“Renting is throwing money away.” Has anyone ever told you this? Well, I’m here to say: It’s bad financial advice.

This is always a hot topic, especially because renting challenges the traditional rhetoric that homeownership is the ultimate path to wealth. And I get it — owning a home is part of the “American Dream.”

But if it doesn’t lead to financial freedom, homeownership may be more like a nightmare.

Let me show you how renting, when done intentionally, can actually make you richer.

Renting avoids the hidden costs of homeownership

When you own a home, you’re not just paying the mortgage — you’re also responsible for home maintenance, property taxes and insurance. In fact, Bankrate’s 2025 Hidden Costs of Homeownership Study found that the average annual cost of owning and maintaining a single-family home is more than $21,000.

Now, you’ll incur some of these costs when renting, too. Unless your rental unit includes utilities and internet, you’re probably going to have to pay out of pocket.

Omitting the expenses you’ll still have when renting, homeownership costs an average of $15,391 — that’s almost $1,300 you could free up each month.

And don’t forget about mortgage interest

My clients are always shocked when I have them review the amortization table for their 30-year mortgage. In the early years of your mortgage, a large percentage of your monthly payment goes toward interest. You’re not really building equity in the first few years of a mortgage — you’re mostly paying interest.

After five years of dutifully paying $2,724 every month, you’ve only gained about $25,000 in home equity. Meanwhile, your mortgage servicer will have made nearly $138,000 from your loan interest. Hardly seems worth it.

Renting frees up capital for wealth-building

“Real estate always appreciates in value.” This one’s a myth — just ask anyone who sold a home during the 2008 financial crisis. In today’s economy, renting is increasingly the more affordable option.

According to those numbers, you could save more than $9,000 per year by renting. That money could go a long way for many Americans, and even further if you reallocate that money into wealth-building assets.

Renting can offer new social networks and income opportunities

The combination of downsizing and renting has allowed me to pick up and move quickly to capitalize on potential business or job opportunities in other cities. I can afford global travel with business partners using the money I previously spent on lawn care and home DIY projects. I’ve expanded my social and professional networks and spend more time doing things that bring me joy.

Why renting can be strategic

According to Bankrate’s 2025 Emergency Savings Report, fewer than half of U.S. adults have enough emergency savings to cover three months of expenses, and about a quarter have no emergency savings at all. When you don’t have money set aside for a rainy day, it’s especially important to have tight control over your monthly spendingy.

A fixed-rate mortgage may seem stable, but property taxes can always go up. Insurance premiums can rise, and maintenance is always more expensive than you think. Avoiding surprise repairs to water heaters, HVAC systems or roofing can also decrease the anxiety of not having enough cash savings on hand, especially when those repairs cost thousands of dollars.

Your next steps

—What expenses will actually help me build the life I want?

—Do I want a house in the suburbs because I believe it’s what’s expected of me?

—Could my money be better spent elsewhere?

—If I already own a home, have I considered the real-world costs associated with my mortgage, maintenance and other housing costs?

—How do my homeownership costs compare to rentals in my area?

Final thoughts: Owning a home can be great — if it fits your financial plan

As a first-generation American, I felt the weight of my family’s expectation to live out the American Dream — after all, they emigrated here so I could realize it. But I’m living proof that renting isn’t a step back, nor should you feel any shame for choosing to rent.

It’s been a strategic move that’s made me richer — financially, mentally, and emotionally.

Think of rent the same way you think of a gym membership or software subscription — it’s a monthly cost that may support the lifestyle you want. It’s not “throwing money away.” It’s buying peace of mind, freedom of movement and time to grow wealth in other ways.

For me, real wealth isn’t found in square footage. It’s in the daily opportunity to move and live freely according to what aligns with my own version of the American Dream.