The Best Money Habits for Renters

December 12, 2022

Close-up gambler man hands holding dollars

If you’re a renter, you may have other financial goals that you’re working towards. For example, a big one for a lot of renters is that they want to save money for a down payment so they can become a homeowner.

It’s not always easy to meet other financial goals in your life when you’re paying rent, especially with rent costs at record-high levels.

There are things you can do to put yourself in a strong financial position, even when you pay rent every month.

Get Renters Insurance

Whether it’s renters’ insurance in Illinois, California, New York, or any other state, you have to look at having this type of protection.

A lot of being smart about your money isn’t necessarily about what you earn or save—it’s how you protect yourself.

Across the board, insurance is a big part of protecting yourself financially because if there’s a major emergency that occurs, you could find your savings completely eroded without certain protections.

Renters insurance will protect your belongings from loss, damage, and destruction that can occur because of things like burglaries, fires, and other covered events. Having renters insurance will also protect you if someone’s hurt at your rental home or apartment.

Renters' insurance is surprisingly affordable, with premiums usually ranging from $15 to $30 a month.

Pay Off Debt

Paying off debt isn’t necessarily the most exciting thing you can do financially, but this is what’s going to help you build a foundation that you can move upward from.

Around 30% of Americans’ monthly income goes to paying off debt that’s not their mortgage. This can include car loans, credit card bills, and student loans. That means that if you’re like the average American, you could be paying around a third of your income for things from your past and not putting that money toward future goals, including buying a home.

You don’t want to try and buy a house when you’re already in debt. Having a mortgage on top of existing piles of debt is going to make your life hard and potentially unsustainable.

Try to keep renting until you’ve paid off your debt completely and until you’ve saved an emergency fund that will cover about three to six months of your living expenses. Don’t try to save for a down payment until you’ve done these two things.


If you’re living in the city center, or your apartment is expensive, you should strongly consider moving. Moving a few miles outside of your current location could save you a lot of money every month.

While you might not be able to avoid renting, for the time being, you don’t have to live in the nicest apartment you can afford or in the hottest area.

It’s not necessarily fun to think about moving to a cheaper place, but you could potentially save significant amounts of money in doing so.

You may have to drive or use public transportation to get to some of your favorite places to hang out, but if you’re able to save hundreds a month, that could be a trade-off that’s ultimately well worth it.

The general rule is to avoid renting a place that costs more than 25% of your take-home pay each month. If you’re paying more than that for rent, you may be renting more than what you can actually afford.

If your landlord increases your rent, you need to be ready to walk away.

Landlords might impose a yearly increase, and tenants will stay because they’re comfortable and don’t want the change or maybe because they’re worried about starting from scratch with a security deposit and other expenses. If you have a bit of savings set aside, you can better be prepared if you do need to move if your landlord raises rent to the point that it’s out of your budget.

You can also try to negotiate with your landlord to see if you’ll be able to stay in your current apartment without paying more, or at least not significantly more.

Live By a Budget

Budgets are another one of those not-so-fun elements of being financially smart, but living without one means you have no real idea of what’s coming in versus what’s going out or where you need to make changes.

A budget empowers you because you’re never sitting there at the end of the month wondering where your money went.

You can create a budget in a simple way. First, write down your monthly income. Go over your monthly expenses, including your savings goals, and subtract your expenses from your income.

Take one month where you track all of your spending so you start to get a feel for where your money is going and from there, once you have a good overview, create a realistic budget.

You can save a lot of money by being mindful of your spending.

Be On Time with Your Rent Payments

When you pay your rent on time every month, it helps you establish credit or improve it. It also helps you save money on late fees, and if you’re a good tenant who your landlord can rely on, they’re more likely to give you discounts or negotiate with you.

When you have overdue payments, late fees that you incur add up quickly and affect your credit report.

Try to Save On Rent

Along with potentially moving to a less expensive area or apartment, try to find other ways you can save on your rent every month.

A roommate is one option, but there are other things you can do too.

For example, try to find a rent-controlled apartment. These aren’t available in every city, but if you are able to get one, don’t let it go until you are ready to buy.

The things you’re doing as a renter aren’t just going to help you save money for the down payment, but you’re also going to learn financial skills that will serve you well when you do own a home. You can also qualify for better mortgage terms if you establish good credit as a renter.


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