6 Expert Budgeting Tips to Help You Afford a Rent Increase

As inflation continues to rise and the cost of living follows suit, renters are forced to come face-to-face with the dreaded rent increase. If your monthly rent price has gone up after a year of living in your apartment but your monthly income has stayed the same, you may feel like you have no choice but to pack up and move.  

But that’s not necessarily the case. According to Maggie Tucker, founder and host of Inside Out Money podcast (and an early retiree at just 41 years old), there are money moves you can make to be able to afford the extra housing costs without increasing your take-home pay. Here’s her advice. 

Tucker’s number one piece of budgeting advice is to understand how you tend to spend your income. “It's hard to know where you can cut back when you don't have a complete picture of where your existing money is going,” she says. “Are you spending more than you realize eating out, shopping for things you don't really need, or perhaps your grocery bill is much higher than you expected?” 

Tucker’s favorite method of tracking monthly expenses is to use spreadsheets, but you can also use a budgeting app — she recommends Monarch Money or YNAB (which stands for You Need A Budget). Apps like these will show you budget breakdowns based on your different categories of expenses and help you set financial goals. If you’d rather do it on your own, you can also analyze your bank and credit card statements, categorize your spending, and then create a spreadsheet based on your findings. 

The hardest part about learning to save money, Tucker says, can be abandoning the ignorance-is-bliss philosophy and diving into how much money you are spending. “People are often afraid to track things because they think they aren’t doing well, but burying your head in the sand and ignoring the data definitely isn’t going to move you forward in a positive direction,” she says. “As I often say on my podcast: What gets measured gets better.” 

After you’ve gained access to your spending habits through a spreadsheet or personal finance app, you will start to get a better idea of areas where you can budget. But before you make any decisions and start to take action, Tucker says, you might want to reflect on what’s most important to you.

Although budgeting entails dealing with numbers and spreadsheets, it also involves making choices that directly affect your day-to-day life. “Spend time being really thoughtful about what matters to you in life and how you want to adjust your personal finances to reflect those intentions and aspirations,” she says.  

For many people, the apartment where they live has a very high impact on their quality of life, especially if they work from home or live near a community of neighbors and friends. “If this specific apartment is a priority at this time in your life, then you should be willing to make other tradeoffs to afford the higher rent payment,” says Tucker.  

On the flip side, maybe your reflection leads you to a different conclusion that makes you want to prioritize affordability. “You might decide you’d rather be able to spend in other categories like groceries, transportation, socializing with friends, or travel,” she says. If you resonate with that choice, you might find it less disappointing to find a new apartment with a lower cost of rent or, if possible, to find a roommate that may offset the cost of your place.

Even if you reduce spending elsewhere, there are unfortunate situations where you simply need to move on from your current apartment, Tucker says: “If the increase in rent will put you into a situation where you are living paycheck to paycheck and aren’t able to maintain an emergency fund, invest in your 401k, and save for the future, then you should consider other less expensive housing options.”  

If you don’t fall into those categories, you can make other moves to save money. But don’t forget: It likely won’t be one-size-fits all. “For the average person, you're going to need to do a few things combined to save that extra money for rent,” she says. “For some people, there could be one big-bang expense they can remove, but assume you'll need to reconsider multiple expenses and priorities in your life.” 

If your rent is increasing by $250, for example, and you know you tend to spend about that much when you walk into stores that are most tempting for you (Target, TJ Maxx, Amazon, etc.), it might be time to get more comfortable with items you already own and cut off those toxic retail relationships. This is an easy short-term solution that will keep you afloat while rental market rates increase — and your savings account will thank you for it.

“Reign in your spending on superfluous things you want but don't need, and you may quickly find that extra rent money,” says Tucker. 

The average monthly car payment in the U.S. is $738 for new cars and $532 for used cars. “If you live in a city with reliable public transportation, consider a less expensive car option or getting rid of a car altogether,” she says. If you can’t get rid of a car transportation option, you can always replace your expensive car with a cheaper reliable vehicle. “Your car insurance will often cost less as a result, too.” 

Some cities are even seeing an increase in car subscription programs, where you don’t own a car or pay for insurance but instead pay a monthly fee based on how many miles you drive, you get your own personal vehicle, and can cancel the subscription at any time. This could be a relatively cheap option if you don’t use your car all that often or only make a short daily commute. 

According to Tucker, many Americans pay over $100 a month for cell phone service. “But if you switch to a discount cell phone provider like Visible, which is owned by Verizon and on the Verizon network, you can get an unlimited data plan for a flat fee of $25 per month,” she says. “There are also other carriers like Mint Mobile and prepaid cell phone plans with all of the large carriers.”  

Cutting that cost could be a difference maker if your rent is only increasing by a small (yet still intimidating) number. 

Don’t forget: Don’t be too hard on yourself. Tucker reminds us that mindset is everything and it helps to be kind to yourself. “Wipe the slate clean from the frustrations of the past and focus on the future,” she says.