Last updated January 12th, 2020.6 minute read
I talk a lot about the “big three” expenses and what I like to call a top-down approach to cutting them. I firmly believe this is the most expensive way to do so, even though you often hear a more bottom-up approach. Thus, in this post, we’ll take a look at the very biggest expense – how you can save money on housing.
You may have heard about many of these before, but are you actually doing them? Because, of course, talking about doing something doesn’t do us much good. I’ve started doing some of them but would like to do more.
1. Find a Roommate (or Several)
I’m starting with this because this is something I have, in fact, done. When I first moved out of my parents’ house, I moved in with random Craigslist roommates. It wasn’t exactly terrible, but it also wasn’t the type of experience I was itching to repeat.
So, for the next three and a half years, I lived alone. In a one-bedroom apartment. The thing is, 1BRs are nice, but they are also one of the least economically-savvy ways to live. The only thing more wasteful would be to live in a giant house with an expensive mortgage by myself.
I was also renting a garage for no purpose other than to charge my car – that was costing me $125/month, so it was definitely a temporary solution.
So, several months back, I moved into a house with roommates. I made it a point to find one with a garage space where I could charge my car. I don’t pay extra for that, so I literally cut my rent in half. Exactly in half (if you include the cost of the garage).
Sure, I share a bathroom now, and there’s obviously less privacy, but I’m making a sacrifice in order to create a better life for myself. It may not be as cushy, but I think it will pay off in the long run.
Doing so is allowing me to be more flexible, not have to go into an office every day, and work on some cool new business ventures.
2. Downsize Your Home
This one may seem obvious, but it’s still worth mentioning. Why? Because the HGTV-ification of our homes has made them substantially larger. I’m referring to homes in the US, specifically. Home sizes here have increased at an astounding rate.
People live in these giant houses nowadays, and barely even use most of the space! It’s crazy, but true.
Is it really HGTV that’s responsible? In reality, that’s only one factor among probably dozens of them. I’m not an expert on home sizes, but the stats don’t lie: the average square footage of homes has tripled since 1950.
This is one of my favorite scenes from “Arrested Development”:
While this is, of course, a bit of an exaggeration, it illustrates how things can sometimes go down when a salesperson is working their magic. “That way, we’ll have it!”
No, your realtor may not hesitate to sell you a larger house, but do you really need that much? Lenders may be more apprehensive about who they choose to lend to since the sub-prime mortgage crisis, but that doesn’t preclude people from buying too much house.
Moving is a hassle, and whether or not it’s worth it to do so may vary, but it’s an easy one to consider – especially if you live in a huge house.
3. House Hack
This is similar to #1, but there are differences. The biggest difference is in who owns the property. I rent a bedroom in a house, but I don’t own the place.
When you house hack, you are the owner. There are a few ways to do it:
- Rent out a spare bedroom/bedrooms in your single-family home
- Rent out spare bedrooms in a condo
- Buy a multi-family home, such as a duplex, live in one unit, and rent out the other(s)
House hacking can be a great way to save money. Plus, if you find that it’s working especially well, you could even decide to scale up the operation and acquire multiple properties. Doing so is a great way to work toward financial independence.
But even if you don’t end up acquiring multiple rental properties, this is going to be a great way to save money on housing.
4. House Sit
Admittedly, this is one I don’t want to give away all the details on because it’s an increasingly competitive scene and I happen to do it myself.
The basic idea is that it’s a barter. You find someone who is going out of town and needs someone to watch the place while they’re gone.
Usually, the reason they need a sitter is because they have cats, dogs, or sometimes farm animals like chickens and even horses if it’s in a rural area.
Often, you can get free lodging while you’re on a trip, or if you’re especially headstrong, even do it full-time. It’s not necessarily easy to do it full-time, but it can be a nice gig for some people.
5. Stay With Friends When Travelling
This one is similar to #4, except it’s even simpler. In a world that’s becoming increasingly globalized, primarily thanks to the internet, it’s not incredibly difficult to be connected to people all over the world.
I personally know several people who live in many different countries who have said they would let me crash at their place if I were ever in the area. I meet these people playing PC games online or in Facebook groups.
Whether or not you would feel comfortable/safe staying with someone you’ve only met online is obviously up to you. It kind of depends on the relationship, so you should, of course, use your best judgment.
But, if it works it, this is also an easy way to save money on housing.
6. Rent out Your House While You’re Away
This would be, for example, putting your house up for rent on Airbnb or Vrbo while you’re out of town. Technically, you could call this an income or cash-flow strategy. If you’re still paying your mortgage, though, you could pump the money right back into your mortgage.
Whether or not you are comfortable having random strangers staying in your house is up to you, but the good news is that you can always try it. If it isn’t working out, your guests will be gone once the weekend is over, anyway.
I would definitely recommend trying it out, especially if you have a house in a good location that would attract guests.
What’s Your Favorite Way to Save Money on Housing?
As I always say, it’s best to use a top-down approach to cut expenses. That means, yes, you can buy the f**kin’ latte. Seriously. That isn’t going to make that big a difference in the long run.
These are just a few ideas that came to me, but I’m sure there are others. Do you have a favorite way to save money on housing? Let me know in the comments.