Quote:
Originally Posted by ShaniFaye
last time I checked, Gross was before taxes, net is after taxes
so my percentage of my net pay is 33% that goes for rent and utilities
|
You are right, gross is before tax. I have to reply to Shani because she is right in the zone;
Financial planners use the rule of 1/3 to gauge your credit worthiness. If you are anywhere past 33% of GROSS income on rent (and required costs including property tax, insurance) then you are in a dangerous place - credit score speaking.
Now here is the funny part: They give the same 1/3 rule for debt-load management; So, technically speaking, your lending threshold is 1/3 NET income minimum payment. Kinda weird, but that's what I heard.
That said, I'm about 25%. I don't dig on fancy accommodations.