Hemidodge426 OP t1_iyfaq1j wrote on November 30, 2022 at 11:29 PM

Reply to comment by Grevious47 in Money Guy Show 25% Housing and 25% Investing by Hemidodge426

The thing is, is the MG is usually pretty transparent about the income stuff but not here. Like for instance they do say that if you are single and make under 100k a year you can include your employer match as part of your total 25%.

I agree with you income does obviously play a huge part if you crunch the numbers. It just seems odd to me that they are very transparent on income on some advice and not others. But you make a good point, they can't possibly give a one size fits all number here that makes sense for everything.

Grevious47 t1_iyfbiw1 wrote on November 30, 2022 at 11:35 PM

I mean in this case I think those numbers are meant as an upper bound not as a suggestion. IE you shouldn't spend more than 25% on a house, you shouldn't spend more than 8% on a car...not that you SHOULD spend that much. So it doesn't really make sense to expect to be comfortable if you are hitting what they are saying is the maximum for housing AND car.

Viewed that way my percentages of 14%, 2% and 40% all match up really...I don't spend more than 25% on housing, I don't spend more than 8% on a car. I do invest or save at least 25%. I don't think spending 8% on a car is meant to be a goal just meant to say if you are spending more than this you might want to reconsider. Again as a guideline.

As other posters have pointed out there are parts of this country where unless you are in the top 5% you are absolutely not spending only 25% of your income on housing. That just isn't a thing. Maybe Money Guys would suggest that means you are in an area that is overpriced for your income and you should try to move I don't know but I think they know that, they are just trying to give broadly applicable advice and not focus on the edge cases of very HCOL areas or very high or low incomes.