Once I first wrote this weblog put up on low-cost housing options, I by no means imagined how a lot it will resonate with individuals. It’s been a long-time favourite on my weblog, and for good purpose. All of us need to save more cash, and housing is commonly the only greatest month-to-month expense within the price range.
However whereas concepts like tiny properties, van life, or dwelling 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 reasonable, artistic, and sustainable methods to decrease your housing prices. Whether or not you’re open to a giant transfer, contemplating multi-generational dwelling, or simply searching for intelligent methods to scale back your month-to-month lease or mortgage, I hope you take pleasure in this put up!
Why Housing Prices Matter So A lot
Housing is often the most important fastened expense in a family price range taking over wherever from 30% to 50% (or extra) of your month-to-month earnings. That’s an enormous chunk, and for those who’re dwelling paycheck to paycheck, it will possibly really feel like there’s no respiration room left for financial savings, debt payoff, and even the occasional self-care splurge.
Chopping your lease or mortgage by only a few hundred {dollars} per 30 days can utterly change your monetary life. However how do you try 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 cost effective methods to stay that may truly work for actual individuals, in actual conditions.
1. Home Hacking: Stay for Much less (or Free)
Home hacking is certainly one of my favourite cost-cutting housing methods. The thought is straightforward: you purchase a multi-unit property (like a duplex, triplex, or fourplex), stay in a single unit, and lease out the others. Ideally, the lease out of your tenants covers your mortgage.
A Reddit consumer shared how they and their associate bought a fourplex with an FHA mortgage, lived in a single unit, and had three rental incomes coming in. They coated their mortgage and had a bit leftover every month.
This technique works particularly nicely for first-time patrons keen to stay in a modest house for a couple of years. You’ll construct fairness, decrease your dwelling prices, and set your self up for long-term monetary freedom.
Tip: FHA loans help 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 Think about
2. Shifting to Extra Inexpensive Areas
This feature isn’t for everybody, however it will possibly unlock critical financial savings. In case your job is distant or you’ve gotten flexibility, think about 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 lease for a small residence to proudly owning a 3-bedroom house 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 worth. 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. dwelling 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 way more viable.
Associated: How We’re Avoiding Changing into Home Poor
3. Multi-Generational Residing
Residing with household could be a game-changer when finished with clear expectations and limits. For some, this may appear to be shifting in with mother and father or grandparents briefly to economize. For others, it’s a long-term resolution that includes shopping for a house collectively and splitting prices.
One Redditor consumer shared how they pooled cash with their partner, mom, and grandmother to purchase a house with two separate dwelling 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 dwelling will also be an effective way to take care of growing older mother and father or share tasks amongst siblings.
4. Cohousing or Co-Possession
Cohousing communities are designed round shared areas, the place residents have personal properties however share facilities like kitchens, gardens, or laundry services. It’s a contemporary twist on communal dwelling, and it will possibly dramatically cut back prices.
Another choice is co-ownership: shopping for a house with a buddy, sibling, or trusted particular person the place each events contribute to the down fee and mortgage however stay in separate areas of the house. I’ve two family members who truly did this a yr 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 complete monetary burden falling on one family. And so they’re changing into more and more widespread amongst Millennials and Gen Zers who really feel priced out of solo homeownership.
Associated: My Month-to-month Single Mother Funds – Residing and Paying Off Debt on $32,000/yr
5. Adaptive Reuse: Changing Non-Conventional Areas
Individuals are getting artistic with what “house” appears like. From transformed college buses to delivery container homes and indifferent yard items (ADUs), some people are reimagining what reasonably priced housing might be.
I just lately examine Robyn Swan, who lives on her personal land in a transformed delivery container. She harvests rainwater, grows her personal meals, and makes use of solar energy. Her complete dwelling prices? Simply $330 per 30 days. That’s lower than some individuals’s automotive funds.
Now, I do know this isn’t for everybody (once more, I want house and like extra conventional comforts), however it’s a superb reminder that we don’t all the time have to paint contained in the strains on the subject of housing.
6. Stay-In Work Alternate or Home-Sitting
Generally the most cost effective housing is… free. You simply must commerce your time or abilities.
Some individuals work in hostels, caretaking properties, or serving to aged residents in alternate without spending a dime room and board. Others rotate between house-sitting gigs or live-in nannying roles that embody housing.
Just a few years in the past, I met a lady who lived at a boarding college the place she helped train and take care of the youngsters who attended. She and her husband had been truly in a position to stay on the property with their younger youngsters as nicely. The household did this for a number of years and I think about they saved some huge cash.
In the event you’re versatile and open to another life-style 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 Dwelling (With a Twist)
I stated earlier {that a} tiny house may not be for me, and I stand by that! However I’ve seen some surprisingly reasonable tiny house setups that provide 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 lease, have a comfy 350-square-foot house, and are saving as much as purchase a bigger house in money someday.
The important thing right here is intentionality. In the event you go tiny to save lots of aggressively, make a plan for the place you’ll park it, how lengthy you’ll stay there, and what your subsequent steps will likely be.
Which Choice Might Work for You?
There’s no one-size-fits-all reply to reasonably priced housing. However In case your lease 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 a bit completely different than the norm.
Housing is among the greatest levers you possibly can pull to alter your monetary future, and also you don’t must stay in a shoebox to do it.
That stated, if downsizing, shifting, or home hacking feels unimaginable on this season, don’t write off financial savings altogether. You can begin decreasing your dwelling bills instantly by trimming what flows out every month. Suppose 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 per week of low-cost meals, and cancel a “meh” subscription you barely use. These aren’t perpetually fixes, however they purchase you respiration room when you work towards greater housing modifications. Take a look at these different weblog posts that can assist you get began:
Let me know within the feedback: have you ever tried any of those low-cost methods to stay? Are you fascinated by a transfer or life-style shift to economize? I’d love to listen to your story.
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