Housing costs are one of the most expensive parts of any budget. In fact, according to the US Bureau of Labor Statistics, the average person spends 37 percent of their take-home pay on housing-related expenses – ouch.
Whether you’re looking to pay off debt, save for retirement, or simply more wiggle room in paying the bills, most of us could certainly use an extra five to ten percent of our take-home pay back in our budget. You can do so by lowering your cost of living. Here are four easy ways to make your living situation more affordable.
1) Consider Where you Work
Should you live close to where you work, even if it’s more expensive? Well, it really depends.
Take where I live for an example – Seattle. It can cost hundreds, if not a thousand dollars more per month to live downtown near the city center. In comparison, places outside the city can be bigger and more affordable, while still having plenty of conveniences. In this case, living further away may result in additional time and money spent commuting, it may still be cheaper in the long run.
While that’s an extreme example, you can likely see similarities to where you live. It’s almost always more expensive to live downtown or in a popular business area because everyone wants to live there.
However, many of my friends in Seattle work and live downtown. They pay higher rents, but they forgo cars in favor of walking everywhere, live in simple apartments, or live with roommates. I know plenty of people who save a lot of money by living close to where they work.
So, it’s up to you to do the math to figure out if it makes more sense to live near work, or further away. Either way, you’ll likely have to make some compromises to find a place suitable (and affordable) for you.
2) Downgrade Your Space
When my husband and I moved from a small southern city to Seattle, we knew we had to lower our living expectations. Previously, we had been living in a spacious and modern two bedroom apartment close to work. We knew with Seattle prices, we would have to pay an astronomical amount for a similar apartment in Seattle. Since it was out of our control, we chose to lower our expectations.
We decided to prioritize a few features that were important to us, such as being within walking distance to stores and restaurants, and having an in-unit washer and dryer. While we liked having more space in our previous apartment, we decided to sacrifice that in order to find something that met our expectations.
With housing, you pay for all the features you get. If you want the perfect house or apartment, it will prove to be fairly costly. But if you can pick a couple of features that are must-haves and compromise on the rest, you’ll find many more options available to you within your price range.
3) Get a Roommate
I know not everyone is keen on sharing their space, but before you skip to the next section, hear me out. Getting a roommate is hands down the fastest way to lower your living expenses.
When I first graduated college a number of years ago, I had rented out my own apartment. My income was small, but I convinced myself I deserved to have my own place. Even though I could “technically” afford it, I found that I wasn’t able to make much financial progress anywhere else. So after my lease was up, I decided to move back in with roommates, and it was the best decision I could have made.
With that one small decision, I ended up saving over $500 a month in living expenses (plus, with roommates, I could afford a much nicer apartment). Not only did my rent lessen, but we split the water, electricity, trash, and internet bills, which saved me a lot of money as well.
Finding a roommate may not be the most popular answer, but it is one of the simplest ways to lower your living expenses. Just be sure to fully vet anyone before you move in with them to ensure you will get along.
4) Move to a Less Expensive City
Finally, if you’ve tried everything and are still struggling to make ends meet, then it may be time to consider more drastic options.
It can be incredibly challenging to come to terms with, but sometimes, it may just not be worth it to live in an expensive city.
When we moved to Seattle, I was absolutely shocked at the price of rent and homes. Thankfully, we moved to the city for work and had cost of living increases factored in, so it lessened the blow slightly. Had we not had that, I don’t know if it would have been worth it for us to move.
Don’t get me wrong – I love living in a major city and am so thankful to be able to afford the lifestyle that comes with it. But for some people, it can be tough to make ends meet with increasingly high cost of living expenses.
If you still are having a difficult time affording your living situation, you have a couple of options. One would be to move to a less expensive area. Relocation and uprooting your life isn’t an easy decision, but it could certainly ease the financial burden.
Secondly, you could work to side hustle to increase your income. This is still something I do, and the extra income helps me reach all of my financial goals significantly faster than if I just relied on my 9-5 income. If you’re committed to living where you live, then you may want to consider ways to increase your income to be able to afford it. Trust me, the burden of not having to worry about how you will pay your next bill is so worth it.
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Have you ever tried one of these tips to lower your living expenses? What other creatives methods have you tried?
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We are thinking about using Airbnb to find temporary roommates! We are still fixing up our extra room, but feel it could be a great way to bring some extra income into our house.
Oh, that would be fun! I’ve always wanted to host Airbnb – I just don’t have enough space!
Those are some excellent tips. I’ve been thinking about getting a roommate, but I love my space.
It doesn’t hurt to have a roommate! Even just 6 months can save you a lot of money.