Widespread spending commitments define personal finance for most families, but some obligations stand out more than others. In particular, housing costs are among the most substantial monthly expenses faced by homeowners and renters alike. For owners, the cost of a home is only the beginning, setting the stage for further spending on updates, repairs, taxes, and other residential expenses. And leasing a domicile also carries costs beyond monthly rent charges, including money spent on insurance and utilities. With so many individual expenses pulling at your monthly budget, the following savings strategies provide welcomed relief, leading to lower overall housing costs.
How to Trim Spending With Lower Housing Costs
There are many costs associated with home ownership, but your first major concern as a would-be buyer relates to asking price. Paying a fair price for property establishes an affordable cost foundation, on which to build equity in your home. For the best results in potentially volatile housing markets, study trends in desirable neighborhoods. How long do homes stay on the market before selling? What is the average sale price for the style of home you’re looking for? Are prices moving up or down? Answering these and other questions about prospective purchases gives you the tools needed to make informed buying decisions.
Create Affordable Conditions
Sometimes creative solutions are required, in order to make your financial dreams come true. If you are committed to home ownership, but can’t afford a conventional arrangement, there are several cost-saving measures to consider, for example:
- Multi-unit property – In some cases, becoming a landlord leads to lower housing costs. Owning a duplex, triplex or another type of multi-unit residential rental property enables you to lease part of the building to offset your own expenses. Although it can save you money, serving as a landlord and caretaker are not passive roles. On the contrary, be prepared to earn the money you save on house payments, administering to the needs of the property.
- Shared expenses – Sharing living space with a roommate(s) can dramatically reduce living expenses when compared to living alone. Not only is it possible to share the cost of rent or mortgage payments, but utilities, insurance, and even food costs can be equitably divided among residents, reducing everyone’s financial burden. If you don’t have a particular individual in mind, turn to online resources that match roommates with affordable spaces.
Find Favorable Financing
There are many ways to establish down payments and finance property purchases. And since market conditions continually evolve, you may be able to secure better terms today, than you did when you bought your home. Online resources, like this comprehensive listing of loan alternatives, highlight various funding options, including rates and terms offered by competitive lenders. To land the best terms, use these types of resources to compare your financing options.
By the time you apply for a loan, your credit history is already established, providing references lenders use to evaluate creditworthiness. More than any other financial commitment, building and protecting your credit rating will keep you eligible for affordable financing.
Downsize for savings
There comes a point in family life when the nest empties and residential needs change. If you find yourself living in more home than you need, there is no sense continuing to pay the cost of occupying and maintaining it. Downsizing may have other financial benefits, such as tax breaks, but you can definitely lower housing costs immediately by reducing your payment and associated residential expenses.
Depending on your home’s size and layout, renting a room may present a viable alternative to selling; enabling you to generate supplemental income you can use to pay housing costs. And in some cases, turning your home into a rental property may also be feasible, allowing you to downsize to a smaller home while building rental income from your original residence.
Affordable housing is central to effective personal financial management. As you establish residence or make changes to your living conditions, use these moves to increase your chance of success.