forever) and allows me to keep all my other expenses low, so it's the trade off I make.

I'm in almost the exact same situation you are! And yes, I'm a fellow DC resident. I do have student debt, but that will be gone this year. I've thrown down the gauntlet. My rent is a bit below 50% of my income, but like you, I could have had it around 40% but I don't want to live in a dangerous part of town. A single gal living alone has to consider safety, too. I figure I'm being very mustachian in other ways and the cost of rent at this time just can't be helped.

DanBrewMan

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Re: Mustachian Renters - % of total take home income?
« Reply #39 on: March 26, 2013, 12:07:16 PM »
I pay just under 20%, but it's expensive and we'll be moving soon.  Shooting for 15%.

bigchrisb

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Re: Mustachian Renters - % of total take home income?
« Reply #40 on: March 26, 2013, 01:41:15 PM »
Do you find it's much of a hassle?

Not really.  I got bored living alone, and struggled of the morals of being one person in a large house.  I'm happier with the housemates (provided you take long enough to find good ones) than when  I was living alone.

dfields

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Re: Mustachian Renters - % of total take home income?
« Reply #41 on: March 26, 2013, 02:20:13 PM »
Post-Taxes: I'm at 15% this year, down from 24% last year. I  moved in with roommates 2 months ago after living alone for 2 years, so a bit of an adjustment.

The_Dude

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Re: Mustachian Renters - % of total take home income?
« Reply #42 on: March 26, 2013, 06:44:48 PM »
I'm at 8% here.

I searched quite a while to find this place (2 bd, 2.5bth townhouse with 2 car garage) and am paying quite a bit below market average for my city though the specific area I live in is full of rental housing (lots of apartment complexes) but not the ghetto either.  Actually, where I live is even below market for the area within my city too.  It was quite a score.

Does anyone else have far higher standards for buying vs renting?  I'm happy living where I am as a renter but if I was buying and had to live here the next say 10 years there is no way I'd live in the neighborhood I do and ideally live in a SFH rather than townhome.  For some reason when I think of forking over a huge sum of money and losing flexibility to live wherever I want fairly easily my standards go way up.  So while I've been able to buy where I live for years I still can justify it.   

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Re: Mustachian Renters - % of total take home income?
« Reply #43 on: March 29, 2013, 02:33:04 AM »
I'm glad to hear that MM's are being smart with their money like The_Dude at 8%.

We own and have rental. If we had to move out of state, I would rent out my home and move into the smallest ((yet safe/close to work)) apartment I could find and either invest the difference of money saved or spend it on things that matter the most (travel, sports, games) with those you love & creating beautiful memories together.

Priority: spending money on [i]"experiences"[/i] and not "things". An apartment is just a place to sleep while the world is your backyard to explore.

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Re: Mustachian Renters - % of total take home income?
« Reply #44 on: March 29, 2013, 07:07:38 AM »
It's about 15% take home in our household.  We've thought of purchasing a townhouse or a small house but we have other plans in the next two years that may involve overseas.

Nothlit

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Re: Mustachian Renters - % of total take home income?
« Reply #45 on: March 29, 2013, 09:57:20 AM »
I'm not entirely sure how to define take-home pay. Is that after taxes? After payroll deductions for insurance premiums? After payroll deductions for retirement accounts?

Anyway, here are my numbers depending on how you calculate it:

20% of gross pay
26.5% of net pay after taxes
27% of net pay after taxes and payroll deductions for insurance
39% of net pay after taxes, payroll deductions for insurance, and payroll deductions for retirement (401a, 403b, HSA)

I live in the ridiculously overpriced Boston metro area.
« Last Edit: March 29, 2013, 10:00:57 AM by Nothlit »

matchewed

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Re: Mustachian Renters - % of total take home income?
« Reply #46 on: March 29, 2013, 10:31:54 AM »
I'd say take home pay is... well money you take home. :)

After taxes/insurance/pre-tax contributions. I personally I consider the money I put into my Roth IRA as take home as well. That's my take on it anyway.