Five Innovative Ways to Save on Housing
As part of a Focused Frugal February, I’m going through some of the bigger budget categories and deep diving into how to save money on each of them. The goal is for you to pick ONE category to focus your efforts on spending less this month because humans are not meant to multi-task. As part of that effort, I wanted to evaluate 2 different articles over the next two Mondays to discuss various housing situations and what to look out for when you are looking for housing.
The first article on housing comes from CNBC, “Five Innovative Ways to Save on Housing.” Some of these ideas are not exactly innovative, but can be viewed that way when compared with conventional thoughts on home purchases. Regardless, they’re options that everyone should be aware of and take into consideration.
Choose an unconventional lifestyle
The example they use here is a self-made millionaire who sells his home and lives exclusively in air bnbs. This is something that could be done, or there are many folks who permanently travel as their jobs allow them to work remotely from anywhere. There are obvious sacrifices to be made with this lifestyle, but if you are up for exploring and don’t need a sanctuary that could be a home base this is something to consider.
Set a budget that’s lower than you can afford
There are many reasons that you might want to set a budget lower than what you can afford. For Kayla and I, we are considering staying lower than what we can technically afford since we plan on making the moves over the next year or two to go from being DINKs to SIKs. Meaning, we’re moving from both working with no kids, to my wife quitting in order to take care of our future children. So, we need to plan for our future budget as opposed to what we can pay for now.
What this really affords, is flexibility. It allows for your circumstances to change and the monthly mortgage payment not to become an anchor.
Live in a trailer
Okay, this one is a little outside the box. However, it’s an option that could allow you to grow your savings rate in either a permanent or temporary state. It also would allow for be viable depending on many factors like:
- Where you live- Could a trailer be located in an area where it would be safe and still provide the life you want?
- The size of your family
- Your comfort level with the potential size of your new dwelling coupled with the size of your family
Meanwhile, the benefits could be not only saving on expenses, but the flexibility to hook up and travel while still being able to take your home with you. This option is definitely not for everyone, but if you can make it work for your, then more power to you.
Move outside the city
Andrew Hallam, author of Millionaire Teacher, lived an unconventional lifestyle by house sitting in order to avoid renting and then when he purchased a home, moved over 30 miles away from where he worked. However, he still rode his bike there every day.
I have mixed views on this item. Yes, housing will be less expensive as you move outside of the city. However, it is important to add in the cost of your time that will be spent commuting. I have coworkers who commute 2 hours, one way, every day. That means that for over 4 hours every single day, they’re just in the car. To me, this isn’t a life well-lived. So, think about the time for yourself, for you family and for furthering your interests outside of work that you’d be sacrificing for a long commute.
In general though, moving to a less busy area can save some money. Just ensure that it aligns with your values.
The biggest mistake first-time home buyers make is not keeping an open mind.Cathy Derus, CPA and founder of Brightwater Financial
Limiting your options to a certain neighborhood or even town can be setting yourself up for failure. Combining the concept of buying less house and looking in other neighborhoods than those you had previously looked at can help bring your overall costs down without sacrificing the end product.
During the search for a new home, whether you’re planning on renting or buying, odds are that there will be a lot of suggestions for places. Try not to ignore them and just take a look. You never know what hidden gem you may find.
A sixth option that I wanted to add into the mix is house hacking. This can mean a few different specific situations, but the overall concept is constant. Hacking your living situation with either roommates or renters to pay for some or all of your living costs. Kayla and I did this when we purchased our first two family home in 2018. We rent out the upstairs unit and it pays for the majority of our housing costs. Then, when we move out, we will keep this property and rent out both units.
If you are in a situation where you wouldn’t mind sharing some amenities with others, this could work out very well in your favor. Even if you have kids, this could still be a path forward for you.
Wrap It Up!
While some of these options can be seen as “out there,” there is still merit at taking a step back and evaluating the potential for a different type of lifestyle or living situation. If we all have different priorities, values and beliefs, why do we all feel the pressure to follow the same path in life of the home with the white picket fence?
Have you done any of these things or live in an alternative lifestyle as it relates to your housing? Let me know in the comments below!