US federal rental subsidies require the client to pay 30% of
"monthly adjusted income" and they make up the rest.
Thats a fairly typical number for people spending
all their income.

"One Man Rodeo" <do_not_spam_me[at]I_am_poor.net.easynews.com> Well I'm not looking for specific information but
- quote -

A survey to ascertain some kind of average of what people
actually do right now is very different from a rule of thumb
that a person should use to guide how much to spend on
housing in the future. As you note below, many people are
not preparing for their retirement well at all. Professional
surveys support this reality. So why do you care about what
others do, when so many are reckless with their spending?

- quote -

What do you think the purpose of a certain spending
rule-of-thumb is? It has to be some financial goal, else
there's no point. For example, a rule of thumb that has some
value IMO is one bandied around here a lot: What fraction of
one's monthly income should one put towards retirement?
Using a number of assumptions (40 year timeframe; 10% return
on money invested; wants to be able to draw down from
principal in retirement without ever exhausting it), the
number is around 15%.

For many young people, I think this is a good starting
point. It helps them focus on what should be guiding their
monthly financial planning.

- quote -

Bah, banks are in business to make money. In the last
several years many have become notorious for qualifying
people who should not have been qualified, or, in the
alternative, giving them these "creative financing" (e.g.
interest only) home loans which are not to their clients'
advantage. The banks' guidelines are unrelated to what their
clients' should be.

One Man Rodeo wrote:
- quote -

LOL. Glad you enjoyed the BLS table - I didn't know your age, but I
guessed you might get a kick out of seeing your savings rate stacked up
against the high end people (some of them are smart, too).

Hey, I've been wondering the same things. Although maybe different
questions, I thought I had an exclusive on the Club of Not
Understanding - my own private table, literally. I'd like to know how
people younger than myself, that I *know* make less than I do, can come
up with the pair to ante up 700k for a glass & concrete condo and a
911(?) Howhowhowhow? What are they thinking??? I'd also like to know
what it is with women and their phone numbers. Gees - you'd get the
impression it was their duty to safeguard the original copy of The
Constitution - regardless of your motives in asking.

Back to your topic ... http://www.bls.gov/ncs/ocs/sp/ncar0002.pdf It
gives average income for 400+ job categories. It may just add to the
mystery. The 5 mil, sorry to say, sounds like a good target to shoot
for. Benjamin Graham "Security Analysis" (read it) may help you exceed
that. I know you're not asking for personal financial advice, but I
couldn't resist mentioning it. It's the original foundational work for
all the "investment models" around today. The 4th edition is available.
I don't know where to find the 1934 edition.

I sincerely doubt many will reach 5 mil. You came up with a good
description: people who have "... the means to save for their future
decide not to and elect to spend it now. " I drive a 1995 Caddy. In my
estimation, I'd be nuts to buy a 911. I figure a car should be less
than 10% of the house.

I spend 25% of my income on housing costs - which includes all
utilities, cable TV, subscriptions, and auto insurance. Owning a home
can be a big plus because you lock in a major cost of living. Maybe
home prices will fall, before I buy something. There are other factors
with me personally, like where I want to live, but I'm living in a
two-story townhouse, next door to the condo I mentioned, and I'm paying
less than half the money. My clothes dryer doesn't work ... tch ... I
called the management. One day I will buy a house, to lock in a
standard of living, but not today. Price drops in houses so far are
more than 2 years rent. (Don't tell anyone, OK?)

There's a counter-part to how people spend, and that's found on proxy
statements showing executive compensation. It's too small a percentage
of the population to be of statistical or economic significance, but
I'd like to ask some of them what qualifies them to manage a company if
they cannot manage their own budget on anything less than 10 mil a
year? How much is enough? 40m? 140m? Does it make sense anymore? I
respect others privacy, and I know those guys are making out checks in
the millions to the IRS, but still ... what is the mentality driving
money, these days? I see it as the same question you're asking, and I'd
like to know the answer. Maybe your approach is better, asking how
people who can't afford even one, buy two.

Sorry I can't help much ... if I change my mind and start spending
everything I make, I'll explain my rationale.

jIM wrote:
snip
- quote -

And yet, in a city where the job and most places to go are within
walking distance or public transportation, 40-50% for an apartment
(including utilities) may not be too much. For every rule of thumb,
there's an exception. You are right, it's more important to see what's
saved than to worry about what percent goes where.
JOE

"dapperdobbs" <GeorgeCFL[at]hotmail.com> wrote in message
news:1157419585.821273.20890[at]i3g2000cwc.googlegroups.com...
- quote -

Holy crap. I am 17.4 years younger than the average age of that upper
quintile and also 1.1 earners less in the houshold than that same upper
quintile. However 91 percent of that same quintile own their home while I
rent. 41 percent of the lowest quintile are homeowners so I assume that
means approx 59 percent are renters.

"dapperdobbs" <GeorgeCFL[at]hotmail.com> wrote in message
news:1157419585.821273.20890[at]i3g2000cwc.googlegroups.com...
- quote -


Great website and thanks for the pointer. I love the info!!!!

Personally this question came up as a result of having to listen to my
co-workers and a few friends bitch about not having money and living cheque
to cheque. Personally I'm happy with my savings rate and financial planning
but why are so many people unhappy and it seems that there are so many easy
ways to save for many (not all but many) people?? So I'm thinking as I
drive home where do some of these people spend their money and more
importantly trying to guesstimate what they spend on needs and wants etc.
It's only out of curiosity I was asking about this topic.

AFAIK I'm the only guy I know planning and actually trying on being worth 5
million dollars in 30 years. The only way I can get there is if I save 55%
of my take-home income and get at least 8% returns on my investments while
hoping inflation stays below 4% and my taxes below 31%.

Cheap housing will get me a good start. Will it do the same for others?

"Elle" <honda.lioness[at]nospam.earthlink.net> wrote in message
news:iD3Lg.15008$Qf.13757[at]newsread2.news.pas.earthlink.net...
- quote -

Well I'm not looking for specific information but generalities. An informal
survey so to speak. Some of the people I am thinking of are married and
some are due to retire. One good friend is saving for her house.

What do financial goals have to do with what a rule-of-thumb amount should
be? Some people have no financial goals. I personally have financial
goals but many people I know don't.

But the question I am asking is what sort of thrown out percent would be
wise to spending on Renting and the direct utilities of renting. For
example the bank tells us that they will qualify you for a mortgage if you
can afford to spend up to 36% of your income on a mortgage and 45% of your
income for maintaing your property and housing bills, or something to that
effect. That is a rule of thumb percentage I was seeking for Renters and
their direct housing bills.

"jIM" <noreplysoccer[at]hotmail.com> wrote in message
news:1157467767.306618.84160[at]i42g2000cwa.googlegroups.com...
- quote -

Well I am trying to guess how "other" people get by. In other words I'm
wondering why so many people I know live paycheque to paycheque and yet
others I know who have the means to save for their future decide not to and
elect to spend it now. Some of these people spend 50% of their income on
housing, others only 30%. Many own, a few that I have in mind rent. One
person I know saves about 70% of her take home income.

I only used my current figures as an example. Those numbers are going to
drastically change in a few months but I know what my comfort levels are. I
was wondering where the people I know of fit in on the savings and financial
planning chart. How do others go about spending for today's needs while
planning to cover tomorrow's needs. That's why I asked for the
rule-of-thumb or "common" answers.


======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. "Trim" means that except for a FEW lines to add context, the previous post is deleted.

One Man Rodeo wrote:
- quote -

I would reverse some of the logic as part of this analysis... after all
expenses, how much of your GROSS PAY can you save? 10%, 20% 30% etc...
You suggest 33%, which is well, well above Excellent. If the 33% is
maintained, most other expenses will "fall in line" because you are
spending much less than you earn.

I am guessing that 50% of income on rent or housing is just TOO HIGH.
18-22% sounds excellent, with 30% being "normal" and 40% "pushing it".

"One Man Rodeo" <do_not_spam_me[at]I_am_poor.net.easynews.comwrote
- quote -

This depends on your financial goals, short term and long
term. E.g. are you trying to save to buy a house? Marry and
have children? Retire a.s.a.p?

There's no reasonable answer here without a lot more
information.

The Bureau of Labor Statistics - I think I have it memorized as
www.bls.gov has tables showing 2004 Expenditures per consumer unit.
This was discussed in a recent thread, but in summary, the average is
about 30% for housing. The tables might be of interest to you as they
break out categories of expenses extensively. Your savings rate is
comparable to those of the upper quintile, but it would be worth it for
you to know that rate before making changes to spend more, and run
spreadsheets showing your accumulated savings at your estimated age of
retirement (then discount that by an estimated rate of inflation,
probably 3%).

Just wondering what a rule of thumb percentage be for Renters: What percent
of take-home income should be spent on housing and utilities' bills related
to housing if you rent?

15%?, 25%, 40%? For example I spend 18% to 22% on Rent, electricity, water,
and heating-a/c. My secondary utilities such as phone line, cable and
internet take another 5%. To put in perspective my food bill is about 5 to
8% of my take-home pay and gasoline is 10%.

I will say this as well that my savings rate is a min. 33% to 45% depending
on what I take home that month (I'm in sales).

Now I'm thinking of making a dramatic move in the near future, however I'm
not necessarily asking this question for me but out of curiosity and debate.
Basically I'm trying to gauge how others around me that rent "pay the bills"
and in particular why some of those other renters cry about a lack of
disposable income. of course I'm not about to ask them directly why unless
they are very very close friends who feel comfortable discussing financial
matters.

Remember I'm just thinking rule of thumb and I wouldn't expect concrete
answers of course.