A recent survey reveals millennials are spending a lot on rent, but whether or not renting is the best option for a group that often makes more than their baby-booming parents is something we should talk about.
Canada’s housing market hasn’t been easy to jump into for young people, and I’m aware the recent rule change certainly doesn’t make it any easier. While there is a stigma surrounding millennials who choose not to buy into the market, it seems a growing number of young people are questioning whether or not what was good for baby boomers is good for them too.
These are all good and fair questions to ask. In fact, I believe it’s wise for anyone to sit back and consider what their goals are, and how to best achieve them. But it can be a slippery slope when young adults are spending $93,000 on rent before they hit 30 without identifying and working towards their own goals.
Buying a house is a big goal. For some, it isn’t even on the radar yet. And although that is okay, it doesn’t mean renting versus buying shouldn’t be a conversation in the mirror or with a trusted friend. Otherwise, you may spend nearly $100,000 in rent before realizing that could have been money invested to come back to you.
No matter what your goals are for the future, buying a home can set you up for financial success in the long run. To prepare for investing in a house, start by considering these three things:
Make real goals: If you don’t make real goals for yourself, the likelihood of it happening is pretty slim. The problem with a big goal, like a house, is that it either feels too far away, too scary or like too much commitment. But if you begin to save with an audacious goal in mind, the worst that could happen is you end up with a new goal, and $93,000 sitting in your bank account waiting for you.
Every penny (still) counts: You might not be sure right now when you’ll be ready to buy a home, but why not be prepared for when that day comes? I know it’s tough to save while you’re finishing university, starting your career and beginning to pay expenses on your own. But even if it’s $100 a month, set it aside in your Big Goals fund. Your future will thank you later.
Lower those expenses: Did you know people spend up to $1,200 on coffee at cafes in a year? But if you made coffee at home, you’d spend $45? There are so many ways to lower your expenses so you can set aside more of your hard earned money for your future home. Find a cheaper rental, live with roommates, or ask family if you can live with them at a lower rate while you save up.
It isn’t easy to get into the market. It can be intimidating, even terrifying to consider buying into the real estate world. But what is even scarier is an entire generation
spending tens of thousands of dollars on rental costs when they could be investing into their very own dreams.