oledawgnew t1_iyehkwe wrote on November 30, 2022 at 8:12 PM

> For fun I did a mock budget of my take home pay after 25% investing and 25% house payment and with taxes, insurance out of the way and all that, I only had enough money to cover my typical expenses and had no margin at all for anything "fun" or even short term savings goals.

So it's apparent then that Money Guy's numbers are base on an income that's greater than yours. All of the popular money "experts" advice is based on generalities. You take the advice and adjust your percentages to meet your personal financial situation. The money experts also cannot account for every municipality in the U.S. I'm sure someone making median income in San Diego (may not be still be current but I used this and this as sources) would be hard-pressed to find adequate housing for 25% of their income.

Hemidodge426 OP t1_iyem4ie wrote on November 30, 2022 at 8:41 PM

I don't think they have ever said that the rules they have set apply to X income and up. Regardless though, I do think the advice they give is "aspirational" like another comment has said, not necessarily that if you don't do that exactly you are going to fail. I feel like I make a decent income at 110k in a relatively lower cost of living area, I just am having a hard time penciling out how to follow their advice and not be a miser at the same time. Maybe as a single person I'm not seeing the same kind of deductions that a married couple would be granted. I don't know.

Grevious47 t1_iyf3tyv wrote on November 30, 2022 at 10:39 PM

>I don't think they have ever said that the rules they have set apply to X income and up.

But yet it obviously is based on income. I mean you seem like a smart person, take some time to think about it. What would that percentage budget mean for someone making 30k versus 300k.

When gurus like this give advice they HAVE to give generic advice because they aren't talking to you, they are talking to literally anyone who watches them. So their advice is given to fit with the mean basically, so that in a random set the advice will be decent for most people. That doens't mean its good for everyone. The concepts are sound, but never just blindly apply percentages to your savings or budgets,

Hemidodge426 OP t1_iyfaq1j wrote on November 30, 2022 at 11:29 PM

The thing is, is the MG is usually pretty transparent about the income stuff but not here. Like for instance they do say that if you are single and make under 100k a year you can include your employer match as part of your total 25%.

I agree with you income does obviously play a huge part if you crunch the numbers. It just seems odd to me that they are very transparent on income on some advice and not others. But you make a good point, they can't possibly give a one size fits all number here that makes sense for everything.

Grevious47 t1_iyfbiw1 wrote on November 30, 2022 at 11:35 PM

I mean in this case I think those numbers are meant as an upper bound not as a suggestion. IE you shouldn't spend more than 25% on a house, you shouldn't spend more than 8% on a car...not that you SHOULD spend that much. So it doesn't really make sense to expect to be comfortable if you are hitting what they are saying is the maximum for housing AND car.

Viewed that way my percentages of 14%, 2% and 40% all match up really...I don't spend more than 25% on housing, I don't spend more than 8% on a car. I do invest or save at least 25%. I don't think spending 8% on a car is meant to be a goal just meant to say if you are spending more than this you might want to reconsider. Again as a guideline.

As other posters have pointed out there are parts of this country where unless you are in the top 5% you are absolutely not spending only 25% of your income on housing. That just isn't a thing. Maybe Money Guys would suggest that means you are in an area that is overpriced for your income and you should try to move I don't know but I think they know that, they are just trying to give broadly applicable advice and not focus on the edge cases of very HCOL areas or very high or low incomes.

Reader47b t1_iyex0aj wrote on November 30, 2022 at 9:51 PM

They may not say it, but it's quite obvious that essentials (housing, grocery, utilities, insurance, health care, etc.) take up a larger percentage of the income of someone at the median than of someone in the top 10%. It's also quite obvious that if you are supporting 4 people vs. 1, essentials will take up a much larger share of your income. It seems to me a lot of these gurus assume everyone is childless and making 6 figures.