Lowering Your Monthly Expenses - Housing
If you've been following us for the last year, you'll know that we love to save money on food by cooking our own meals. Aside from food, aren't there other ways to save money? Why yes there is! There are 3 main categories of expenses that you can focus on to save money - Housing, Transportation, and Food. This is just part 1 of a 3-part segment on how you can save money in your monthly expenses.
We have big plans for the money we save. We save for our retirement. We save for our future family. We save for future traveling. We simply want to practice delayed gratification and be more intentional about it and saving where we can helps us flex those muscles. Though our favorite category for saving money is food, it is not the most impactful. If you think about it, saving money on housing could be the most impactful in terms of both quality of life and quantity saved if you are flexible enough. Those two factors are highly dependent on how you feel about roommates and the general price of cost of living in your city. With all of these options listed, you have to ask yourself what do you need and what you do want. Make good value decisions for yourself. Let's jump into it!
Owning a Home
If you have a mortgage, you can consider refinancing your home, renting out a room in your house, moving to a smaller home, or moving to a different area.
Refinancing your home - If you're looking at living in your home for at least 10 more years, refinancing your home may be a smart move. Explore your options without having to commit to anything and see if you lower your mortgage interest rate. Use a mortgage calculator to see if switching make sense.
Rent out a room in your house - If you have an empty room and a spare bed, consider renting your room out. Many people refer to this strategy as "house hacking" and there are plenty of resources out there to help you navigate it. If you don't want to deal with a long-term renter, you should look into hosting through Airbnb. With these strategies, you can take the money you're making and add it to your mortgage payment! If you're the outgoing type, having a long-term renter or multiple short-term renters can be a great source of companionship!
Moving to a smaller home - If you don't feel comfortable in your home because it's too big or you find yourself overwhelmed with how much stuff you have, moving to a smaller home can force you to clear the clutter and helping you live more simply! Think of the potential lower energy, heating, and maintenance costs. But if you're in it mainly for the simple living, saving money may just be an extra added benefit :)
Moving to a different area - Similar to the previous point, if you're living in a metropolitan area but want to lower your costs, it may be time to consider moving to the suburbs where housing costs are lower. An additional benefit may be the fact that you could pay less taxes on your property. However, this tends to be more difficult if you work in the downtown area of your city. The added commute can be a really hot button topic, so this decision can be incredibly difficult for some. On top of that, if you have kids in your family, you may consider the public school system. This may be the toughest choice you may have to make if you have a mortgage.
Renting
If you are renting, you can consider getting a roommate, moving to a more affordable apartment, or trying to negotiate your rent.
Negotiating your rent - If you have a good reputation of paying your rent on time, simply asking for lower rent may get you the result you want. If not, negotiating can be one of the best things you can do to lower your cost of rent. A good negotiation often requires having leverage on your side. If you have a strong savings account and emergency fund, your leverage can be to offer to pay multiple months of rent at one time instead of monthly. My policy on negotiating is "Never ask, always 'no.'"
Get a roommate - Splitting the cost of an apartment is probably the most obvious option, but not everyone is into the idea. This strategy can work well if you know the person you're roommates with, or if you do your due diligence with strangers. Either way, getting to know a person before rooming with them is always a good idea. Set up a regular chat to get to know them, or come with a set of questions and have an interview!
Move somewhere else - If you don't want a roommate and your landlord isn't budging when you ask for lower rent, it may be time to move! If you are in a city that has many options for renters, it's time to start your search. If you need help, you can often find a realtor in your area that will help you find an apartment. Don't go at it yourself if you have a resource that will help you do it for free! Find some good friends that will help you move and you're in business. Good luck!
When Camilla and I get married, we hope to rent out one of the rooms in our house to make some additional income. It's one of the few strategies we're open to at this stage in our lives. Do you have any great tips for reducing your monthly housing costs? Please share any general strategies you can think of by emailing us at faithandfi@gmail.com!
Go out there and make moves!
Khang
P.S.
There are plenty of other things you can do in your household to lower your costs such as lowering your electricity bill, heating bill, water and sewage, internet and cable, and even your phone bill. We'll probably write about it some time in the future!