Renter Guides

Smart budgeting tips for renters

A budget is just a plan for your money. Here are tips for sticking to it.

No matter what your financial goals are, budgeting is the way to reach them. Fortunately, making a smart budget and sticking to it doesn’t have to be hard—it just takes some planning and dedication.

Budgeting tips for renters

  • Create a monthly budget plan.

    Having a documented budget is the only way to know if each purchase you make is a smart one—from an impromptu brunch to a new car. Here’s how to craft your budgeting plan:

    • Track where your money goes now. Whether it’s on paper or in a spreadsheet, note every expense you have for a month and categorize them by type, like housing, entertainment, and savings. When you watch your expenses carefully, it’s easier to see where you could make some changes.
    • Decide how much you should spend in each category to meet your financial goals. One way to divide it up is by using the 50/20/30 rule of budgeting. It recommends 50% of your income goes to living essentials (housing, utilities, groceries, etc.), 20% goes to savings (and debt repayment), and 30% is to spend on anything you like (like eating out, streaming services, etc.).

    While it sounds great to have 30% of your income for personal use, there’s a catch: It’s difficult to get your living essentials down to 50%. Keep trying, though. It’s a goal worth shooting for. Plus, next time you’re apartment hunting, you can look for a rental rate that better fits the 50/20/30 equation.

  • Leave room in your budget for changing needs.

    One of the easiest budgeting mistakes to make is only including your regular expenses, like groceries, bills, and rent. But if you don’t budget for birthday gifts, holidays, and vacations, those expenses can feel like surprises—even though you knew they were coming. Make a “special occasion” category in your budget. If you don’t have any special occasions, you can roll the leftover amount into the next month, giving you a little extra to work with during holidays and other big-spending times of the year.

  • Make budget tracking a habit.

    Your budgeting plan only helps you reach your financial goals if you stick to it. Once you get in the habit of knowing how much you have to spend each month, you’ll start to know instinctively how much you can spend every time you walk into the grocery store or restaurant. But to get there, some budgeting tips can help you start tracking. Here are some options:

    • At the end of each day or week, look at your spending in each category. Adjust as needed the following week.
    • Use a budgeting app. Some can import your bank or credit card activity and track your spending automatically.
  • Make regular appointments for budgeting.

    Reviewing your budget, whether it’s in a spreadsheet or in an app, is an important part of budgeting. It’s how you know if you’re on target to meet your spending goals each month. Whether it’s weekly, bi-weekly, or monthly, create a reoccurring appointment on your calendar (including a reminder!) so the time to do your budgeting is built into your schedule.

  • Set up auto-payments.

    Nothing blows up your budget quite like late fees. Make them a thing of the past by setting up auto-payments to pay as many of your bills as possible. You can even use Trulia’s online rent payment tool to invite your landlord to accept auto-payments.

  • Be strategic about housing.

    The biggest part of most people’s budgets is housing. The general rule of thumb is to spend no more than about 30% of your gross income on rent. Use this as a guide when renting an apartment. Consider negotiating your rent if the asking price is above 30% of your income.

    But many people, particularly if they live in big cities, spend 50%—or more—of their income on rent. If that’s the case, consider making budgeting cuts in other categories, such as not owning a car if possible.

  • Add a roommate.

    Splitting rent with a roommate can be one of the most dramatic ways to cut down on your living expenses. But be sure to get permission from your landlord to add someone to the lease. Landlords typically like to screen tenants, and they often charge more rent for each additional roommate. Even so, splitting the new total with another person could save you a lot of money—and help you hit that budgeting goal of getting your rent below 30% of your income.

  • Pay your savings account first.

    When your paycheck comes in, put money into savings first. If you wait until the end of the pay period, there’s a good chance there won’t be as much left to save. Having a savings account—even if it’s small—does more than just help you reach financial goals. It can save you money. When an unexpected expense comes up, paying for it out of savings rather than a credit card helps you avoid paying interest.

  • Look closely at all your bills—and cut back.

    Some tried and true ways to cut spending: cancel your gym membership and run outside, ditch the cable TV for online streaming, limit shopping trips, buy generic brands, and ask for discounts from your service providers (or switch to cheaper ones if possible).

    There are less visible ways to save too, though. If you use your cable, keep it, but look closely at what you’re paying for. If you have a package that includes channels you don’t watch, downgrade. The same goes for your phone bill: if you don’t use all the data you’re paying for, investigate other options.

  • Make a weekly meal plan.

    It’s most tempting to eat out when nothing in the fridge is calling your name. Buying groceries and cooking at home saves you money over eating out all the time, though. The best way to buy groceries efficiently and avoid impulse decisions to pick up carryout is to make a weekly meal plan.

    At the beginning of each week, decide what you’ll each for each meal. Shop for the ingredients for those meals only. You’ll throw away fewer wilted groceries and have motivation to eat in.

  • Adjust your budget regularly.

    You may go over your budget some months. That’s okay—surprise expenses do come up. But keep track of how often you go over your budget, and allow yourself to adjust your numbers as needed. Your first idea of a reasonable budget might not have been achievable, or you might have been giving yourself too much money to spend in a particular category.

  • Focus on your goals.

    If you have a clear financial goal in mind—such as saving for a down payment on a house—it makes budgeting easier. Whenever you get the urge to spend money on something, picture yourself in your future house (or on a beach vacation—whatever your goal is). Seeing another movie in the theater this month might not look so tempting after all.

    Budgeting tips can help you meet your goals—but if your goal is to move out of your apartment in the middle of your lease, you’ll need some different tips. Check out our guide on how to break a lease.