Renting comes with many challenges, from dealing with difficult landlords to cutthroat competition. But having healthy finances is top of the list, especially in the middle of a cost of living crisis.
It is possible to keep your finances in good shape as a renter, yet to do so you’ll need to use clever strategies. In this article, we’ll share five smart money tips for renters.
1. Create a budget
Making a budget is the best way to understand what state your finances are in
Start by tracking your total income and regular expenses. The difference between these is how much money you have left over to spend – often called disposable income. Set some realistic goals with yourself about how much of this you’d like to save and make a plan detailing how you’ll achieve this.
Review how well your budget is working periodically. If you find that it’s too easy or difficult to stick to then you may need to adjust it.
2. Sell your unused belongings
If you have a wardrobe full of stuff you haven’t used in years, why not have a clear out and see whether you can sell them online for extra money? Even if you sell them at low prices, the pennies quickly add up and can help you build your savings. And as a bonus, you’ll free up space!
3. Cut down your expenses
Try to save money by minimising the money you spend outside of your regular outgoings. You could try:
- Choosing generic or even ‘value’ brands
- Using coupons and store loyalty programs
- Replace incandescent lightbulbs with LEDs
- Unplug unused electrical devices
- Setting up membership cards that give you access to discounts
- Using comparison websites when shopping for services
- Cancelling non-essential subscriptions
It’s unlikely that all the options above will be suitable for you. But if you can combine a few of these tactics, you should be able to create some extra wiggle room for yourself.
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4. Build your credit score
Many renters don’t bother building their credit scores, only to later find that they struggle to get a good deal when they apply for a mortgage.
When you’re ready to get on the property ladder, having a strong credit score can give you access to more product options, offers from a wider variety of lenders, and lower interest rates.
Find a smart way to build your credit history while you’re renting. Small steps like registering to vote, ensuring the correct address on your financial accounts, and tactical credit card usage will make your life easier later on.
5. Always round up
Every time you make a purchase, round the figure up to the nearest whole number. Pay the difference into your savings account. This way you’ll build a habit of setting aside small amounts on a regular basis. You’ll be surprised at how much extra money you can save each month using this simple method!
Keeping your finances healthy is difficult while renting, yet you can do it with the help of some clever tactics. Which of our smart money tips above will you use first?
