The general rule is that no more than 30% of your income should go toward housing costs. This is often referred to as the '30% rule' and is widely recommended by financial advisors. Keeping housing costs in check ensures that you have enough money left over for other essential expenses like utilities, groceries, and savings. It's particularly important for renters and first-time homebuyers to use this rule as a guideline.

Exceeding the 30% threshold could lead to being 'house poor,' meaning a significant portion of your income is tied up in your living situation, leaving little room for savings or other financial goals. However, in high-cost cities, this rule can be difficult to follow, and many households spend more than 30% on housing. Still, it is considered a good rule of thumb for maintaining a balanced budget.