| 15 million renters pay more for housing than they can afford. Here's how to figure out if you're one of them | | |  | WED, FEB 22, 2023 | | | | If you're renting, you may have heard about a rule of thumb not to spend more than 30% of your income on housing.
But it's a rule that needs revisiting amid high rents, writes reporter Annie Nova. Nearly 15 million renter households in the U.S. are considered cost-burdened, meaning they're spending more than 30% of their income on rent and utilities, according to Moody's Analytics.
Significant spending on housing could hinder your ability to save for other goals – and it puts you at greater risk should you lose your job or encounter another financial emergency.
Experts recommend creating a detailed budget to help you determine how much of your income you can afford to put toward housing while staying on track with other financial goals and bills. "After paying for their housing, does the household have adequate income to pay for their non-housing expenses?" said Andrew Aurand, senior vice president of research at the National Low Income Housing Coalition. "If not, they are considered cost-burdened."
For more advice to help you make smart financial decisions, check out CNBC's Financial Advisor Hub and Personal Finance section. | |
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