Millennial Money: Make Renting Work For Your Financial Goals

“Renting is just throwing money away.” “Renting is like paying someone else instead of paying yourself.”

You may have heard these opinions from family and friends, but it’s not that simple. In some areas (looking at you, San Francisco), renting is far more economical than buying a home. But renting can be used to fatten your credit profile as a steppingstone to your financial goals.

MILLENNIALS WANT TO BUY BUT FACE BARRIERS

Millennials are delaying homeownership and staying in rentals longer than previous generations, multiple studies show.

Student debt — that bane of millennial existence — is one factor pushing back the age of homeownership. Rising rents and home prices coupled with slow wage growth also make it hard to save for a down payment. The vast majority of Americans — 9 out of 10 — still equate homeownership with personal success and economic security, according to a survey released in July by the website Apartment List. The survey of a nationally representative sample of people found both renters and homeowners believe there is a social stigma associated with renting.

HOW TO MAKE RENT WORK FOR YOU

You cannot fully control how much money you make. But your credit score — the key to qualifying for rewards credit cards, financing a car or even a home — is largely under your control. Rent payments can be used to beef up your score.