Housing cost should be ≤25% of take-home pay
The Ramsey guideline is that total housing costs — mortgage or rent — should be no more than 25% of monthly take-home pay.
Snapshot · The Ramsey Show
Life Is Complicated. Money Doesn't Have To Be.
Explore episode
Jul 27, 2026
Where this was said
Joe in Boise: House Poor With Equity but No Emergency Fund
At 1:01:58 · chapter starts 59:18
Joe's situation looks precarious at first glance — a $2,200 mortgage on a $4,500 take-home, zero consumer debt, and a habit of draining his emergency fund for repairs. But once he mentions the $1,500 rental income and that the home appraised at $500,000 while he paid $290,000, the picture shifts. George Kamel notes housing costs drop to roughly a third of combined income with the rental — still over the 25% guideline but manageable. The real diagnosis is a missing emergency fund, not a bad house. With $1,000 monthly margin remaining after all bills, Joe is told to stay put and save.
House Poor in Boise: Should Joe Sell?
Joe's mortgage looks brutal — half his take-home — but add the $1,500 rental income and it drops to a third, with $1,000 margin left each month. The move isn't to sell; it's to build back the emergency fund.
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