Housing is one of the single most considerable costs people face in the modern world. Many people find they can easily spend a third of their income (or even more) to pay the rent or mortgage. This can mean all kinds of budget problems. Fortunately, there are ways to bring these costs down. It’s possible to reduce the amount of money you’re spending and still get the kind of housing arrangements that offer privacy, safety, and convenience. And decreasing your living expenses can lead to an increase in your quality of life.
Option 1: Downsize to a Smaller Apartment
If you’re a young person just starting in life, chances are you don’t need a lot of living space. The same is true of empty-nesters and people who are retired. Think about how much space you’re using right now. You might have a three-bedroom house when all you need are two bedrooms. That single additional room can cost you hundreds of dollars a month. Instead, look for smaller options. You’ll often be delighted at how much you can save by aiming for a one-bedroom or even a studio instead of something even a little bit larger.
Option 2: Move to a Less Expensive Area
Some areas are just more expensive than others; that’s just a fact of life. If you live in an expensive-housing area, you can shave lots of money off your housing costs by choosing to live elsewhere. Many cities have much cheaper housing options, and in the digital age, it’s often possible to work remotely. That makes it easy for people to head off to a different place and reduce the amount of money they pay in housing. You’ll save money on housing and see a brand new place at the same time.
Option 3: Get Roommates
Roommates are another way to reduce your housing costs. A roommate can help split your housing costs in half; multiple roommates can decrease your mortgage or rent even more. At the same time, bear in mind these arrangements can be highly complicated even if you’ve done it before. It’s a good idea to have your roommates sign an agreement before you agree to share housing. This way, you have something in writing if there are ever disputes down the line. Agreements don’t have to be complicated; you can find a roommate agreement template online and modify it to your needs.
Option 4: Airbnb
If you’re lucky enough to have a back house, mother-in-law suite, or other section of your home with a separate entrance, consider operating as a host on Airbnb. You don’t have to take in paying guests all the time; you won’t be running a rooming house. You can simply list your property on the service for just the dates you’re willing to play host, and mark it out the rest of the time. The extra money from Airbnb guests could help with your mortgage payments.
Option 5: Refinance Your Mortgage
In the last few years, mortgage interest rates have fallen by several points. If you have an older mortgage, now makes the perfect time to look into refinancing. This is a good choice if you’re planning to live in a given location for at least the next several years. There are initial fees that can run several thousand dollars. However, those fees can be rolled into the rest of the mortgage and paid off over time. In the meantime, you can benefit from reduced payments each month that still have a tax-deductible interest. Do a quick credit check and find out how much you can save.
Option 6: Co-Living Arrangements
Co-living arrangements where people share housing costs have become increasingly popular in recent years. These are all about living in a place with others at the same time. They can be informal or formal. If you know people who are looking for a place to live, ask them if they want to set up an arrangement for housing with you. In other instances, you’ll find specific co-housing arrangements that have already been set up by people in the area. You can often join them and share in housing expenses for vastly reduced rent.