Personally, it has always been a goal to save 30% of my income each month. While that was not always possible, especially when raising a family, it was a worthy goal that helped prioritize spending. That includes spending on housing. It used to be recommended to not have a mortgage payment greater than 30% of income. 30% was slightly higher than my personal risk tolerance. It limits long-term savings and investments, especially when that does not include savings for what I consider short-term savings for big ticket items like vacations, automobiles and emergencies. Those are things you do not want to finance through borrowing if you ever want to become debt free.
The key to being debt free is, believe it or not, is not going into debt. That snowballs over time. It becomes increasingly easier to become and remain debt free when you save and pay with cash.
“why banks increase their risk portfolio by lending to people when a mortgage payment is 41% of a person’s income.”
At the end of the day there is a government bailout.
Heads they win, tails we lose.