If you’re renting for the long term, you’re not alone. A recent report found that 33% of Canadians rent their homes. While renting used to be seen as a temporary situation or a step towards owning a home, for many people long-term renting has become the status quo. Renting your home can offer flexibility and freedom, but it also comes with its own set of financial challenges and expenses. To make the most of your money, here are some budgeting tips to keep in mind if you’re renting for the long term.
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Calculate Your Total Housing Costs, Not Just Rent
Even if you’ve been renting long-term already, it’s crucial to calculate all of your costs, beyond your monthly rent payments, when setting up your budget. Utilities such as your electricity, water, gas, and internet are not always included in your rent. If you haven’t budgeted for these added costs, you might already be finding yourself short each month. Tenant’s insurance, which covers the cost of your belongings in case of loss or damage, is often required by landlords and needs to be included in your budget as well.
Accounting for all of your expenses will help you build a more accurate budget that reflects your current financial reality.
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Create a Detailed Monthly Budget
Once you know what all of your expenses are, it’s time to build your budget. While this may not be everyone’s favourite part of managing their money, having a detailed monthly budget helps you plan how to pay for your expenses. A budget doesn’t have to be fancy or complicated, so you can get started with a few steps:
- Account for Your Income: Don’t forget about earnings outside of your regular job such as side gigs, freelance work, Canada child benefit payments, or alimony.
- List Your Expenses: Use the list of housing expenses you put together earlier as your starting point. Then add other fixed expenses like groceries, transportation costs, medical expenses, debt payments, transfers to your savings account, and childcare if you have kids. Finally, add in your variable expenses like clothing, personal care, recreation, or eating out.
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