Is Renting Really "Throwing Money Away"????

👉🏻 The TL;DR (5 minute read):

I ran the math so you don’t have to!

• though process behind renting vs. buying

• my new Rent vs. Buy Calculator

• a detailed example

🚨 Get started on your personal finance journey with one of my budgeting tools! Check out the Personal Finance Dashboard and the Basic Budgeting Template! 

MONEY
Is Renting Really Throwing Money Away?

Everyone says buying is always better— and maybe in the past, that was true. But in 2025?? Things have changed. A lot.

With a housing squeeze, high (and pretty stagnant) interest rates, and rising insurance and other costs, buying a home ain’t all it’s cracked up to be.

Anytime I share this sentiment, I am met with a ton of backlash because it challenges a predetermined notion that we are essentially indoctrinated to believe: buying is better and renting is throwing money away.

Look, I get it.

Renting can suck. Moving every few years can suck, too. And owning a home can create a sense of stability that renting simply can’t.

That being said, there is no “better” option when it comes to renting or buying. It’s more than a financial decision, too. Life stage, job stability, and personal goals all play into the broader decision to purchase a home.

Regardless of what you want and decide to do, purchasing a home is the BIGGEST financial decision you will ever make.

So you better run the damn numbers.

Because I am who I am, and I want to keep talking about this topic in detail, I created a Rent vs. Buy Calculator that runs the numbers for you.

I also ran a few scenarios in this weeks Youtube video, and I will illustrate one here with you. If you want to see all 3 scenarios and a peak inside the calculator, you can check out that video here!

And BTW - if you have a city you’d like me to feature, hit REPLY back to this email and let me know!! (or leave a comment on Youtube!)

The Rent vs. Buy Breakdown (real example)

So for this specific video, I chose 3 areas to focus on:

• Cape Cod MA since that is a place I am interested in purchasing in

• Chicago IL since that is where I live

• Pittsburgh PA since it was recently ranked the most affordable housing market in the US

Yes I know that Cape Cod and Chicago are pricier markets - but a lot of people are interested in buying in expensive markets so they’re great examples of what it looks like to purchase in a HCOL area.

These numbers may surprise you. I am going to highlight Cape Cod in this email, and if you want to see the other two, I detail them in the youtube video!!

Cape Cod MA: $699,000 home vs. $2,600 rent

• 20% down

• 30 year mortgage at 6.6%

For this example, I estimated property taxes to be 0.6%, home insurance at $7,000 annually, and 1% of the value of the home annually for maintenance.

After 30 years, here are the stats:

Cost to Own

• Principal: $699,000

• Interest: $731,820

• Property Tax: $134,205

• Home Insurance: $150,000

• Maintenance: $209,700

• TOTAL COST: $1,924,728

Cost to Rent (including renters insurance):

• TOTAL COST: $1,491,310

The kicker in this scenario is the opportunity cost - if you were to invest the difference between what you paid in rent and what you would pay to own, over the course of the 30 years you would build your portfolio to nearly $3 million.

What This Tells Us

We are in an inflated housing market and I have no idea if this is ever going to change. With rates over 6%, it would make a lot more financial sense to save up a bigger down payment and take out a smaller mortgage.

Another option would be to make additional payments towards the principal each year, which can buy years off a mortgage and reduce interest costs significantly.

In 2025, it costs A LOT to own a home. A lot of the costs are sunk costs, too. And if you are purchasing in the name of building equity, well, you really need to take a look at the math because you aren’t actually building equity if your sunk costs exceed the appreciation on your home.

And if you don’t believe me, you can run the numbers for yourself!

WEEKLY RECOMMENDATION

I’ve been thinking a lot about babies lately (this is not a hint and not something happening any time soon if ever lol) and the WSJ recently put out a series called The Price of Parenting that details different costs related to raising a child in the US. I know the WSJ is behind a paywall, but I HIGHLY recommend subscribing to read this - it has been fascinating to see what parents are spending, how they are thinking about costs, and different elements to raising a child that I never thought of (i.e. saving from birth to help support them as an adult).

RESOURCES
What’s Happening This Week at Break Your Budget

• This week on Don’t Depend on Daddy: We’re talking about work this week on the podcast! I am sharing 5 career and professional lessons I wish I learned sooner. Your job doesn’t have to be your passion, so if you’re feeling lost at work, this is for you!

• More Rent vs. Buy Examples: If you’re curious about the math behind renting or buying in Chicago or in Pittsburgh, check out the details in this video! I run the numbers, compare it to investing, and also play around with different scenarios if you made extra payments. Enjoy!

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• Take your financial power back with The Personal Finance Dashboard, my comprehensive money management tool!

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• Just getting started on your financial journey? Check out the Basic Budgeting Template!

• Learn exactly how to put together a plan for your finances with the 4-Week Financial Plan!