Charlie Glahe WIN Broomfield

How renters can save for their first home


If you're a millennial renter, you've heard one narrative regarding your living situation: You aren't taking advantage of low interest rates and are putting off becoming a homeowner. As the largest living generation, millennials are meticulously studied, particularly when it comes to the their involvement in the housing industry.

Homebuying trends among young individuals and families are routinely picked apart because of the current state of the real estate market. Most worrisome is the U.S. home ownership rate. According to the U.S. Census, the rate fell to 63.4 percent. CNBC said this marks the lowest percentage of homeowners since 1967.

Interestingly enough, housing construction has picked up the pace in recent months. One of the biggest construction areas happen to be on the renter's side, and it's no surprise millennial renters are content with that form of living. However, a recent study from TD Bank revealed an interesting statistic about millennials. According to an infographic, 46 percent of millennials will look to become homeowners within the next year or two.

Much has been said about the financial limitations young renters currently face. While it may seem difficult, there are ways millennials can save money for a down payment while living as a renter. It may take some time, but you'll be able to make the switch from renter to homeowner.

Change your shopping habits
The days of running to your favorite store after getting paid are going to have to come to an end. Realistically, a lot of your current shopping habits will have to change, according to an article published on Forbes and authored by You won't exactly have to resort to changing your personal style, instead, go shopping less often and try to avoid high ticket items. For instance, if you're serious about saving for a house, you probably don't want to go out and purchase a brand new car.

Another shopping habit you can change? That morning cup of coffee from your favorite vendor. It doesn't seem like the large cup is costing you a lot, but over the course of a month and then five months, those charges add up. Coffee and food are perhaps some of the biggest expenses of any individual's finances. Schedule grocery shopping trips to ensure you're always stocked on food that will replace eating out. You'll not only save money, but you may even eat healthier.

As for coffee, you'll benefit by making your own pot every morning before heading to work.

Trim the unnecessary
As a renter, you have monthly bills. These obligations are likely rent, utilities, cell​phone, Internet, cable and monthly subscriptions to various entertainment list. At the beginning of every month, you should create a budget that clearly lists where your monthly income is going. Mark off the necessary expenses, such as rent and groceries. From there, examine the remaining expenses and decide which ones to eliminate.

From there, budget your money so you can easily keep track of all your money. One category of your monthly expenses should be designated as a spontaneous fund. Essentially, this money you may spend without planning on it, such as purchasing a new pair of pants.

If you've never created a budget before, there are multiple mobile applications and Internet programs available. These are often free and renters should take advantage of the services. The apps can even create and customize personalized budgets based on your income and expenses. In an age where technology is relied upon more than ever, it only makes sense to rely on services to help with budgeting.

Start investing
In late August, investors and the world awoke to financial uncertainty. Two days later, the U.S. economy was trending upwards. With so much volatility, it's easy to understand why renters are hesitant to gamble their money and potentially never see it again. However, you're causing more harm than good by not investing.

According to a recent poll from Bankrate, 52 percent of Americans have no stocks. Respondents said the biggest hurdle is a lack of money to invest and the belief that large sums are needed to first step foot in the market. In an interview with Bankrate, Robert Stammers, director of investor education for the CFA Institute, said this is an incorrect mindset and renters can still invest with small amounts of capital.

"You're not going to get as much of a return in dollar terms if you have less money, but you can still invest," he added.

The terrible images of the recession may still be fresh, but you have to move past your mistrust of the market. If not, you may not have enough for a down payment once you enter the middle portion of your life. You may even get lucky and find yourself investing in the next big company or industry and reap the benefits as skyrockets in market value.

Renting an apartment is both beneficial and harmful. For some, it signals a big step into adulthood as you are finally living on your own. Rent too long, however, and you start to risk throwing money away that could eventually lead to a down payment on a house. Certain financial situations have limited income and opportunities for renters, but it is possible for them to save up for a house. Some short-term sacrifices may have to be made, but the payoff is worth it in the end.