20-25% if you rent or expect the same income.
You can go a little less if you own your home and pay it off.
You can go a little less if you own your home and pay it off.
As it stands, if I wanted to rent my own apartment, 50% of my monthly income would be gone right there. That's not including utilities, internet, or food, and that's not a "nice" place - it's just what you can find. With those other expenses factored in, I'd be looking at roughly another 15% gone on top of that.
So as it is, just to keep a roof over my head, and keep myself fed and minimally entertained, it would cost 65% of my monthly income. I don't drive, but my transit pass is another almost 5%, so that brings it up to 70%; if I did drive it'd be another 10-15% on top of that for fuel and maintenance.
So somehow 30% of my income needs to be spread out for ALL of life (clothing, surprise bills, travel for visiting family, actually doing things you enjoy, etc.). On top of that, now there's saving for my retirement; you say 20-25% should go into savings. Being conservative and using the 20% figure, that leaves 10% of my monthly income to live off of. This also doesn't take into account any sort of savings for a mortgage or car, "Rainy-day Fund", or even allow for the remote possibility of ever traveling in your life.
It isn't probably. It's most certainly.
However, your scenario is ideal but not possible for many. Financial literacy and responsibility goes a long way in being able to live without working (one day).
Then you're looking in the wrong town or at the wrong job-offers. Conventional wisdom has it that you should spend at most 25% of monthly net income on housing.
Unfortunately for the majority of people in this city (or even province in general, BC is expensive), housing is often >50% of income. A one bedroom apartment where I live goes for about $800-1200 on average right now (and are in extremely short supply), and minimum wage is $10.50. There are not a lot of high paying jobs here either; a large number of people are forced to work multiple jobs.
Our entire province is struggling with a housing crisis right now. Things are complicated unfortunately and conventional wisdom doesn't always match up with reality.
When there is such a mismatch between housing costs and salary offers, look somewhere else. "It's not worthwhile to work here." is the information conveyed by those housing prices; those other people who you say are pulling crazy stunts to make the ends meet, are ignorant of that information at their own peril.
We mostly live well above our needs and can save much more.