When it comes to renting a place to live, young people are in deep. According to a study from the rental listing site RentCafe, by the time the average millennial — people born between 1977 and 1995 — reaches 30, they will have spent more than $90,000 on rent alone. That’s a number that will surely send shivers down the spines of many young people.
More specifically, the RentCafe report found that the average millennial will spend about $92,600 on rent before hitting the 30 year mark. That’s nearly 25 percent more than Boomers ever had to spend on rent. Do the math and it works out to an average monthly rent of $965 compared to the $740 (in inflation-adjusted dollars) Boomers spent at the same ages. Why are young people spending so much to put roofs over their heads? Well, one reason is the 2007 housing crisis, which forced older people who would normally be buying homes to rent instead. That influx of consumers forced pricing sky high across the board. Sadly, those younger than millennials — the so-called Gen Z’ers — won’t have an easy time either. As Opens a new windowMoney reports, renters who were 20 in 2017 will likely pay an average of $1,064 per month from ages 22 to 29.
For those millenials who could sock away that $92,600 instead of spending it on rent (perhaps by living at home with parents for a bit), investing all that money would be a great option. At a five percent return, that $92,600 would be worth more than $500,000 when the young person turns 65. For those that can’t stay at home and need to rent, or want to spread their wings, a strict budget will help ease the pain of monthly rent. That starts with figuring out monthly expenses (including rent, which shouldn’t exceed 25 percent of your income), then subtracting that from monthly pay. The more diligent young people are about their budgets, the easier it will be to stomach rental fees.
