I've Paid $1450 or Less For Housing The Last 7 Years, While My Income Only Increases
All of us are intelligent, but we frequently fall for dumb money traps
Table of Contents
The income trap.
The 3 largest expenses.
Create economic immunity.
Why the 28% housing rule is whack.
Though my income has increased, my housing costs have remained the same the past several years while also living in several different states— somewhere between $600-$1450—and I love the shit out of the price tag.
In 2017, I paid $1450.
In 2018, I paid $800.
Between 2019-2021, I paid $1450.
In 2022, I paid 600-700.
The 3 Largest Expenses
Housing
Food
Car
Housing expenses will usually always be numero uno.
Where and how you decide to live has astronomical effects on your finances—positive or negative.
Many people living in high-cost areas such as San Francisco and New York are doing so at the expense of their bank accounts.
Great memories last a lifetime, but not small bank accounts.
Not living smack dab in the middle of a city—especially one of my favorites, like New York—saves quite a bit of change.
Inflation and living costs will always rise, but certain cities’ prices will always rise faster.
Other ways to save on housing:
Trailer life.
Live with roommates.
Downsize your current home.
That 28% Housing Rule Is Whack.
Despite my income increasing, my housing costs (frequently the priciest expense for most families) have frequently remained the same or less.
Everyone says your housing costs should never exceed 28%.
But, what if your housing costs never exceed far less of your total income…like single-digit percentages?
Why would I give 30% of my income to housing?
Sounds like a scam to me.
I’ve always firmly believed in extremely low percentages for cars and housing. I don’t desire to have anything take a massive chunk of change from my budget unless I’m ready to blow money.
Challenge: Keep housing costs 10% of your monthly net income.
The Income Trap—Never Enough
My home is beautiful, but I still could’ve stayed somewhere more beautiful.
But why, when I’m happy right where I am?
We all could live better if we really wanted to or tried to make things work.
If you’re not careful, you’ll never experience satisfaction because you’re too busy chasing dissatisfaction (acquiring more things).
That’s the thing about money.
The more you get, the more you think you can and should spend, but that’s the trap.
Create Economic Immunity
When it comes to housing, many of us have an underlying fear of “what if x negative event happens,” and this always stems from not being financially prepared.
Here’s how I avoid financial fear:
I consistently invest.
I live below my means.
I don’t try to impress people.
I maintain multiple primary income sources.
I don’t buy things just for the sake of it; I’m intentional with every purchase.
If you keep your housing expenses low, you’ll likely experience the following:
A higher net worth.
More flexibility in your budget.
Bigger investment opportunities.
A decrease in stress and anxiety.
More cash flow at the end of the month.
Read about my new radical philosophy on how to make yourself economically immune to anything: here — it’s a free article.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.