IMPORTANT PROGRAM UPDATE FOR CURRENT PARTICIPANTS
Before we begin discussing managing rent, Exodus Lending is pleased to launch a new online payment platform. All current program participants should have received an email from us with instructions on how to create a profile with the new Client Portal by March 31st, 2021. Please contact us if you missed this email and need the information again.
For most renters, rent takes out the largest chunk of their monthly income compared with any other expense. And the cost keeps climbing: according to the Department of Numbers, the average rent in Minnesota has been steadily rising over the last decade. With that in mind, here are some tips and resources to help you manage your rent.
How to Include Rent in your Budget
Since rent is often the largest monthly expenditure, the rest of your budget usually revolves around that monthly expense. As such, here are ways to account for this essential expense within your preferred budgeting approach.
- Follow the 50/30/20 budget. With the 50/30/20 budgeting strategy, you would allocate 50% of your income to needs, 30% to wants, and 20% to savings. The cost of rent falls within the “needs” category, but it is not the only item in this section. One common “rule” is to keep your rent at around 30% of your income. However, this guidance is not realistic for everyone and should be adjusted to fit your situation.
- Modify the 50/30/20 to be 80/20. Alternately, suppose you like the general structure of the 50/30/20 approach but need more money set aside to cover essential expenses. In that case, you can instead allocate 80% of your income to needs and 20% to saving. With this adjustment, you can set aside a larger proportion of your income for necessary items like rent.
- Try out a zero-sum budget. Also known as a zero-based budget, this system allocates every cent of your income to something specific, such as bills, debt payments, and savings. At the end of the month, the goal is for your income minus your spending to equal zero. With this strategy, you can prioritize paying your rent first and then plan the rest of your spending around the remaining income.
Moving Somewhere New? How to Plan for your New Rent
One common reason people move is to find more affordable housing. For those looking to move and wanting it to go as smoothly as possible, it’s essential to research the area to find the best value.
- Compare rent prices for different locations by using resources like Rentometer to gauge if the rent is high, low, or average for the area.
- Read reviews from other renters who’ve worked with the prospective landlord or company or lived in the area using sites such as ReviewMyLandlord or ApartmentRatings.
- Prepare for an upcoming move, if time allows, by using a moving checklist.
Rent Assistance Programs and Resources
If you are struggling to pay rent due to the COVID pandemic, there are resources available that may help you.
If you would like additional guidance regarding rent, please consider calling HOME Line’s confidential renters hotline for free and low-cost legal help if you have a rental housing problem or concern.
Money Management E-Newsletter: March 2021