The maximum amount you should spend on housing if you make $80,000 annually.

Housing costs significantly influence how Americans allocate their budget.

Determining a reasonable amount to spend on housing has become more complex due to the recent increase in shelter costs.

If you earn the median household income of $80,000 a year, the traditional advice is to spend no more than 30% of your income on housing, which amounts to approximately $2,000 per month. However, this recommendation is often unattainable for many individuals, particularly in big cities where housing costs have skyrocketed the most.

The cost of renting a two-bedroom apartment has increased by 22% since August 2020, while home prices have surged by 45% across the U.S., according to the most recent CoreLogic Case-Shiller national home price data.

Nearly one-third of American households are "cost burdened," spending over 30% of their income on housing, according to the latest U.S. Census data.

How much people earning $80,000 can afford to spend on housing

Emmanuel Eliason, a certified financial planner in Colorado, suggests that when it comes to housing expenses, a more realistic standard might be in the range of 35% to 39%, although the ultimate goal should be to aim for the 30% rule of thumb over time.

It is advised by Eliason to avoid spending more than 50% of your income on housing as it puts "undue pressure" on your budget, restricting your capacity to save for future objectives or handle unforeseen costs.

Flexibility is crucial when it comes to housing costs as they are mostly fixed and difficult to negotiate.

What is the maximum amount you can contribute to monthly housing costs without exceeding certain limits if you make $80,000 annually?

• Without exceeding 30% of your monthly gross income, you should aim to save $2,000.
• Without exceeding 35% of your monthly gross income, you should aim to save $2,333.
• Without exceeding 40% of your monthly gross income, you should aim to save $2,667.
• Without exceeding 45% of your monthly gross income, you should aim to save $3,000.
• Without exceeding 50% of your monthly gross income, you should aim to save $3,333.

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