Financial Educator Reveals That Renting Isn't 'Throwing Money Away' & How It Can Actually Make People Wealthier Than Buying A Home
"I'm removing the shame from renting."
Martinns / CanvaPro Financial educator Ellyce Fulmore uses her TikTok platform to make personal finance more accessible to the average person. She dispels myths bred by societal expectations and makes education easy to access for marginalized communities with complicated histories of building wealth.
In a recent video, she said that she’ll never ignore the benefits that renting has for many people — not only in terms of flexibility but also in terms of saving money and building wealth.
So, despite what your parents or authority figures told you, buying a home might not be the best (and only) option for settling down and investing.
Fulmore pushed back on the argument that paying rent is essentially ‘throwing money away.’
“I truly do not understand the obsession with the phrase ‘renting is throwing money away’ and this belief that if you're paying rent, it’s such a waste of money because the money is not going anywhere.”
Once an all-American ideal, homeownership has become not only inaccessible to many communities in the nation but also incredibly expensive for those who can afford it. According to an analysis of 2023 data from CBRE, reported on by Fox, buying a home is 50% more expensive than renting.
“We technically throw money away on essential services every single month,” Fulmore said. “Let’s take utilities, for example. You pay every month for electricity, water, trash, gas … you’re paying all these utility bills and throwing away that money … but no, you’re paying for a service.”
You need your home to be heated, to have a place to live, and to access amenities in your personal life. That money is not just vanishing into thin air, as people argue. Yes, you technically own a home when contributing to a mortgage, but what about all the other costs and sacrifices you’re forced to make?
Renting also has many perks that aren’t typically available with home ownership.
“I am not responsible for replacing a dishwasher when it breaks; my landlord would handle that,” Fulmore argued about the benefits of renting, admitting that homeowners would “be paying for everything.”
Not only are maintenance issues not a renter’s responsibility from a financial perspective — including large-scale issues like heating or water — but they’re also not an emotional burden.
Homeowners in the comments agreed that’s a huge trade-off. “I purchased a home a year ago and immediately spent $18K replacing the HVAC system,” one person shared. “It was the most stressful month of my life.”
Access to amenities is another huge benefit of renting instead of buying a home, including things like access to a gym, pool, dog park, security system, parking, and in-unit laundry. That's why 77% of people actually prefer to rent in the U.S.
Not only does renting provide great perks, but it can help encourage more saving and investing.
In addition to the many amenities renting usually provides, Fulmore explained that it can also provide more “cash flow” both in the long and short term.
If you pay less in rent than you would for a mortgage, you have more money to spend, save, and invest.
Photo: studioroman / Canva Pro
Especially if you’re buying a home and need to pay for a down payment — which 36% of young homeowners have had to borrow from their families — you’re likely taking money out of investments that could’ve grown until retirement. You’re potentially sacrificing money that could’ve grown exponentially larger through investments.
“I have way more money month to month to invest renting than if I were to have a mortgage,” Fulmore shared. “I would have less cash flow to put towards investments … you have to think about all the costs, not just renting versus mortgage.”
“Financially, I will be richer in retirement if I continue renting. The only reason I’m considering buying a home is for emotional reasons.”
So, if you’re feeling shame or guilt for renting at this stage in your life — whether you’re 24 or 55 — don’t.
Everyone is at different stages, on a unique life path, and saving money for different reasons. Don’t let an “age-old” expectation of homeownership pressure you into a path that’s not a good fit.