You shouldn't put more than x% of your paycheck into.. - Tilted Forum Project Discussion Community

passthru · 01-03-2007, 06:19 PM

I know there are certain percentages you shouldn't exceed for things like housing and a car. I think housing is around 25% of your gross monthly income, is that correct? I'm moving soon and want to double check that.. and if anybody has additional opinions, feel free to give those too.

It might be handy in general to have some basic financial planning stuff listed for easy reference. I have a Dummy series financial book in the mail and I'll add whatever I can as I read it.

kurty[B] · 01-03-2007, 07:36 PM

When looking for a home loan I know banks do not want to see you spending more than half of your pre-tax income on debt (i.e. - home, car, credit cards, and such). I agree with that, but the main thing I think is to do what works best for you to get by. What's your financial goal?

BigBlueWrecking · 01-07-2007, 04:24 PM

You debt to income ratio should never really exceed 30%. Lenders will give you more, but that does not mean you should take it!

ngdawg · 01-08-2007, 07:02 AM

When I worked at a bank, it was a general rule that mortgages should not be over 28% of reported income.
If you've got a few credit cards, consolidate them now into one(store cards are the devil); leave major credit card available balances alone-the debt to available ratio looks better if the amount owed is a small percentage of what's available,ie; you have a $10k credit card but only owe $1000.
Get a credit report, look it over and make sure there's no old loans or credit cards still hanging on and that there's no late payments reported, things like that. The higher your credit rating, the better the mortgage deal you'll receive.
Go over all monthly expenses and see what you could comfortably afford to lay out each month for mortgage. Keep in mind you will also have to figure into that amount your property taxes and home owner's insurance. A general good estimation is to allow 1-2% of whatever you decide to finance as your mortgage-most times banks or lending institutions will triple your annual salary to come up with an approximate amount of what you conceivably can afford.
So, if your salary is $70k a year, you can 'afford' a mortgage of 210,000, or about $2100 a month.

newtx · 01-08-2007, 09:22 PM

Plan early to save. Try to save something every month. Try to save @ least 10% every month. if you fail and only save 5% you are way ahead of most people.

Boo · 01-09-2007, 01:44 AM

Until you have 3 months pay saved up you have no reason to be buying any luxuries. Thats the first year. Year 2 requires 3 more months. And so on....

At age 30 you should be able to shit $10,000 in 2 hours time. At age 40 $20,000 and so on...... These are 1980 numbers ... add for inflation.

Percentages are for banks. You need to invest like you are going to live forever.

Maintain the highest credit rating that you can at ALL times. It takes too long to rebuild bad credit.

Abusing credit cards, NEVER:
Put dinner on a card.
Buy tobacco or alcohol on a card.
Put a tattoo, jewelry, music, audio/visual equipment on a card.

If you have to put emergency car repairs on a card, pay them off ASAP while saving for the next emergency.

Keep telling yourself:
You don't earn a living, you live on what you earn.

01-03-2007, 06:19 PM	#1 (permalink)
passthru Addict Location: Portland, OR	You shouldn't put more than x% of your paycheck into.. I know there are certain percentages you shouldn't exceed for things like housing and a car. I think housing is around 25% of your gross monthly income, is that correct? I'm moving soon and want to double check that.. and if anybody has additional opinions, feel free to give those too. It might be handy in general to have some basic financial planning stuff listed for easy reference. I have a Dummy series financial book in the mail and I'll add whatever I can as I read it.

01-08-2007, 07:02 AM	#4 (permalink)
ngdawg peekaboo Location: on the back, bitch	When I worked at a bank, it was a general rule that mortgages should not be over 28% of reported income. If you've got a few credit cards, consolidate them now into one(store cards are the devil); leave major credit card available balances alone-the debt to available ratio looks better if the amount owed is a small percentage of what's available,ie; you have a $10k credit card but only owe $1000. Get a credit report, look it over and make sure there's no old loans or credit cards still hanging on and that there's no late payments reported, things like that. The higher your credit rating, the better the mortgage deal you'll receive. Go over all monthly expenses and see what you could comfortably afford to lay out each month for mortgage. Keep in mind you will also have to figure into that amount your property taxes and home owner's insurance. A general good estimation is to allow 1-2% of whatever you decide to finance as your mortgage-most times banks or lending institutions will triple your annual salary to come up with an approximate amount of what you conceivably can afford. So, if your salary is $70k a year, you can 'afford' a mortgage of 210,000, or about $2100 a month. __________________ Don't blame me. I didn't vote for either of'em.

01-09-2007, 01:44 AM	#6 (permalink)
Boo Leave me alone! Location: Alaska, USA	Until you have 3 months pay saved up you have no reason to be buying any luxuries. Thats the first year. Year 2 requires 3 more months. And so on.... At age 30 you should be able to shit $10,000 in 2 hours time. At age 40 $20,000 and so on...... These are 1980 numbers ... add for inflation. Percentages are for banks. You need to invest like you are going to live forever. Maintain the highest credit rating that you can at ALL times. It takes too long to rebuild bad credit. Abusing credit cards, NEVER: Put dinner on a card. Buy tobacco or alcohol on a card. Put a tattoo, jewelry, music, audio/visual equipment on a card. If you have to put emergency car repairs on a card, pay them off ASAP while saving for the next emergency. Keep telling yourself: You don't earn a living, you live on what you earn. __________________ Back button again, I must be getting old.

01-03-2007, 07:36 PM	#2 (permalink)
kurty[B] Sauce Puppet	When looking for a home loan I know banks do not want to see you spending more than half of your pre-tax income on debt (i.e. - home, car, credit cards, and such). I agree with that, but the main thing I think is to do what works best for you to get by. What's your financial goal?

01-07-2007, 04:24 PM	#3 (permalink)
BigBlueWrecking Psycho	You debt to income ratio should never really exceed 30%. Lenders will give you more, but that does not mean you should take it!

01-08-2007, 09:22 PM	#5 (permalink)
newtx Addict	Plan early to save. Try to save something every month. Try to save @ least 10% every month. if you fail and only save 5% you are way ahead of most people.