2. Get a Roommate
The other methods we’ve mentioned could save you hundreds of dollars a year. This method literally slashes most of your expenses in half. Imagine if your rent, electric bill, gas bill and cable bill were all suddenly cut by 50 percent — and you had an extra set of hands to help out in the garden.
Of course, getting a roommate can be a major sacrifice if you’ve been living on your own. Having the privacy and freedom of your own place is one of the things we all strive for, and giving that up is a big step for some people. But if you’re serious about saving money, there are few better methods.
If you want to make this situation work, you need enough space in your place for someone else. You’ll also need to work out all those little details like who does the dishes and so on. A thorough background check and security deposit is in order if you’ll be acting as the landlord.
If you already live in an apartment, taking on a roommate should be relatively simple. You’ll probably have to ask the landlord, but they’ll typically deal with the lease, adding the new tenant and other details. If you’re going to rent out space in your own home, there will be more complications. You’ll have to learn the legal aspects of the landlord/tenant relationship, and your city or town may require special permits or inspections for properties that will be rented out.
1. Move Somewhere Cheaper
Moving to another city is the ultimate step you can take for long-term savings. Living in a large, major city will always be more expensive than living in a small town because property values are so high. That drives up virtually every other price in the city.
For example, moving from Los Angeles to Buffalo, N.Y. will cut your housing costs in half. Health care will cost 16 percent less, utilities 14 percent less, groceries 13 percent less and transportation 8 percent less . Over several years, you could save tens of thousands of dollars. That said, moving and buying a new home is expensive, so that cuts into your savings. You’ll also have to find a job in your new city, and in a city with a low cost of living, you may have to take a pay cut.
In 2009, Forbes listed the best areas in the U.S. to live cheaply. The top city was Manchester, N.H., but note that good cities with low costs of living have certain characteristics. They have medium populations (enough for some job opportunities and cultural institutions), but that population has undergone a decline in the last few decades (which reduces property values due to supply and demand).
If you don’t need an urban lifestyle, rural areas usually offer low property values. However, the cost of living can be higher due to lack of access to public transportation and other services you might find in a city.