What is a good rule of thumb in budgeting your personal finances?
Monday, February 8, 2010 21:38
Posted in category Budgeting
In other words, how much of my income should be left over after installment payments…….vehicles, mortgage payments, etc.?? for savings? Wanting to buy a house and trying to figure what I can afford.
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cpowers21 says:
February 8th, 2010 at 9:43 pm
35% Housing
- Mortgage/Rent
- Repairs
- Taxes
- Utilities
- Insurance
15% Transportation
- Car Payments
- Gas
- Insurance
- Repairs
- Parking/Tolls
- Train/Bus Fees
25% Other Living Expenses
- Eating out
- Vacations
- Entertainment
- Clothing
15% Debt
- Student loans
- Credit Cards
- Personal Loans
10% Savings
That’s the reccommended break down for all your finances. But it isn’t the limits the mortgage lenders will figure. They generally figure your mortgage/insurance to be any where between 30% – 48% of your monthly income. Depends on your credit and such. It would be best to talk to some lenders and get a pre approval amount.
murphy51024 says:
February 8th, 2010 at 9:43 pm
It depends how much you earn, but a realistic target should be around 25%
Tom says:
February 8th, 2010 at 9:43 pm
Be realistic with yourself; a mortgage is a big investment over a long period of time.. if you can live within your means you’re doing well!
dukefan86 says:
February 8th, 2010 at 9:43 pm
Factor in how much you’ve saved for a downpayment and your emergency fund. Pay off as much debt as you can before buying a home, you’ll be glad you did!
Rainy says:
February 8th, 2010 at 9:43 pm
when I was saving up to buy my first home, before I was married I could barely save 8% after I married we committed 25% of our income to saving for a home(we felt it was more important than going out ) with in 2 years we were living in that home. by applying the savings to our mortgage after the purchase we paid off our home in only 8 yrs.
boston857 says:
February 8th, 2010 at 9:43 pm
10% – conservative savings plan to be used towards new home etc
10% – agressive investment plan towards retirement.
80% – consumed and applied towards living expenses including rent, credit card debt, student loans, auto loan, etc…
KitKat says:
February 8th, 2010 at 9:43 pm
First rule of thumb is that mortgage payments should be no more then what you take home in 2 weeks. I could not tell you what should be left over because those installment payements can vary greatly from person to person.
Go to a mortgage calculator online and fill it out and it will tell you what you can afford.
Drew says:
February 8th, 2010 at 9:43 pm
cpoers21 has a text book answer. What i try to due, is save 25% 25% on housing no debit 25 % other investments and 25% to play. This is on my net do ask about taxes you i would have a lot more. Also i give away about 10% usually out of good investments and the play money.
Believe it or not the 10% is probably the most importing.