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I was talking with an older colleague recently who said she was taught in school to never spend more than 1% of the cost of a house for the monthly payment (ie. 1% of a $200,000 house = $2,000 per month payment).
Along the same lines, she was taught to never spend more than 1 weeks salary on housing per month (ie. if you make $8,000/month, you'd pay $2,000 toward housing).
This seems like pretty sound advice; so my question is: Does anyone know of other "old" financial maxims such as these that people either 1) don't remember or 2) consider out of date or not with the times.
I wonder if we might be able to compile a list and then compare our situations to see if they fall in line with what used to be common sense.
Thanks!
Along the same lines, she was taught to never spend more than 1 weeks salary on housing per month (ie. if you make $8,000/month, you'd pay $2,000 toward housing).
This seems like pretty sound advice; so my question is: Does anyone know of other "old" financial maxims such as these that people either 1) don't remember or 2) consider out of date or not with the times.
I wonder if we might be able to compile a list and then compare our situations to see if they fall in line with what used to be common sense.
Thanks!
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