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If you could meet your basic needs while spending a third less than you do now, what could you do with the money you saved?
Consider Grant Sabatier, profiled in a Business Insider article on housing.
He saved up $25,000 in 2010 and 2011, primarily by cutting the cost of his housing. He invested the money and, within a few short years, it grew to $100,000.
Sabatier is a self-made millionaire now, and although his business got him there, his decision to cut his expenses almost certainly helped.
Here’s the thing; clipping coupons and shopping sales can help, but for the biggest savings you have to look at the biggest expenses.
That’s why, to really change your life financially, it makes sense to start by finding cheaper housing.
Business Insider reports that more than 11 million renters pay out over half of their income for housing, and almost 8 million homeowners pass that 50% mark too.
In fact, most Americans spend more than 30% of their pre-tax income for housing.
But paying out even 30% of your pre-tax income, which is the traditional standard for affordable housing, is unnecessary.
Here are some of the life-changing alternatives you have, ranging from radical to just plain rational…
Table of Contents
1. Stay Home With Your Parents
If you’re still living with your parents, you’re not the only one. In fact, a recent NPR report says that for the first time in over a century more adults are living with parents than with partners.
It makes sense, at least as a temporary measure. If you bank what you would have spent on rent, in a couple years you should have enough money for a down payment on a house, an extended trip around the world, or any other life-changing goal you choose.
By staying at home in my early 20s I was able to save money for investing and for the down payment on my first home.
2. Move Back Home
If you’re on your own, going back home is another option. Let’s say you offer your parents $300 per month to stay in their extra room, versus $1,000 you currently spend on rent and utilities.
You’ll save $8,400 per year! Invest that and in three years you might easily have $30,000 saved up, enough to start a business or… (use your imagination).
My wife and I lived with my parents briefly after selling our home, as a way to save money before buying the next house.
3. Move In With A Friend
Millionaire Robert Kiyosaki says he and his wife moved into a friend’s basement when times were tough, in part to avoid getting jobs while they laid the foundations for the business that made them wealthy. Now that’s life-changing frugality!
If you offer to help with the bills, moving in with a friend can be a great financial move for you and your friend. If it cuts your housing cost by $500 per month, and you actually set aside that money, you’ll be $6,000 further ahead after just a year.
4. Have A Friend Move In With You
If you like where you’re at but want to cut your housing cost in half, invite a friend to move in and share the expenses. This gives you more control than living in other people’s homes.
I had friends live with me when I was younger, always charging a weekly rate that included everything, to keep it simple. I had a few strangers move in as well, which brings us to the next possibility…
5. Buy A Home With Extra Rooms To Rent Out
My first home had three bedrooms, so at some point I moved into the smallest one and rented out the other two. Since I paid off the mortgage quickly, I soon found myself not only living for free, but making money on the home I lived in.
As a result I was able to cut back to one day of work per week and to travel frequently. For more on this strategy see my post, “How To Pay Off Your Mortgage By Renting Out Rooms.”
6. Get Free Housing With A Job
Some jobs come with a house or apartment.
For example, some storage facilities have an onsite manager, and the position comes with housing. Apartment managers also frequently get a place to live as part of their pay. Nannies usually get housing, as do some elder-care providers.
Searching the keywords, “housing provided” on Indeed.com turns up hundreds of positions, ranging from a hotel job in Death Valley ($12/hour and free housing) to a line cook, a ranch hand, and even a museum intern position that comes with a place to stay.
7. Join The Peace Corps
When you join the Peace Corps, you get housing provided for the two-year stint, and you’re paid a $10,000 stipend when you leave.
8. Live In A Van
You can find advice on living in a van online, and you might even manage to make it into a long-term lifestyle. But most people who try van life do it as a transition strategy, a way to save up money for more permanent (and comfortable) housing.
There are plenty of free places to park overnight, including Walmart parking lots (my wife and I did this when we briefly lived in our van). Many public lands are open for camping for free for up to two weeks in a given location (then you have to move a mile or two), which brings us to our next option…
9. Camp For A While
Again, this is usually a temporary strategy. A large cheap wall-tent and a state campground with showers can cost half of what rent would be.
This can also be a seasonal strategy, as it was for a friend of mine who spent summers in a tent to save up for a nice rental cabin each winter.
10. Buy Or Build A Tiny Home
Tiny homes — some less than 100 square feet — are common enough now to have websites listing them for sale around the country. But it seems that many makers (and sellers) have forgotten one of the biggest advantages; the low cost.
To avoid paying $50,000 or more for 200 square feet, build your own tiny home. You can find plenty of examples of cheap tiny homes people have built, including one (follow that last link) that was made for just $500 using recycled materials.
11. Add an Efficiency Unit To Your House
I once built an efficiency apartment on the back of our home for around $2,000. It was for my wife and I to live in, so we could collect an additional $350 per month renting out our previous bedroom (the other two bedrooms were already rented out).
It paid for itself in less than 7 months, and thereafter added $4,000 to the annual income our home produced.
You probably can’t do it that cheap (this was more than a decade ago and I used some recycled materials), but if you borrowed $32,000 to build an efficiency, the mortgage payment (30 years at 5%) would be just $172 per month.
It’s likely you could rent out your home (or the new apartment) for a lot more than that, making it easier to cover your total housing costs.
12. Live In A Converted Bus Or Truck
In our travels around the United States, my wife and I have met a few people living in converted school busses, and Business Insider has a great report on a guy who lived in a converted truck on the Google campus (where he worked).
13. Rent a Room
If you’re single, renting a room rather than an apartment or house can save you a lot of money. Sure, you’ll probably have to share a kitchen and living space, but many bedroom rentals at least come with a private bathroom.
Craigslist is a great place to start your search.
14. Work As A Live-In Home Stager
If you feel comfortable moving often you can offer your service as a live-in home stager to people trying to sell vacant homes. The idea is that you pay half the normal rental rate and keep the place spotless, furnished, and available for showings at all times, and then move when it sells.
If you can’t want to find these gigs on your own, there are companies that make the arrangements for you and the sellers, as reported by NPR.
15. Live In A Shipping Container
Using shipping containers as housing is becoming almost popular. You can find amazing examples profiled online. Of course, buying ones that are already converted can be expensive, so to make this a frugal choice you will probably want to do the conversion yourself.
A basic large shipping container can be had for as little as $3,000, delivered to your lot. One online report shows how you can make it into a complete home for under $10,000.
16. Become A House Sitter
As a house sitter you should at least get free housing (although sometimes you may have to pay for utilities). Here are a couple places where homeowners advertise their needs:
You’ll pay a fee to become a member and, of course, you’ll have to time assignments to start and end in such a way that you don’t end up homeless between gigs. Or just visit family between house sitting jobs.
Sometimes you can even get paid to house sit, which brings us to your next option…
17. Be A Caretaker
For longer-term paid house sitting, look for care-taking jobs. Caretaker Gazette is one place to find them. You can also search “caretaker” on Indeed.com and other job sites.
Unlike basic house sitting, these jobs usually involve a lot more than just bringing in the mail and watering the plants. There may be cleaning, security, and maintenance duties.
18. Live In A Shed
I once built a shed for about $200 (recycled lumber) and rented it out as a bedroom for $50 per week. Then, to save (or make) more money, I moved into it so I could get $80 per week for my bedroom. Whether you pay $50 per week to live in somebody else’s shed or live in one you build, it’s a cheap option.
19. Live Under a City
It might sound like it’s from a post-apocalyptic movie, but people really do sometimes live underneath American cities. Here are some news stories and videos on the topic:
- The mole people of New York
- Living in the tunnels of the Big Apple
- 1,000 people live in the flood tunnels under Las Vegas
It’s not necessarily an ideal lifestyle, but it’s cheap. And it can be a temporary arrangement, just like our next idea…
20. Be Part-Time Homeless
A guy I played chess with (when I lived in Colorado) chose to be homeless as a way to save money to travel the world.
He had a fixed income of about $1,000 per month, and he had been paying $400 per month for a house with no running water. He decided that, given the crappy situation, he might as well live outdoors for seven or eight months to save up a couple thousand dollars.
21. Buy A Condo
The condo my wife and I live in cost us $55,000 in 2016, while houses of a similar size in the same neighborhood cost three times as much. It’s common for condos to sell for much less than houses. Check prices on Realtor.com to see if that’s the case where you live.
It’s also common for the ongoing cost to be much less, even after paying the HOA dues. Apart from the mortgage payments being lower because of the lower price, the dues usually include at least all exterior maintenance, garbage pickup, and landscaping, leaving you with few surprises.
22. Buy A Co-Op Unit
Co-op housing is similar to condominiums, but instead of owning your home directly you buy shares in the corporation and then have the right to live in a unit. The arrangement usually makes it impossible to finance the purchase, but that’s a good thing, because it drives down the prices.
For example co-ops for sale here in Tucson often sell for $30,000 or less, and generally cost about half of what a similar condo would cost. Sometimes they sell so cheap that you could give your home away after five years and still have been better off versus renting.
23. Make A Sailboat Home
Want to travel and save on housing? Buy a used sailboat and make it into your home. That’s what Leann and Chad did, as they document on HoboSailor.com.
They bought their first sailboat for $5,000, and kept total living expenses (not just housing) to about $1,000 per month.
24. Live On A Houseboat
Maybe you want something a bit more stable (and bigger) than a sailboat. In that case, consider a houseboat.
The Money Wizard detailed his hunt for a houseboat and found that, at least in Minnesota, there is no sales or property tax on houseboats. Given the $250 per month it costs for a slip where he was located, that’s pretty cheap living — if you buy used.
25. Rent A Mobile Home
In many areas of the country, mobile homes rent for substantially less than regular houses and apartments. Rental management companies may not have these listings, so check Craigslist.
If you rent a mobile on a lot (instead of in a park), you can probably get away with renting out a bedroom by the week or month, to make the net cost even cheaper for you.
26. Buy A Mobile Home On Land
My first home was a mobile on a small lot. Not only was it cheap living, but that home I bought for $19,000 I later sold for $45,000. Mobiles on land tend to appreciate in value, yet often cost less than half of what a similar-size “regular” house costs.
For more on this option, see my article, “8 Reasons Why You Should Consider Buying A Mobile Home.”
27. Buy A Mobile Home In A Park
Take a look at apartment rental data for your area. Then look at what lot rental plus a payment on a mobile home in a park will run you monthly. You might discover that you can save a few hundred dollars per month versus renting an apartment.
Mobile homes in parks (or on any rental lot) usually drop in value, but if you pay less every month (versus an apartment) it doesn’t necessarily matter.
For example, a friend bought a nice old mobile home for $8,000 cash, and he pays just $200 per month in lot rent (by agreeing to pay a year at a time). Over the years he has saved so much money (versus renting an apartment), that if he gave the mobile away he would still be better off financially.
28. Live In An RV
If you travel a lot, a recreational vehicle can be a very expensive way to go. On the other hand, if you buy cheap and stay a while in each location, it can be a cheap way to live.
Bob Wells lives in his RV, surviving in style on a monthly pension of just $1,100. Others have done it for even less.
How cheap can you get started? Check Craigslist regularly and you should be able to find a decent used RV for under $5,000.
29. Live In A Motel Room
When a friend moved back to Tucson recently, my wife and I helped him move into a hotel that costs $157 per week — all taxes and utilities included. That’s not cheap versus a small apartment here, but it was a relatively cheap transitional home until he found a more permanent solution that fit his budget.
30. Join the Military
Military housing takes many forms, but when you join any of the armed services you’ll get a place to live or, if you live off-base, a “basic allowance for housing” (BAH). And if you want to save on housing in order to change your life, well, you accomplish both.
31. Live In A Tree
Luxury treehouses are expensive, and to rent a treehouse for a night on AirBNB you’ll pay up to $300 per night. On the other hand, if you build it yourself, a treehouse can be an affordable housing option. Check out the treehouses profiled on Mother Earth News for inspiration.
32. Live In A Tipi
Yes, this is probably a temporary option, like many of the housing ideas here, but if you lived in a tipi for a couple years, think of the money you could save, especially if you have a friend who will lend you a rent-free spot on his land to set up home.
Prices for a small tipi at the Colorado Yurt Company start around $1,500 with basic options (less if you want to provide your own poles and such).
33. Couch Surf Forever
Okay, maybe not forever, but CouchSurfing.com will help you find a few couches to crash on. Of course you’re expected to share your couch too, so you might have to try this strategy with friends and family instead. Just be a good guest if you hope to make this arrangement work for more than a few weeks.
34. Pay Cash For A House
A cash purchase means no monthly payment. My wife and managed this the first time we bought a house by starting cheap — our first home cost $17,500 in 2002.See my article on how to buy a house for cash for more tips.
We’ve also paid cash for our last few homes, so we have no mortgage loan payments. That keeps it cheap. It may not be easy, but you can use the other strategies here to save money for an eventual cash purchase, and then look for an inexpensive home.
35. Live In Your Flip
The IRS says if you live in your home for at least two years you can sell it without paying tax on the capital gain (up to $250,000). That makes buying a fixer-upper and staying in it for a couple years a great strategy for saving and making money.
My wife and I have done this several times. We made a $16,000 tax-free profit on our condo in Florida, without doing much more than painting a few rooms in the two years we lived there.
36. Be A Squatter
Yes, it is generally illegal to move into a place and live there without permission. But some people still see it as a way to live cheap. Freegan.info even has a tutorial on “How to Squat a Building,” in case you’re interested.
And it might be a step up from your next housing option…
37. Become A Caveman (Or Cave Woman)
Daniel Suelo lives in caves in Utah and Arizona, eating wild foods and drinking from streams. He also goes dumpster diving for food and other supplies, and sometimes works as a house sitter. He’s done this for ten years.
Although staying in cave is free, most public lands have a two-week limit on camping in any one place, so you may have to line up a few caves.
38. Live In A Shack
Who needs a house? My friend built a shack on his property and lived in that while saving money to build a house (which he never got around to, but that’s another story).
He didn’t spend much on building materials, although he did have to pay to run power to his temporary home, and he spent a lot of time chopping wood (he heated the shack with a woodstove).
Ready to get started? Here’s a tutorial on how to build a shack or cabin for under $1,000.
39. Make A Storage Unit Your Home
Yes, people really do live in storage units to save on housing costs. For example….
Former police officer Becky Blanton moved into her storage unit after her freelance writing income dried up. The facility manager allowed it, and Blanton was able to save enough money to move into a nicer home four months later.
YouTube videos on how to make a storage unit into a home will give you more inspiration
40. Live In An Office
Terry (last name withheld) secretly lived at work for 500 days because he couldn’t afford rent in Los Angeles. A gym membership solved the showering issue, and he snuck out early each morning in order to arrive back at work at the normal time.
Even if you don’t work where you can secretly live, in some places a small office can be rented for less than an apartment.
41. Move To A Depressed City
Current listings on Realtor.com show that houses in Detroit start at less than $2,000. In Birmingham, Alabama there are homes selling for less than $10,000.
If you have a portable income source (freelance writing, website design, etc.), consider moving to some depressed city or small town where you can buy a truly cheap home.
42. Get A Habitat For Humanity House
Habitat for Humanity helps people get into affordable housing. You need steady income (but not too much), a decent credit profile, a small down payment, and you have to take classes on home ownership, as well as help build (or remodel) the home.
Your local Habitat affiliate will tell you if you qualify. If so, the mortgage is interest-free, which will save you a fortune over the years.
43. Become A Nomad
My wife and I have lived in 15 homes in 17 years. Houses, apartments, condos, mobile homes, one side of a duplex we bought, our van — we’ve done it all, and usually with an eye to saving money.
You see, even if you just rent apartments, a nomadic lifestyle allows you to go where rent is cheaper. It also allows you to go where the jobs pay more, which might make it easier to afford rent or mortgage payments.
44. Live In Hostels
I’ve paid as little as $3 per night for a bed in a hostel in Ecuador, and as much as $55 for the same in the states. But even in the states you can negotiate a much lower rate for long stays. Some people even get free lodging in exchange for caretaking and other work in hostels.
Typically you’ll share living space, including the kitchen, and possibly the bathroom, similar to when you rent a bedroom in someone’s home. Search for hostels anywhere in the world on Hostels.com and HostelWorld.com.
45. Join A Commune
Wikipedia says a commune is, “an intentional community of people living together, sharing common interests, often having common values and beliefs, as well as shared property, possessions, resources, and, in some communes, work, income or assets.”
It can be cheap. The Farm, a commune that’s been around for almost 50 years, requires a contribution of just $104 per month. You have to cover your other living expenses because residents no longer pool their money, as they did in the past.
Some communes will let you stay for a few nights or weeks for a nominal fee, so you can see if communal living is for you.
Combining Strategies
Sometimes you can keep a roof over your head inexpensively by combining strategies. For example, you might not want to live in your van long-term, but it could be a good place to spend a few days between house-sitting gigs.
Or you might combine couch-surfing with stays with parents and weeks of camping out in good weather. Or you might buy a fixer upper and rent out bedrooms while you live in it for two years in order to sell it for a tax-free profit. The possibilities are endless.
If you can add to this list of cheap housing options, please do so … and keep on frugaling
