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.”

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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.