![]() This is not especially sustainable in California! In other states, where housing is less expensive, this is a more realistic goal. ![]() But, you first have to pay your federal and state taxes, and that would actually only leave about $830 per month for a mortgage. I’m a Financial Planning Expert: Here Are 5 Things You Should Never Spend Money on If You Want To Be RichĪccording to The Motley Fool, if you make $50,000 a year, and you live in the pricey state of California, you might think that means you can afford to pay $1,041 per month on a mortgage (though, frankly, there are few California cities where you can find mortgages that low). Note: Dave Ramsey, author of Financial Peace, states that the suggested percentages below are only recommended percentages and will change dramatically if. To put this into perspective, Ramsey explains that if you take home $5,000 per month after taxes, according to his 25% rule, you should pay no more than $1,250 per month for a mortgage payment (and that includes the principal payment, property taxes, HOA fees and interest). And the only way to do that is to understand your home-buying budget and stick to it!” As Ramsey says on his website, “I want you to buy a home that’s a blessing, not a burden. This 25% figure should come out of your net pay, the money you have left after other deductions such as taxes, retirement contributions or benefits have been taken out of your income. In other words, you will not find yourself stuck with a mortgage payment you can’t pay, or not on time. The reason Ramsey suggests this is that if your mortgage is no more than 25% of your income, you should be able to pay for all the rest of your expenses each month without a problem. This advice varies a bit among experts, but Ramsey caps this amount at 25%. One of Ramsey’s strongest pieces of financial advice centers on how much of your money you should put toward a mortgage payment each month, which, for many people, is the biggest monthly bill they have. More: Which Bank Gives 6% Interest on Savings Accounts? Jaspreet Singh on the 75/15/10 Rule: This Is How the 1% Manage Their Wealth Finally, he’s CEO of his own company, Ramsey Solutions. He also hosts “The Ramsey Show,” where he dishes out practical advice on everything from budgets to retirement, and appears on numerous TV shows doing the same. The 70/20/10 budget rule works by allotting 70% of your income for monthly bills and everyday spending such as cell phones, groceries or utilities, then 20% goes to saving and investing and 10% goes to debt repayment.In the world of financial advice, one of the top experts is fast-talking Dave Ramsey, a personal finance expert who has made a name for himself by publishing eight books on finance.-Transportation or auto services: 10-15%.Here is the Dave Ramsey budget breakdown: Food 5 to 15. ![]() If you are new to all of this, you can try his method out. ![]() If that’s too much pressure, then skipit and try the 50/30/20 method. The Dave Ramsey recommended budget percentages are a simple yet effective way of coming up with your budget plan. If you like to have all the details in front of you and create spreadsheets, then the Dave Ramsey Recommended percentages will serve you well. It really is all about personal preference.
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