You're supposed to spend less than 30% of your income on housing. We asked 8 women to see if they do.

How much house can I afford? This common question is asked by many first time homebuyers and renters; luckily The 30% Rule can help.

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It's a recommendation thrown out by financial planners everywhere: In a perfect world, you spend 30% (or ideally less) of your gross pay on housing. (We repeat, in a perfect world.) Where did this equation come from? It's actually a ratio the government has been using since 1981—spend any more on housing and you could find yourself "cost-burdened," according to the US Census Bureau.

This got us curious: How many people are making this recommended ratio a personal budgeting rule? We asked 8 different people (single and coupled up) to weigh in and do the math on their monthly housing costs. The results: The women we know are—for the most part—staying well below the 30% mark. Bravo, ladies!

Home ownership dreams

Household income: $100,000
Monthly rent/mortgage: $1,750
Percentage spent on housing: 21%
Location: New York

"Even though we spend less than 30% on housing, it can still feel like a lot. We're trying to save for a house, so we try to cut other expenses—like eating out—where we can."

When cohabitation is financially beneficial

Household income: $190,000
Monthly rent/mortgage: $2,400
Percentage spent on housing: 15%
Location: Pennsylvania

"I'm tempted to give you my numbers before I moved in with my boyfriend. The ratio was definitely not so good!"

But think of the childcare costs...

Household income: $140,000
Monthly rent/mortgage: $3,290
Percentage spent on housing: 28%
Location: California

"This monthly payment is hard for us, mostly because we have significant childcare costs. Once our kids are in public school, we expect to feel less crunched, month to month."

The one with the huge down payment

Household income: $105,000
Monthly rent/mortgage: $1,415
Percentage spent on housing: 16%
Location: New York

"To be fair, I put close to 50% down when we bought our house, so we have an unusually low mortgage."

The one who pays half her salary in rent

Household income: $43,000
Monthly rent/mortgage: $1,750
Percentage spent on housing: 50%
Location: New York

"Yes, the ratio is burdensome. I guess that's the payoff for living in New York!"

The high-earners with the solid mortgage

Household income: $325,000
Monthly rent/mortgage: $3,400
Percentage spent on housing: 13%
Location: Ohio

"We have a 15-year mortgage, and I certainly don't find this ratio burdensome."

When the house *is* the investment

Household income: $165,000
Monthly rent/mortgage: $3,114
Percentage spent on housing: 23%
Location: Maryland

"Being in our home makes us so happy. And we love knowing we're building equity each month."

Buying a home to lower the ratio

Household income: $215,000
Monthly rent/mortgage: $2,300
Percentage spent on housing: 13%
Location: Washington

"There was one point where we were paying 30% of our income toward housing, but after buying, our value went up—as did our taxes and income."

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Article copyright 2018 by PureWow. Reprinted from the November 9, 2018 issue with permission from PureWow.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
This reprint is supplied by Fidelity Brokerage Services LLC, Member NYSE, SIPC.
The third-party provider of the reprint permission and Fidelity Investments are independent entities and are not legally affiliated.

Votes are submitted voluntarily by individuals and reflect their own opinion of the article's helpfulness. A percentage value for helpfulness will display once a sufficient number of votes have been submitted.

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