Markus Andrews

In 2022, the typical renter in the U.S. had a median net worth of $10,400, less than 3% of the $400,000 net worth of homeowners, according to the Aspen Institute.
However, tenants can still take steps toward building wealth, experts said.

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It’s no secret that homeowners often have a higher net worth than renters. But while renters face unique affordability challenges, there are still steps they can take to improve their financial standing.
In 2022, the typical renter in the U.S. had a median net worth of $10,400, according to a new report by the Aspen Institute. That’s a record high — even though it represents less than 3% of the nearly $400,000 net worth of homeowners.

Renters generally face financial challenges such as lower income, higher debt, less savings and lower rates of asset ownership, the report noted.
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The wealth gap is not solely due to home equity. Median home equity, at $200,000, accounts for only slightly more than half of homeowners’ median net worth, suggesting that an owner’s wealth derives from other assets, the Aspen Institute found.
Across income levels, renters are less likely than homeowners to own assets including cars, retirement accounts and securities, among others, the report found. Renters who do hold such assets tend to have lower median values compared with homeowners.
Tenants can begin to build wealth by paying off outstanding debt, increasing their income and savings, and assessing if and when a home purchase makes sense, according to experts.

Here are some of the financial challenges renter households in three sample income brackets face, according to the Aspen Institute, and ways they can build wealth.

Renters who earn less than $25,000 a year

As of 2022, more than one-fourth of all renter households made less than $25,000 a year, the Aspen Institute found. 
Renter households in this income group are more likely to be “cost burdened,” or have to spend a significant share of their income on housing and utilities, said Janneke Ratcliffe, vice president of housing finance policy at the Urban Institute in Washington, D.C. That makes it challenging for them to cover other essentials, let alone build wealth.
“If you’re relying on any kind of benefits, as soon as you achieve a certain level of income or savings, you get kicked off,” said Ratcliffe. 

A hypothetical family in this category “first needs financial stability to meet the precondition for wealth building,” the Aspen report said.
“They need routinely positive cash flow — through higher income, lower expenses, or both — more savings and personal resources, and increased access to benefits that will support increased stability,” the report said.
Tackling any high-rate debt can be a smart move, said Clifford Cornell, a certified financial planner and associate financial advisor at Bone Fide Wealth in New York City. A credit card balance eats away any progress you make in terms of savings, he said.
“It’s incredibly toxic, and it can absolutely destroy a financial situation for somebody if you let that accrue,” Cornell said.
Given that housing expenses can be the biggest budget line item, be thoughtful about where you live, said Shaun Williams, private wealth advisor and partner at Paragon Capital Management in Denver, the No. 38 firm on CNBC’s 2024 Financial Advisor 100 List. 
You might have better job prospects and increase your income by living in a different area or state, he said. 
“Trying to move where there’s better opportunities and lower costs is a key element there,” Williams said.

Renters who make $50,000 to $75,000 a year

In 2022, roughly 18% of all renter households earned between $50,000 and $75,000 annually, according to the report.
A hypothetical family in this income bracket “has some baseline financial security, though increased cash flow through higher income and/or reduced debt servicing could enable a stronger position,” according to the report.
Renters in this income bracket can monitor their cash flow to find opportunities to save money each month, said Cornell: “After all expenses are paid, what is left over?”
A “great spot to be” in is finding ways to save about 5% to 10% of your income while also looking for ways to increase your earnings, said Williams. 
“That’s the place where you start saving a little bit,” he said.

Renters who make $100,000 or more a year

About 20% of all renter households in 2022 made more than $100,000 a year, according to the Aspen Institute.
While this cohort of renters has the strongest financial picture, they may choose to rent rather than buy for a variety of reasons, experts said. 
In some places, it’s less expensive to rent than to own. Even though tenants may pay renter’s insurance, utilities and applicable amenity fees, landlords typically cover the unit’s maintenance and property taxes.
For homeowners, “your mortgage is the absolute minimum that you will be spending every month,” Cornell said. 

While these renters aren’t building home equity, they can focus on building their investments and savings, experts said.
For example, say your hypothetical mortgage payment is $2,500 while your rent is $2,000, Williams said. A mortgage payment will put $500 “into a savings account called your house,” he said.
If you rent, take the $500 difference and save it into a retirement account. This way, you’re still saving money, and it may grow faster than real estate, Williams said. More

Retailers tempt shoppers with incentives and discounts between Black Friday and Cyber Monday.
But these are not necessarily the best prices of the year, according to shopping experts.
Here’s what not to buy on Black Friday and how you can snag even lower prices later on.

Shoppers walk along Fifth Avenue in New York on Black Friday, Nov. 25, 2022.
Bloomberg | Bloomberg | Getty Images

Retailers hype Black Friday sales, and it works.
This year, the number of people shopping between Thanksgiving Day and Cyber Monday could hit a record, according to the National Retail Federation’s annual survey.

But that doesn’t mean consumers are getting the lowest prices of the season.
According to WalletHub’s 2024 Best Things to Buy on Black Friday report, 41% of items at major retailers offer no savings compared with their pre-Black Friday prices.
The items that are on sale are marked down by 24%, on average. The site compared Black Friday advertisements against prices on Amazon earlier that fall. 

Don’t fall for deceptive deals

“Some Black Friday deals are misleading, as retailers may inflate original prices to make a deal look like a better value,” said consumer savings expert Andrea Woroch.
Such tactics can create an urgency to buy, even when the discount isn’t that significant, according to R.J. Cross, a campaign director at PIRG, a nonprofit consumer advocacy research group.

Other common ploys include displaying the number of shoppers with the same item in their carts or an alert that a product is almost out of stock. PIRG also found that some sellers on Etsy use fake countdown timers on deals that don’t expire.
Etsy did not immediately respond to a request for comment.
“These stunts aren’t limited to the holidays. Retailers and advertisers are always trying to get you to buy more than you need and spend more than you want,” Cross said in a statement. 

Expect up to 30% off on Black Friday

This year, in particular, some of the deals are already as good as they are going to get.
“Those holidays have gotten a little watered down because retailers want to maximize the selling days,” said Adam Davis, managing director at Wells Fargo Retail Finance.
“You are easily going to see 20% to 30% off,” Davis said — but “not necessarily storewide.”
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Depending on the retailer, some markdowns could be up to 50%, according to Lauren Beitelspacher, a professor of marketing at Babson College.
However, premium brands — including high-end activewear companies such as Nike, Alo or Lululemon — likely will not discount more than 30%, she said. “It’s a fine balance with maintaining the premium brand integrity and offering promotions.”
To that end, retailers will also try to lure shoppers to spend with incentives, such as a free gift card with a minimum purchase, Woroch said. “Many stores will also offer bonus rewards when you spend a certain amount on Black Friday.”

What not to buy on Black Friday

Typically, Black Friday is a great time to find rock-bottom prices on fall clothing — including flannels, denim, coats and accessories — as well as televisions and consumer electronics. 
But hold off on beauty and footwear, which are typically better buys on Cyber Monday, Woroch said.

For those planning a trip, “Travel Tuesday” can be a good time to snag discounts on airfares, cruises and tour packages, with many hotels offering 20% to 30% off best available rates. Travelers can check out Travel Tuesday deals from 2023 to get an idea of what to expect this year.
With toys, it could pay to hold out until the last two weeks of December, and holiday decorations are cheaper the last few days before Christmas or right after, according to Woroch.
Exercise equipment, linens and bedding tend to be marked down more during January’s “white sales,” she said, and furniture and mattress deals are often better over other holiday weekends throughout the year, such as Presidents’ Day, Memorial Day and Labor Day weekends.

How to get the lowest prices of the season

A shopper walks through the retail district near Oxford Circus in London during the annual Black Friday sale event, Nov. 26, 2021.
Leon Neal | Getty Images News | Getty Images

Woroch recommends using a price-tracking browser extension such as Honey or Camelizer to keep an eye on price changes and alert you when a price drops. Honey will also scan for applicable coupon codes.
If you are shopping in person, try the ShopSavvy app for price comparisons. If an item costs less at another store or popular site, often the retailer will match the price, Woroch said.
Further, stack discounts: Combining credit card rewards with coupon codes and a cash-back site such as CouponCabin.com will earn money back on those purchases. Then, take pictures of your receipts using the Fetch app and get points that can be redeemed for gift cards at retailers such as Walmart, Target and Amazon.
Finally, experts urge consumers to pay attention to price adjustment policies.
“If an item you buy over Black Friday goes on sale for less shortly after, you may be able to request a price adjustment,” Woroch said. Some retailers such as Target have season-long policies that may apply to purchases made up until Dec. 25. More

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Rumble, a video platform aimed at conservatives, said Monday evening that it will begin allocating a portion of its excess cash reserves to bitcoin and making purchases of up to $20 million in the cryptocurrency.
Shares rose more than 2% in extended trading.

“We believe that the world is still in the early stages of the adoption of bitcoin,” Rumble chairman and CEO Chris Pavlovski said in a statement Monday. “Unlike any government-issued currency, bitcoin is not subject to dilution through endless money-printing, enabling it to be a valuable inflation hedge and an excellent addition to our treasury.”
“We are also excited to strengthen our ties with crypto and to bolster our efforts to become the leading video and cloud services platform for the crypto community,” he added.
The move puts Rumble in the same company as MicroStrategy, which began employing an aggressive bitcoin-buying strategy in 2020. MicroStrategy’s shares, up more than 500% in 2024, trade as a proxy for bitcoin. Tesla and Block have also previously purchased bitcoin. Two smaller companies made the same move this year: Semler Scientific in May and Acurx Pharmaceuticals last week.
Rumble is viewed as a play linked to Donald Trump’s reelection given its popularity among conservatives. The alternative to YouTube went public in 2022 through a special purpose acquisition company led by Cantor Fitzgerald CEO Howard Lutnick. Last week, President-elect Trump chose Lutnick as U.S. Commerce Secretary.
Rumble is up nearly 63% this year, and the stock has gained 42% in the past year.

Bitcoin itself, which came within shouting distance of the $100,000 milestone last week, retreated on Monday. It was last lower by more than 3% at around $93,000, but the flagship crypto is expected to hit the $100,000 mark before the year is over. It has more than doubled in 2024.
With Trump’s incoming administration expected to take a pro-crypto stance, investors are keeping an eye out for the next big company that will begin buying bitcoin. MicroStrategy chairman and bitcoin evangelist Michael Saylor said last week on an X Spaces event that he plans to pitch the board of Microsoft in December on his bitcoin treasury strategy.
The theme has broadened to the government level this year, with Sen. Cynthia Lummis (R-Wyoming) proposing a national strategic bitcoin reserve. This summer, Trump also mentioned a potential national bitcoin stockpile.

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Warren Buffett has advice for all parents: let your adult children read your will before you sign it.
“Be sure each child understands both the logic for your decisions and the responsibilities they will encounter upon your death,” Buffett wrote in a letter Monday.

Warren Buffett, chairman and CEO of Berkshire Hathaway Inc
Daniel Zuchnik | Contributor | Getty Images

‘Tough conversations’ that ‘strengthen relationships’

Douglas Boneparth, a certified financial planner, agreed with Buffett’s advice to reveal your estate plan.
“These are tough conversations to have, but they’re meaningful and when approached correctly, can strengthen relationships,” said Boneparth, who is founder and president of Bone Fide Wealth in New York City and a member of CNBC’s Advisor Council.
You want your children to have realistic expectations about their inheritance, Boneparth said.

“Kids’ imagination can run wild with what they think they should be getting,” he said. As a result, you should be as clear and thorough as possible about who will receive what and why.
People might worry about hurting their kids’ feelings, or hearing from one that they think something is unfair. Well, that’s exactly why you want to discuss it, and not “punt that mess for when you’re not around,” Boneparth said.

Kids’ imagination can run wild with what they think they should be getting.

Douglas Boneparth
a certified financial planner

In his letter, Buffett recalled that over the years he witnessed “many families driven apart after the posthumous dictates of the will left beneficiaries confused and sometimes angry. Jealousies, along with actual or imagined slights during childhood, became magnified.”
If the inheritance is not split equally between siblings, you’ll want to explain why, Boneparth said. Maybe one child will receive more because another got help with a down payment on a house or attended a far more expensive college, he said. A child with a spending problem might inherit a trust, Boneparth added, in which they receive their bequest in regular installments.
If one child is in a much better financial situation than another, you might explore with the more comfortable one if they’d be OK with you leaving them less, said CFP Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Florida.

Aitor Diago | Moment | Getty Images

You might ask the well-off child, McClanahan said, “‘Do you really care how I leave our assets? Because your brother is an artist and could use a little more help.'”
“That way that child is not slighted when they actually find out,” she said.
In Buffett’s letter, he writes: “There is nothing wrong with my having to defend my thoughts. My dad did the same with me.”

When ‘sharing that information can be damaging’

Buffett’s point that adult children should be invited to weigh in on the will is usually a good one, said McClanahan, who is also a member of CNBC’s Advisor Council.
“When you’re creating your estate document, ask your children in advance what’s important to them,” McClanahan said. “That way, you can keep that in mind.”

In rare cases, it’s best for parents to withhold certain information in their will, McClanahan said.
For example, she would recommend a parent be more cautious if a child has exploited them financially. Meanwhile, if a child is irresponsible with jobs or money, learning that they stand to inherit a lot may further erode their work ethic and ambition, McClanahan said.
“If you have children who are not mature, sharing that information can be damaging,” she said, adding that she may recommend clients in these situations write a letter to their children, which they won’t see until after they’ve died, explaining their estate decisions.
“Every family is different,” McClanahan said. “That’s why there should be no set rule.”

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Chip Leighton’s “teenager texts” on social media hilariously call out questions from kids to their parents, such as “Do I need to tip the eye doctor?” or “Hey, is the ATM going to be open later?”
Leighton says it’s not necessarily that today’s kids know less about money-related topics, it’s just that these questions are more likely documented now.
Still, there is a growing push to teach financial literacy in schools.

Chip Leighton’s viral ‘teenager texts’ highlight how little some kids know about money.
Courtesy: Chip Leighton

Chip Leighton knows how funny kids can be.
Social media posts by the creator of “The Leighton Show,” which have collectively been seen more than 250 million times, hilariously highlight some of the texts teenagers send their parents. Many are related to money.

“A mom told me the other day that when she told her teenager that she’d registered for a 401(k) at her new job, the response was ‘How much is that in miles?'”
Leighton, who has two children of his own, receives thousands of messages from parents of teenagers across the country — some of which he uses for content. “There’s definitely a lot of good money ones,” he said.
Often questions are the most basic, from “Do I need to tip the eye doctor?” to “Hey, is the ATM going to be open later?”
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Leighton said it’s not necessarily that today’s kids know less about financial topics, it’s simply that these questions are more likely documented in a text now.

“I tell parents not to sweat it, but there are a few doozies in there,” he said.
Among other recent queries: “What is generational wealth and why don’t we have it?” and “Do I have a trust fund?” Another classic: “What is my net worth?”
His new book, “What Time Is Noon?,” covers some of the best — or worst — texts from teenagers.
One section is devoted entirely to money-related topics, often related to a first job or taxes. With no shortage of material, a sequel is likely to follow, he said.
Leighton retired from a corporate career last year. Being a social media content creator is now his full-time second act.

The value of learning financial basics

In many ways, these could be teachable moments, Leighton said — and there has been growing momentum to cover these topics in high school.
As of 2024, only half of all states require or are in the process of requiring high school students to take a personal finance course before graduating, according to the latest data from Next Gen Personal Finance, a nonprofit focused on providing financial education to middle and high school students.
“In the absence of a national or state-wide strategy to teach youth about personal finance in schools,” there is something to be said for online communities that “openly talk about money and finances,” said Billy Hensley, NEFE’s president and CEO. Hensley is also a member of the CNBC Global Financial Wellness Advisory Board.
However, there should an “overall strategy for your individual financial management,” he said.

Further, students with a financial literacy course under their belt have better average credit scores and lower debt delinquency rates as young adults, according to data from the Financial Industry Regulatory Authority’s Investor Education Foundation, which promotes financial education.
In addition, a 2018 report by the Brookings Institution found that teenage financial literacy is positively correlated with asset accumulation and net worth by age 25.
Among adults, those with greater financial literacy find it easier to make ends meet in a typical month, are more likely to make loan payments in full and on time and less likely to be constrained by debt or be considered financially fragile.
They are also more likely to save and plan for retirement, according to data from the TIAA Institute-GFLEC Personal Finance Index based on research collected annually since 2017.

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Americans tend to overspend during the holiday shopping season, and this year will be no different, according to forecasts.
Millennials, many of whom are now parents of school-age children, are leading the charge, a new survey says.
However, leaning on credit cards or buy now, pay later plans to purchase gifts will come at a high cost if those balances aren’t paid off quickly.

Parents tend to splurge on their children during the holidays.
This year, 63% of millennials, many of whom now have school-age children of their own, said they plan to spend the same or more on holiday shopping as they did last year — the highest share of any generation, according to a quarterly report by TransUnion.

Millennials are also more likely to say their income went up over the last few months and that they expect their earnings potential to increase again in the year ahead. TransUnion polled 3,000 adults in October.
“I see a lot of optimism going into the holiday season,” said Charlie Wise, TransUnion’s senior vice president and head of global research and consulting.
For many in this group, recent wage gains have outpaced rising prices and, although the broader unemployment rate has ticked higher, “we are still seeing a steady employment situation,” Wise said. “When people have jobs, that confidence is going to translate into spending.”
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“It’s clear that millennials will play the largest role this holiday shopping season with the greatest expected spend,” Wise said.

Holiday spending between Nov. 1 and Dec. 31 is forecast to increase to a record total of $979.5 billion to $989 billion, according to the National Retail Federation.
Even as credit card debt tops $1.17 trillion, holiday shoppers expect to spend, on average, $1,778, up 8% compared with last year, Deloitte’s holiday retail survey found.
Meanwhile, 28% of holiday shoppers surveyed in September said they still had not paid off the gifts they purchased for their loved ones last year, according to a holiday spending report by NerdWallet, which polled more than 1,700 adults.  

Holiday spending may lead to holiday debt

While most shoppers — 74% — use credit cards to buy holiday gifts, 28% will dip into savings to make their purchases, and 16% will lean on buy now, pay later services, NerdWallet found. Survey respondents could choose multiple payment methods.
Buy now, pay later is one of the fastest-growing categories in consumer finance and is expected to become more popular in the weeks ahead, according to the most recent data from Adobe. Adobe forecasts buy now, pay later spending will peak on Cyber Monday with a new single-day record of $993 million.
However, managing multiple buy now, pay later loans with different payment dates may make it more likely for consumers to get in over their heads, some experts have cautioned — even more than with credit cards, which are simpler to account for, despite sky-high interest rates.

Sometimes, the option to pay in installments can make financial sense, especially at 0% interest, according to Marshall Lux, a senior fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School.
“If used properly, it’s great,” Lux said.
“But a lot of people are going to spread out purchases over a longer period of time and then you get into high interest and a cycle of debt,” he said.
The more buy now, pay later accounts consumers have open at once, the more prone they become to overspending, missed or late payments and poor credit history, other research shows.
If a consumer misses a payment, there could be late fees, deferred interest or other penalties, depending on the lender. In some cases, those interest rates can be as high as 30%, rivaling the highest credit card charges. 
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