It goes like this: 40% of income should go towards necessities (such as rent/mortgage, utilities, and groceries) 30% should go towards discretionary spending (such as dining out, entertainment, and shopping) - Hubble Money App is just for this. 20% should go towards savings or paying off debt.
The real estate rule of three states that three factors determine a property's suitability: Location, price, and condition. These are the three most important variables that determine a property's availability!
30-30-3 stands for 30 g of protein in your first meal, 30 g of fiber throughout the day and 3 probiotic foods every day (includes yogurt, probiotic cottage cheese, sauerkraut, apple cider vinegar in water, etc.
If you make $70k a year, you can afford to spend about $1,633 on a monthly mortgage payment — as long as you have less than $500 in other monthly debt payments. You may be able to afford a $302,000 home in a low cost of living area.
To afford a $700,000 house, you typically need an annual income between $175,000 to $235,000, depending on your financial situation, down payment, credit score, and current market conditions. However, this is a general range, and your specific circumstances will determine the exact income required.
That monthly payment comes to $36,000 annually. Applying the 28/36 rule, which states that you shouldn't spend more than around a third of your income on housing, multiply $36,000 by three and you get $108,000. So to afford a $500K house you'd have to make at least $108,000 per year.
In other words, if your monthly gross income is $10,000 or $120,000 annually, your mortgage payment should be $2,800 or less. $10,000 X 28% = $2,800 – maximum monthly housing costs. Lenders usually require housing expenses plus long-term debt to less than or equal to 33% or 36% of monthly gross income.
The 30/30/30 method involves eating 30 grams (g) of protein within the first 30 minutes of waking up, and following it up with 30 minutes of exercise. This method was first proposed by Timothy Ferriss in his book "The 4-Hour Body,"1 but was made popular by biologist Gary Brecka on TikTok.
Home-Buying Rule #3: Limit the value of your target home to no more than 3X your annual household gross income.
Corcoran's Golden Rule: a 2-Step Strategy
The first part is good advice for any real estate purchase: make a 20% down payment. The second part is renting the property out to tenants for enough to cover the mortgage, even if you don't profit initially.
A simple formula—the 28/36 rule
Here's a simple industry rule of thumb: Housing expenses should not exceed 28 percent of your pre-tax household income.
The Three Property Rule is defined under IRC Section 1031, which states that an exchanger or taxpayer executing a delayed exchange has 45 calendar days from the closing date of the sale of their relinquished property to formally identify a replacement property or properties.
While a 20 percent down payment is the traditional standard for purchasing a home, it is not mandatory and there are loan options that have much lower minimum requirements. Private mortgage insurance will likely be required with a down payment of less than 20 percent, which will add to your monthly payment.
Now, the rule says you should spend 70% on needs, 20% on savings, and 10% on wants. Christine Devane, CEO and cofounder of Brightfin, has seen this sentiment in her budgeting work.
The 80/20 rule is super simple: you focus on eating healthy foods 80% of the time and allow yourself to indulge in not-so-healthy foods for the remaining 20%. It's all about striking a balance—getting your body the nutrition it needs while still enjoying your favorite treats without feeling guilty.
Tim Ferriss, in The 4-Hour Workweek, flipped the script on productivity by applying the Pareto Principle—a concept that says 80% of results come from just 20% of efforts. It's a game-changer for anyone tired of the grind. What if we could focus only on what truly matters and let go of the rest?
The 3 x 30 routine stands for: 30 seconds of exercise. 30 seconds of stretching or rest. 30 minutes total, preferably in the morning so you get it done.
The 28% mortgage rule states that you should spend 28% or less of your monthly gross income on your mortgage payment (including principal, interest, taxes and insurance). To gauge how much you can afford using this rule, multiply your monthly gross income by 28%.
The Bottom Line. On a $70,000 salary using a 50% DTI, you could potentially afford a house worth between $200,000 to $250,000, depending on your specific financial situation.
FHA loans for higher DTI
FHA loans are known for being more lenient with credit and DTI requirements. With a good credit score (580 or higher), you might qualify for an FHA loan with a DTI ratio of up to 50%. This makes FHA loans a popular choice for borrowers with good credit but high debt-to-income ratios.
To afford a $400,000 house, you typically need an annual income between $100,000 to $125,000, which translates to a gross monthly income of approximately $8,333 to $10,417. However, this is a general range, and your specific circumstances will determine the exact income required.
If you're raising a family of four in 2024, you'll need a six-figure income in 26 U.S. states. That's more than half of America where you'll need to earn $100,000 or more annually to budget for and comfortably raise a family.
If you want to avoid mortgage insurance by putting 20% down, your down payment should be $100,000. If you plan to put 8% down (the median for first-time homebuyers) it would be $40,000. If you're a first-time homebuyer with an FHA loan and a 3% down requirement, you would need $15,000.