Saturday, May 12, 2012

Reduce Housing Expenses to save money

Since your goal should be to save as much as possible every month so you can get financial independence, early retirement, or buy your own home, perhaps you could start with those pesky large fixed expenses.

The three largest expenses for most people are food, transportation, and housing.

Your housing expenses could be mortgage payments, property taxes, maintenance, and home owner association fees. It could also be rent payments or perhaps you live with your parents for free!

Assuming you can't or don't want to live with your parents consider one of the following:

Move to a smaller apartment. Go from three bedrooms to two bedrooms or two bedrooms to one. If you are in a one bedroom apartment consider an efficiency apartment. from there perhaps rent a bedroom with kitchen access near where you work.

Do you have a two bedroom apartment? Instead of downsizing you could rent the room to a friend or post an advertisement. Increase what you want by a little to cover utilities and don't forget to ask for half of the deposit.  If you rent to a stranger ask for references and be sure your bedroom has a lock on its door.

Many people don't move to a smaller and cheaper apartment or share because they have too much stuff. The extra room is full of boxes of stuff. You may not even remember what's in the boxes, but they're there taking up space and costing you money.

If that's your situation, then you need to urgently go one box at a time and make piles of things to sell, things to toss, and things to donate. Whatever doesn't sell gets donated.

An excellent rule is to get rid of whatever you haven't used for one year.

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