What percentage of your take home do you spend on your mortgage & tax every month?

[Anonymous]

Anonymous wrote:

Anonymous wrote:40% of net. I thought the rule was for gross. We are 25% of gross.

Yeah, but that rule is what gets people in trouble. 40% of net is a lot. What would happen if one or both of you lost your jobs?

some of us are in careers that are in demand.

[Anonymous]

Anonymous wrote:

Anonymous wrote:eh, it's hard to use any guidelines off of net. Most guidelines you see are something like 28-33% of gross for mortgage and no more than 36% max for all debts. Net changes dramatically for individuals depending on tax witholdings, health care costs, retirement contributions, etc etc etc.

+1. Not sure why people are posting in net.

Because some of us are more financially conservative than others in this respect. We are at 15% of gross/25% of net and bought about $175K less worth of house than we were approved for. Lenders don't take into account things like childcare and other household expenses when calculating your approved loan amount. It was people buying at 100% of their approved max limit and not taking into account other household expenses that brought down the housing market in the first place.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:40% of net. I thought the rule was for gross. We are 25% of gross.

Yeah, but that rule is what gets people in trouble. 40% of net is a lot. What would happen if one or both of you lost your jobs?

some of us are in careers that are in demand.

So am I, but nothing is guaranteed. I'd rather be conservative.

[Anonymous]

Anonymous wrote:I post in net because I only budget off of the money I can actually use to pay bills. We don't see the money we pay toward health insurance or into a couple of our retirement funds in our band account.

Our mortgage is about 30% of our monthly take home. It is tighter than I would like, but we manage. We had to cut some of our savings last year when I was cut back in hours last summer because of a dry spell for my company, but we were able to make our mortgage on just my DH's salary.

+1 to this. You are smart PP.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I post in net because I only budget off of the money I can actually use to pay bills. We don't see the money we pay toward health insurance or into a couple of our retirement funds in our band account.

Our mortgage is about 30% of our monthly take home. It is tighter than I would like, but we manage. We had to cut some of our savings last year when I was cut back in hours last summer because of a dry spell for my company, but we were able to make our mortgage on just my DH's salary.

+1 to this. You are smart PP.

But it makes it impossible to compare what you're paying to others, so what's the point of this post? Someone can pat themselves on the back for being at 15% of net, but if they aren't netting out any retirement, any health insurance, etc. then I would say they are financially unsound.

[Anonymous]

Anonymous wrote:

Anonymous wrote:eh, it's hard to use any guidelines off of net. Most guidelines you see are something like 28-33% of gross for mortgage and no more than 36% max for all debts. Net changes dramatically for individuals depending on tax witholdings, health care costs, retirement contributions, etc etc etc.

+1. Not sure why people are posting in net.

In the subject line, the OP did ask what percentage of your 'take home'...

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:eh, it's hard to use any guidelines off of net. Most guidelines you see are something like 28-33% of gross for mortgage and no more than 36% max for all debts. Net changes dramatically for individuals depending on tax witholdings, health care costs, retirement contributions, etc etc etc.

+1. Not sure why people are posting in net.

Because some of us are more financially conservative than others in this respect. We are at 15% of gross/25% of net and bought about $175K less worth of house than we were approved for. Lenders don't take into account things like childcare and other household expenses when calculating your approved loan amount. It was people buying at 100% of their approved max limit and not taking into account other household expenses that brought down the housing market in the first place.

I have no idea why you think someone who budgets off of gross automatically bought at their max and didn't take into account other household expenses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I post in net because I only budget off of the money I can actually use to pay bills. We don't see the money we pay toward health insurance or into a couple of our retirement funds in our band account.

Our mortgage is about 30% of our monthly take home. It is tighter than I would like, but we manage. We had to cut some of our savings last year when I was cut back in hours last summer because of a dry spell for my company, but we were able to make our mortgage on just my DH's salary.

+1 to this. You are smart PP.

well, shucks I think it just seems very common sense, right? Money in the bank is the money you work with. Since our HHI is not all that high for this area, we try to do our best to pay the bills and also put some money aside. Buying a house has stretched us a bit, but rent would have been about the same as our mortgage payment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:40% of net. I thought the rule was for gross. We are 25% of gross.

Yeah, but that rule is what gets people in trouble. 40% of net is a lot. What would happen if one or both of you lost your jobs?

some of us are in careers that are in demand.

So am I, but nothing is guaranteed. I'd rather be conservative.

Life's too short to be conservative. Conservatives generally are narrow-minded thinkers and live cautious, unfulfilling, and sheltered lives. Not for me.

[Anonymous]

Anonymous wrote:Is anyone sticking to that 20-25-30% guideline these days?

We're at 12% of gross, but we've been in this house for 8 years and our incomes have doubled, so it was 25% of gross when we bought.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I post in net because I only budget off of the money I can actually use to pay bills. We don't see the money we pay toward health insurance or into a couple of our retirement funds in our band account.

Our mortgage is about 30% of our monthly take home. It is tighter than I would like, but we manage. We had to cut some of our savings last year when I was cut back in hours last summer because of a dry spell for my company, but we were able to make our mortgage on just my DH's salary.

+1 to this. You are smart PP.

But it makes it impossible to compare what you're paying to others, so what's the point of this post? Someone can pat themselves on the back for being at 15% of net, but if they aren't netting out any retirement, any health insurance, etc. then I would say they are financially unsound.

I think the point of PP's post was that s/he is funding health insurance and retirement funds, as am I, and was basing her mortgage amount on what was comfortably left in her budget. Pretty sure we are both financially sound in that respect.

[Anonymous]

risk avoidance is avoidance of sucess

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:40% of net. I thought the rule was for gross. We are 25% of gross.

Yeah, but that rule is what gets people in trouble. 40% of net is a lot. What would happen if one or both of you lost your jobs?

some of us are in careers that are in demand.

So am I, but nothing is guaranteed. I'd rather be conservative.

Life's too short to be conservative. Conservatives generally are narrow-minded thinkers and live cautious, unfulfilling, and sheltered lives. Not for me.

Are you serious? Personal financial conservatism has nothing to do with politics.

[Anonymous]

Anonymous wrote:risk avoidance is avoidance of sucess

Boy, there are a lot of uneducated platitudes being thrown around on here. I am not risk averse. I am smart. I am 100% risk tolerant in my investments because I have a long time horizon for retirement and I can afford to be. But in terms of household budgeting, I refuse to mortgage myself to the hilt at the expense of retirement, savings, investment - and yes, the ability to have money for fun. We have chosen to do it all because we did not buy anywhere near the top of our approved amount. What is not to understand here?

[Anonymous]

Anonymous wrote:

But it makes it impossible to compare what you're paying to others, so what's the point of this post? Someone can pat themselves on the back for being at 15% of net, but if they aren't netting out any retirement, any health insurance, etc. then I would say they are financially unsound.

sure, but we aren't comparing health insurance plans or retirement funding, right?

Of course not having health insurance or retirement accounts isn't financially sound. I said in my post "a couple of our retirement accounts" were not included in my net calculations - we have others we contribute to out of our net each month (my roth and a couple other investment vehicles). In a pinch, those are the first things we can scale back. Luckily, we have that leeway. Many don't and live 100% paycheck to paycheck with zero cushion.