Not owning your own home is expensive – monthly rent will put quite a dent in your budget. And yet, it is only one of many necessary expenses you have to plan for. With all the costs piling up, how will you save money for buying your own home down the line? The answer lies in these money-saving tips for renters. From getting a better deal on rent to making small changes in your everyday life, here’s what you can do to increase your budget while renting.
If you’re trying to save money while still getting out of debt, the best thing you can do is to cut down on the biggest expenses. Your rent is chief among them. So if you can find ways to pay less for rent, you’ll surely be able to save some money.
Location is everything when it comes to housing. The better and more sought-after the location, the higher the price of the property will be. Renting downtown, near the city center, in safe and newly built neighborhoods, or in areas that have excellent traffic will be expensive. So try looking in neighborhoods that aren’t that popular. You might not be as comfortable there, but it can save you a lot of money.
It’s tough saying no to your dream home. So if you find the perfect place to rent, you might convince yourself to take it even if it is a bit on the expensive side. Don’t do this! Stick to the 30% rule – your rent should not exceed 25-30% of your monthly income after tax, and don’t even look at places more expensive than that. That way, you can be reasonably confident you’ll be able to afford rent every month, and you won’t fall in love with a property you can’t pay for. If the house or apartment isn’t exactly what you’re looking for, you can always personalize it on a budget; it’ll cost you less than renting outside of your means.
This may sound counterintuitive, but longer leases are better for you. It’s true that they are a commitment and that you’re spending more money when you rent for a longer time, but you need to be realistic. What are the odds that you’ll buy your own home within the next few months? If you can’t achieve that, you’ll need to look for another place to rent. So sign a long lease – you’ll get a better deal. Most landlords offer lower rents for long-term contracts.
Every burden is lighter when you share it; rent is no exception. If you split the rent with someone, you’ll both have a much easier time paying it. You may even be able to afford a better place. Of course, you’ll have to share your space with someone else. This means you might need to get rid of some of your things or put them in storage. Because of the risks associated with cheap units (such as poor conditions and a lack of security), storage is something you shouldn’t save on. But with the money you save on rent, you’ll be able to afford it.
In addition to cutting down your rent, you may be able to save on other everyday expenses. This will help pad your budget a little and make it easier for you to save money.
One of the best habits to get into when you’re trying to avoid debt is planning a household budget. Start by calculating your income and your expenses. Track how much you’re spending and on what. Where can you cut costs? What are some things you simply must pay every month? How much can you set aside for emergencies? Put it all on paper to make it clearer. Then, set aside a certain amount of money for each category of expenses – housing, transportation, groceries, hobbies, savings. Finally and most importantly, stick to your budget! That way, you’ll avoid sudden, unexpected, and unplanned impulse spendings.
Owning a car is a great perk, but it’s not cheap. If you live in a rural or suburban area, you might not really have a choice. But if you can do it, giving up your car can be the best financial decision you’ve ever made. You’ll save thousands of dollars on insurance and gas alone. So if you can walk or bike to work or live in a city with well-developed public transport, consider those alternatives.
Food is something you obviously can’t give up. But you can make it cheaper to eat. First, stop eating out and ordering in (or at least, cut down on it drastically) – this is the biggest money-drainer when it comes to food. Then, get into meal prep. You’ll be able to buy tons of groceries in bulk, which usually means taking advantage of deals. Next, take one day to prepare food for the week to both save time and use up all the groceries instead of wasting food when it goes bad. This is a great tip for both singles, couples, and large families on a budget; although it can take time to prepare all the food at once, it will drastically cut down your food costs and can even make you healthier.
These are the money-saving tips for renters that will make the biggest impact on your budget. But if they’re not quite enough and you find yourself struggling with your finances still, consider also:
- saving on utilities by being more careful with water and energy consumption;
- shopping second-hand for furniture and clothes;
- using your powers of negotiation to lower rent or argue for a raise at work;
- changing your mindset and focus more on experiences rather than material things;
- asking for help from family and friends – it’s better to owe them than go into debt.
Implementing all of these practices might be hard in the beginning, especially when it comes to big changes like living with a roommate, giving up your car, or cooking at home. But it’ll be worth it in the end because you’ll save tons of money!