For TenantsLifestyle

Budgeting for Rent: Financial Planning Tips for Tenants

We think that everyone is living rent-free in this world, but not even one person can live without a comfortable home. That is why in every financial budget, you should always set aside rent expenses every single month. But this is not just an expense that isn’t worth your paycheck, but this is worth your well-being and as well as your comfort from day to night. Although, there are some instances where some people struggle finding financial balance between needs, wants, and rent expense. This is why we prepared you these pro-tips to balance your entire financial needs.

Assessing Your Financial Situation

Before starting your journey to financial balance, you should always assess your financial situation by calculating your income and expenses. You should prioritize your main expenses to balance it with your income. Make sure that your monthly budget is realistic to avoid discrepancies. Keep in mind that your main source of income depends on your job paycheck, investments, and other sources of income that you receive. After calculating all your income in a month, make sure that it’s always broken down into different categories of your monthly expenses. 

Here’s an example list of breaking down your expenses:

  1. Monthly Rent
    • Rent
    • Maintenance
    • Insurance *if applicable
    • Taxes/Penalties)
  2. Utility Bills 
    • Water 
    • Electricity
    • Internet
  3. Transportation
    • If you commute via public transportation, make sure to set aside your daily commute needs
    • If you commute via private vehicle, make sure to set aside your daily car gas expenses
  4. Food
    • Groceries
    • Food Trip
  5. Savings for emergencies
  6. Personal needs and leisure

This list does not apply for everyone, but if you have most of your needs and wants in this list, then you should get started with budgeting for everything. Becoming a budget-minded person can be a big advantage in overcoming everyone’s enemy – overspending when receiving your paycheck. Take note that it’s better to be prepared before anything else, especially in time of need.

Understanding Rental Costs

When you are renting, there are always additional costs especially if you have pets or you live in a property that includes parking fees. It is always better to think in an advanced way when you are starting your rent era as there can be financial surprises. That’s why make sure to read the terms and conditions thoroughly to avoid missing the important information!

Emergency Fund

There can be times where we have financial crisis during emergencies, so it’s best to set funds aside for that. We want to make sure that we are prepared during these challenging times especially from environmental disasters or even other kinds of emergencies like having to pay medical bills. But there are also other alternatives when it comes to emergency funds – you can always apply for insurance. Although, it’s an additional monthly expense, but think about the benefit of not being taken aback with being financially problematic during these times.

Utilizing Financial Tools and Apps

What’s a better way to budget in this generation than using mobile apps. This is a great way for people who uses their phones daily in every single hour. Technology has come a long, long way in making everything much easier and simpler – that is why you should try budgeting apps to keep you up-to-date with your spending habits towards your financial goals. Think of it as your best friend in helping you become financially-aware in managing your finances.

Building Credit for Better Rental Opportunities

When you want to rent a much better property in the future, make sure that you build a good credit history. This will help you secure more rental opportunities when you plan to move on to a property that costs more than your current rental unit. To make sure that your credit score is maintaining a good history, make sure to pay all your payables before or on its due date. This way, this can help you gain better credit history to verify that you are more than qualified to rent your ideal property. This will help the landlord feel more confident and reassured that you are able to meet your obligations when it comes to paying your bills on time. 

To summarize it all, you should learn how to budget your finances to your daily routine expenses and monthly bills. You don’t want to find yourself suffering in financial debt, that is why practicing financial planning should be your first priority before starting a new cycle of your whole month’s expense. Becoming more financially aware of everything is one of the things that a tenant should possess to balance their needs and wants. Let’s not forget that this also affects your rental opportunities to have your ideal home.

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