Thursday, June 5, 2008

Budget gripes, part 2

The other problem is that these budgets seem too be written for someone living in ittsy-bittsy-town-USA.

Who only spends 30% on housing costs like rent or a mortgage?

If we did this is, we would need:

Average home price in my city: $762,260 (source: Money Magazine).
Average monthly payment: $4,448.34 a month
(Assuming 5.750% and 30 year fixed source:
That means you would be making $14,827.80 a month or $177,933.60 a year.

Ummm… I don’t know anyone who makes that much a year.

But what about us renters?

The average rent for a 2 bedroom apartment in March, 2005 in Pasadena*, was $1,209 per month.
According to the 30% rule you should be making $4,030 per month or $48,360 a year.

More reasonable, but still…you’re paying someone else’s mortgage.

*However, most of the apartments we actually wanted to live in were in the $2,000-$3,500 per month range. Pasadena, like most big cities, has some places you would NOT want to live in. So we're in more of the 50% range for our apartment!

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