A renter's guide to saving money to buy a home

When you're renting your home, it can feel impossible to put money aside after paying your monthly rent and other bills. Student loans, credit card payments, and groceries sometimes add up to your entire paycheck.

But if you want to become a homeowner and start building wealth, you might need to get creative when it comes to saving money. Luckily, there are plenty of changes, both small and large, that you can make to your budget to get you closer to a down payment.

Nix non-essentials

Go through your budget line by line and get rid of non-essentials, like unused streaming services, unused gym memberships, or other unnecessary subscription services. Be sure to go through any automatic payments you may have signed up for on your phone or laptop. Place the amount you save a

Meal plan

Avoid last minute DoorDash orders by planning your meals ahead of time. Buy the ingredients in advance and stick to your schedule as much as possible. Make restaurant meals a special treat once or twice a month.

Lower your bills

Don’t hesitate to call your cell phone, internet, car insurance, or energy provider to negotiate a lower rate. If you don't have any luck, you might get a better deal if you switch providers. Research various providers’ rates in advance so you can negotiate effectively. 

Pay bills on time—and pay at least the minimum

When you're trying to save money, the last thing you need are late fees. So make sure to pay your bills on time, and be sure the make at least the minimum payment on, for example, your credit card. Otherwise, your debt will continue to increase thanks to interest.

If you have a high interest rate, call your credit card company and ask for a lower one. They just might give it to you—especially if they risk losing you as a customer.

Be mindful of your utilities

If you pay for your own heating and cooling in your rental, be sure to do whatever you can to keep your bills low. Check vents and filters, or ask your landlord if they do so regularly. When airflow is blocked, furnaces and AC units have to work harder and are less efficient. 

Adjust your thermostat—that may be obvious, but also beware of making huge swings on the thermostat by, for example, turning off your heat completely when you're not home during the day in the winter. If you often make extreme adjustments, your heater or air conditioning will kick into overdrive and could cause a spike in your bill. 

Check whether your energy provider has an off-peak option, meaning using your appliances during certain times of day will be less expensive. 

Also make sure you’re using energy efficient LED light bulbs—they use up to 80% less energy and last significantly longer than iridescent bulbs. 

You might also consider unplugging appliances when you’re not using them. Some use standby energy even when they’re turned off. 

Pay down debt

All of the above suggestions can free up money, but if you have hefty debt, that money might go towards interest rather than savings. If you’re really struggling to pay off debt, you might try a non-profit credit counselor like the National Foundation of Credit Counseling. The NFCC and other organizations like it can help you get debt under control for little to not cost. 

Get a roommate

If you have extra space in your rental, taking on a roommate is a great way to cut your rent in half, or at least decrease it significantly. It's usually cheaper to split a two-bedroom apartment than to rent your own studio or one-bedroom place. In most cases you'll also be splitting the cost of internet, gas, electric, cable, and other expenses.

Move to a cheaper area

As a last resort, you might consider moving. Especially if you work remotely, it might be worth it to move, at least temporarily, to a less expensive locale. But moving is expensive, so do the math to make sure the cost of moving won't erase the money you could save in rent.

If you don't relish sharing your space, moving—or any of these other suggestions for cutting back on your expenses—think of them as temporary solutions that will get you closer to your goal of becoming a homeowner. A little sacrifice could go a long way towards a better future for you and your family.

Sources: Realtor, Consumer Reports, Move.org