Once I first wrote this weblog submit on low-cost housing alternate options, I by no means imagined how a lot it could resonate with individuals. It’s been a long-time favourite on my weblog, and for good cause. All of us need to save extra money, and housing is usually the only greatest month-to-month expense within the price range.
However whereas concepts like tiny houses, van life, or residing in an RV make for enjoyable YouTube rabbit holes, let’s be actual. A few of us want far more house than that. (I do know I do!)
That’s why I needed to revisit this matter and take it in a extra sensible path. I’ve been brainstorming some lifelike, artistic, and sustainable methods to decrease your housing prices. Whether or not you’re open to a giant transfer, contemplating multi-generational residing, or simply in search of intelligent methods to cut back your month-to-month hire or mortgage, I hope you get pleasure from this submit!
Why Housing Prices Matter So A lot
Housing is often the biggest fastened expense in a family price range taking over anyplace from 30% to 50% (or extra) of your month-to-month revenue. That’s an enormous chunk, and when you’re residing paycheck to paycheck, it may well really feel like there’s no respiratory room left for financial savings, debt payoff, and even the occasional self-care splurge.
Chopping your hire or mortgage by just some hundred {dollars} per thirty days can fully change your monetary life. However how do you do this with out downsizing right into a shed or shifting in with 4 roommates you discovered on Craigslist?
That’s what we’re diving into: the most affordable methods to reside that may really work for actual individuals, in actual conditions.
1. Home Hacking: Reside for Much less (or Free)
Home hacking is certainly one of my favourite cost-cutting housing methods. The concept is straightforward: you purchase a multi-unit property (like a duplex, triplex, or fourplex), reside in a single unit, and hire out the others. Ideally, the hire out of your tenants covers your mortgage.
A Reddit person shared how they and their accomplice bought a fourplex with an FHA mortgage, lived in a single unit, and had three rental incomes coming in. They lined their mortgage and had just a little leftover every month.
This technique works particularly properly for first-time patrons prepared to reside in a modest house for a couple of years. You’ll construct fairness, decrease your residing prices, and set your self up for long-term monetary freedom.
Tip: FHA loans will let you purchase multifamily properties with as little as 3.5% down—so long as you reside in one of many items.
Associated: Non-Conventional Housing Choices to Take into account
2. Transferring to Extra Inexpensive Areas
This selection isn’t for everybody, however it may well unlock critical financial savings. In case your job is distant or you will have flexibility, contemplate relocating to a decrease cost-of-living space.
One couple I examine on-line moved from California to Iowa. They went from paying $2,500/month in hire for a small condo to proudly owning a 3-bedroom residence with a yard and a $900/month mortgage. The decrease housing prices allowed them to begin saving, journey extra, and even discover early retirement.
Even simply shifting an hour away from a serious metropolis could make an enormous distinction in value. I’m initially from Northern Illinois, and whereas we lived inside an hours’ drive of Chicago, I particularly selected to cool down within the Chicagoland suburbs vs. residing within the precise metropolis to keep away from paying extra for housing and different bills. And with extra distant work alternatives obtainable than ever earlier than, this technique is changing into far more viable.
Associated: How We’re Avoiding Turning into Home Poor
3. Multi-Generational Dwelling
Dwelling with household is usually a game-changer when performed with clear expectations and bounds. For some, this would possibly appear like shifting in with mother and father or grandparents quickly to save cash. For others, it’s a long-term resolution that includes shopping for a house collectively and splitting prices.
One Redditor person shared how they pooled cash with their partner, mom, and grandmother to purchase a house with two separate residing areas. They cut up the mortgage and utilities, whereas nonetheless having privateness. The association saved everybody cash and offered built-in childcare and assist.
Multi-gen residing will also be an effective way to take care of ageing mother and father or share duties amongst siblings.
4. Cohousing or Co-Possession
Cohousing communities are designed round shared areas, the place residents have non-public houses however share facilities like kitchens, gardens, or laundry amenities. It’s a contemporary twist on communal residing, and it may well dramatically scale back prices.
Another choice is co-ownership: shopping for a house with a good friend, sibling, or trusted particular person the place each events contribute to the down fee and mortgage however reside in separate areas of the house. I’ve two kin who really did this a 12 months in the past and it’s been figuring out for them.
Whereas not for everybody, these fashions supply the advantages of possession with out the total monetary burden falling on one family. And so they’re changing into more and more fashionable amongst Millennials and Gen Zers who really feel priced out of solo homeownership.
Associated: My Month-to-month Single Mother Finances – Dwelling and Paying Off Debt on $32,000/12 months
5. Adaptive Reuse: Changing Non-Conventional Areas
Persons are getting artistic with what “residence” seems to be like. From transformed college buses to transport container homes and indifferent yard items (ADUs), some of us are reimagining what reasonably priced housing could be.
I not too long ago examine Robyn Swan, who lives on her personal land in a transformed transport container. She harvests rainwater, grows her personal meals, and makes use of solar energy. Her complete residing prices? Simply $330 per thirty days. That’s lower than some individuals’s automobile funds.
Now, I do know this isn’t for everybody (once more, I would like house and like extra conventional comforts), nevertheless it’s an excellent reminder that we don’t at all times have to paint contained in the traces relating to housing.
6. Reside-In Work Alternate or Home-Sitting
Generally the most affordable housing is… free. You simply need to commerce your time or expertise.
Some individuals work in hostels, caretaking properties, or serving to aged residents in change without spending a dime room and board. Others rotate between house-sitting gigs or live-in nannying roles that embrace housing.
A number of years in the past, I met a girl who lived at a boarding college the place she helped educate and take care of the children who attended. She and her husband had been really capable of reside on the property with their younger children as properly. The household did this for a number of years and I think about they saved some huge cash.
When you’re versatile and open to another way of life for some time, this may be an effective way to save lots of aggressively towards different targets like debt payoff or a down fee.
7. Tiny Residence (With a Twist)
I mentioned earlier {that a} tiny residence won’t be for me, and I stand by that! However I’ve seen some surprisingly lifelike tiny residence setups that supply consolation and affordability. For instance, one couple I examine constructed a tiny home on wheels for below $30K and parked it on a relative’s land.
They pay no hire, have a comfy 350-square-foot residence, and are saving as much as purchase a bigger residence in money at some point.
The important thing right here is intentionality. When you go tiny to save lots of aggressively, make a plan for the place you’ll park it, how lengthy you’ll reside there, and what your subsequent steps will probably be.
Which Possibility May Work for You?
There’s no one-size-fits-all reply to reasonably priced housing. However In case your hire or mortgage is consuming up most of your paycheck, it’s okay to query it. It’s okay to need extra freedom and fewer stress. And it’s greater than okay to decide on a path that appears just a little completely different than the norm.
Housing is among the greatest levers you may pull to alter your monetary future, and also you don’t need to reside in a shoebox to do it.
That mentioned, if downsizing, shifting, or home hacking feels unattainable on this season, don’t write off financial savings altogether. You can begin decreasing your residing bills instantly by trimming what flows out every month. Assume groceries, utilities, subscriptions, transportation, and invoice timing.
Small wins stack up quick: renegotiate a few payments, align due dates so that you’re not paying late charges, plan every week of low-cost meals, and cancel a “meh” subscription you barely use. These aren’t perpetually fixes, however they purchase you respiratory room when you work towards larger housing adjustments. Take a look at these different weblog posts that will help you get began:
Let me know within the feedback: have you ever tried any of those low-cost methods to reside? Are you desirous about a transfer or way of life shift to save cash? I’d love to listen to your story.
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