How to Save Money on Your Living Situation (As a Millennial)

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Saving Money
Rental costs may seem crazy if you've just graduated and want to move out on your own. Here's how to save money on your living situation.

Rent is easily one of the biggest monthly expenses any of us will face. Unfortunately, if you’ve just graduated from college or are in an entry-level position in your 20s, it can be a struggle to afford rent on your own.

Don’t worry – there are plenty of ways to save money on your living situation if you’ve been taken aback by rental prices in your area.

Even if you’re not particularly looking to save money here, it makes sense to want to pay as little as possible on your living situation. Why? Saving hundreds on this expense means more of your money can go toward paying off your student loans, or your savings goals.

So how can you save money on your living situation, especially as a 20-something trying to figure out their way in life? Let’s take a look at some of the methods you can use.

Grab Some Roommates

Rooming with others is the first thing that comes to most people’s minds, as it’s a simple solution to cutting down your rent expense.

This doesn’t have to be the same as living with roommates in college, either. You should be able to afford a bigger place with several people splitting the cost, so renting a house is an option if you’re not living in the city.

A word of warning: think long and hard about who you choose to room with. Moving in with your best friends might sound like a lot of fun, but are your friends in a financially stable position to afford rent?

Living with friends can test of the strength of your relationship. If you’ve known each other for a while, think about their quirks and how they handle things. Can they be relied upon to do their fair share of upkeep? To pay rent on time? To stay out of your stuff?

If not, think twice about living with them. Instead, look at listings to see if anyone is looking for a roommate or two. There should be plenty of house-share options available.

Of course, if you’re living in the city, sharing a house with others might not be an option. But even splitting a 2-bedroom apartment could be cheaper than renting a studio apartment by yourself.

Do the math and make sure it works out in your favor, and don’t forget to include utilities!

Own a Place? Rent Out a Room

If you’ve already purchased a place to call your own, or are thinking about becoming a homeowner, try renting out a room to make your mortgage more affordable.

I know, you probably bought a place specifically to get away from having roommates, but the benefits are undeniable. Depending on where you live, you might be able to cover most or all of your mortgage payment with a rental payment from someone else.

Think about it – you’d essentially be living in your place for free! That’s a ton of money freed up to go toward any other financial goals you may have.

This doesn’t have to last forever, either. If you’re expecting to get a decent raise in the next few years, having a roommate will help out in the meantime. You don’t have to have permanent tenants if you don’t want to!

Again, just be careful who you rent to. While you may want to help out a family member, be sure they actually intend on paying you every month. Lay the ground rules and set expectations before they move in with you.

Live With Your Parents

I can practically hear you groaning now. You’re done with college, you’re ready to enter the “real world” and live on your own. You don’t want your parents help anymore. You want to be free!

I get it. But sometimes, you simply can’t afford to live on your own. Do you want to commit financial suicide because you’re too proud to live with your parents?

If you don’t have the best relationship with your parents, that’s a completely valid reason not to move back home. But if your parents are welcoming you back with open arms, and giving you a deep discount on rent (or letting you live there rent-free), you might want to think about taking them up on the offer.

I actually lived with my parents throughout college and a bit after. Sound lame? Maybe, but the five-figure emergency fund I had amassed by the time I moved out wasn’t lame. I had no problems making my student loan payments because I was only paying $100 in rent each month, and that was accomplished on $12/hr at an entry-level job.

At the time, I lived in NY. Studio apartments were $850+ a month, and that wasn’t worth moving out for. One bedroom apartments were over $1,000, and that was pretty much half my paycheck. That wasn’t even counting utilities!

Why didn’t I move in with others? While I love my friends, they wouldn’t make the best roommates. I also didn’t feel like being adventurous and moving in with strangers. It works for some, but I decided to take the safer and cheaper route.

Do I regret it? Absolutely not. I was still able to hang out with my friends (who also still live with their parents, several years later), have them come over to hang out, and I didn’t really feel like we were missing out on anything.

If you want to make a huge dent in your debt or your savings, living with your parents (or guardians) is the way to go. Dedicate yourself to maximizing your money and moving up in your job for a year or two until you’re happy with the progress you’ve made. Then think about moving out.

Still Want to Move Out?

Maybe these options aren’t for you. If you really need to move out on your own, but want to save as much money as possible on rent, look into these solutions:

  • Research the available options you have and don’t be afraid to negotiate when it makes sense. This works best if you have a stable living situation you can fall back on, in case you need to walk away.
  • Be content with a smaller, slightly older space. Don’t look to live in absolute luxury – your first apartment isn’t going to be amazing, and it doesn’t have to be. You don’t want to struggle to afford where you live. Just make sure it’s safe.
  • Get a place in a less expensive area. If you can get a job in a cheaper location, chances are, housing will be cheaper there as well. I went from paying $1,250 for a 1-bedroom, 1-bathroom basement apartment in NY to paying $1,040 for a 2-bedroom, 2-bathroom apartment in NC (utilities included for both).
  • If you want to live in the city, consider the tradeoff with transportation. Can you get away with not having a car? Then you’re saving on gas and insurance, and might be able to swing a higher rent amount.
  • Sign a longer lease. If you’re okay living in the same area for a while, signing a longer lease usually means cheaper rent. Landlords want tenants who will pay and stay.

Have you made your living situation as cheap as possible? How have you done it? Did you move out right away, or did you live with your parents for a period of time?

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