How To Stay Financially Healthy While Renting

Home ownership is in decline. In places like Sydney and Melbourne, housing affordability is particularly out of reach. Which means that for many of us, renting is no longer a short-term stop on the road to four walls of your own – it’s a lifestyle; past, present and future. So, if you’re not doing things like “building equity” in a home that you own, how can you make sure you’re still financially healthy?


Maybe you’ve decided that buying a home just isn’t for you. But just because you aren’t saving for a home deposit, doesn’t mean you shouldn’t be saving at all. Putting aside money in a high-interest savings account or a term deposit means you’ll have a nest egg which can be relied on in case of emergencies.

In Australia it’s pretty common to talk about home ownership as a form of investment. But why not find other ways to invest? You might be interested in putting money into stocks.

Rent Stress

Rent stress is a term used to describe people who are at risk of finding it difficult to pay their rent and meet other living costs. There’s a simple test you can use to check whether you’re in this boat – if you’re on a low income and you’re paying more than 30 percent of your income on rent, then you’re suffering from rent stress. And you’re not alone – the Rental Affordability Index shows that some low-income households are spending up to 85 percent of their income on housing costs.

If that’s you, it’s likely the result of a number of factors beyond your control. It’s worth investigating whether you’d be better off moving to a less expensive area, asking for a pay rise, taking in some housemates, or taking up a side hustle.


When you’ve just started your career, retirement is probably pretty far from your mind. It’s like, 40 years away! You haven’t even been alive for 40 years yet. A lot of 20-somethings treat superannuation as a set-and-forget kind of thing, but it’s worth making sure you’re on top of it at this early stage. This is especially true should you end up being a life-long renter, because you’ll likely need a lot more money socked away for a comfortable retirement. If you want to get a head start, then consolidate your super funds (it’s actually heaps easier than you think) and consider putting some extra money in there. With the growth of the gig economy, many more of us are freelancing – if that’s you, be sure to keep on top of your super payments, because if not, you might be penalised come tax time.

Although renting can be a bit of a bummer from time to time (as anyone who’s had a big rent hike can tell you), there’s also some freedoms involved – and you can still be in tip-top financial shape without putting cash down on a home.

Amelia is the Editor of The Cusp. You can find her on twitter @amelia___m or instagram @ameliamarshall.

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