Housing costs are the biggest expense most people face, so knowing how much you can afford to spend can be key to staying on top of your budget.
As a rule of thumb, financial planners commonly recommend spending no more than 30% of your gross income on housing, whether that's mortgage or rent costs.
This advice is often based on guidelines set in the 1980s by the U.S. Department of Housing and Urban Development, which defined spending beyond 30% as "housing cost burdened."
That means if you earn the U.S. median income of around $80,000, you should aim to keep your housing costs to $2,000 a month.
Considering that Americans are routinely spending more than 30% of their income on housing, the guideline can feel more like an ideal than a realistic rule of thumb.
Organizations:
U.S . Department of Housing, Urban
Locations:
U.S
![Media-Cldnry.S-Nbcnews.Com Image Upload Newscms Square_Profile.Jpg](/find/mix/0?q="Media-Cldnry.S-Nbcnews.Com Image Upload Newscms Square_Profile.Jpg"){kind=link}