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8 easy budget tips for tenants
Practice good money habits before and after you begin living in a new apartment so you can keep your finances in good order.
Deciding to rent is an important life decision. Each stage of the renting process comes with a price tag, whether paying your security deposit (bond) or paying rent on time. Practice good money habits before and after you begin living in a new apartment so you can keep your finances in good order.
8 budgeting tips for tenants
Before you move in
To start off on the best foot, you should kick your money-saving moves into gear before you’ve even taken the keys to your new rental property. A conscious decision to build up good financial habits prior to your move-in day will ensure your money strategy is ready even before you become a tenant.
Save up for the security bond
When you sign a lease on a rental property, you will pay a security deposit before you move into the house. This is a payment requested on behalf of the owners from a signing tenant as financial protection in case there’s ever a breach of the lease agreement. The amount of the security deposit is often an amount equivalent to either 4 weeks or 1 month rent, depending on the State you are in. Before you sign your lease, be sure that you have enough money set aside for this payment.
Budget for man’s best friend
If you are permitted to keep a pet in your rental, a pet bond may be charged in some States depending on legislation (Pet bonds are increasingly being introduced across Australia and are likely to become the norm in the future). Lessors and agents must lodge the security deposit as a single amount. This will need to specify the amount taken as pet bond. If you don’t already have a pet, it could be wise to assess your finances before you incur the extra cost.
Consider whether you need to spend money on storage
If you’re downsizing from a bigger rental to a smaller one, it can be tempting to put all your awesome belongings into storage for ‘later’. But think about this – most of that stuff, whether it’s books or furniture – will lose value over time. So, sell or donate your stuff instead, it’ll make you some money today and you’ll save a lot of cash in the meantime.
Bills, bills and more bills
It’s a good idea to set aside a few dollars each week for bills. That way you won’t be stuck with a big bill you can’t afford. Check your previous bills to give you some idea of what the average cost will be. Make allowances for extra costs, such as heating in winter and air conditioning in summer. Bills can include gas, electricity, phone, internet, water consumption and insurance. Keeping these costs low will save you money at the end of each month. Cutting costs might mean being conscious of your thermostat in winter AND summer. Maybe assess your entertainment needs – seek out alternative services like Netflix, or check out a DVD from the library for free.
Find a good location
If you work at the same place 40 hours a week, it’s probably wise to live close to your job. In some cases, this will drastically reduce the amount of money you spend on petrol and car maintenance. So when you’re looking for your next rental property, consider how far it is from the places you regularly visit. Finding a home near your usual haunts will also reduce the wear and tear on your car or bike.
Pay your rent on time
Budgeting for your rent should be at the top of your monthly ‘good money habits’ list. It can be tough to maintain good credit if you’re late with the rent. Paying your rent on time, keeping your rent in advance, will help you to build a solid rental history and develops a pattern of good financial behaviour. It is good practice to pay an extra $25 each week to cover you during lean times if they occur in the future; and if you don’t use it, you have saved it.
Save up so you can move again!
At some point in your renting experience, your lease will come to an end and you’ll be faced with a decision on what to do next. Maybe this is an opportunity to upsize, or downsize or try living by yourself instead of with a roommate. Remember – the extra money you save from cutting back on expenses might help you rent a house or apartment on your own.
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We hope you enjoyed this article
The information contained in this article is based on the authors opinion only and is of a general nature which is not indicative of future results or events and does not consider your personal situation or particular needs. Professional advice should always be sought relevant to your circumstances.
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