Can’t Afford to Move? Here’s How to Cope
If you’re like most people, one of your biggest monthly expenses is housing. The average American household spends over $18,000 a year on housing costs, which includes things like a mortgage or rent, property taxes, and maintenance.
The rule of thumb most financial experts recommend is to spend no more than 30% of your income on housing. While it sounds doable in theory, if you live in an expensive city like San Francisco or New York, this percentage is laughably unattainable.
You might think the best solution is moving to a cheaper spot to reduce expenses. But before taking the leap, consider the upfront costs that can put more of a strain on your finances than staying put. Between renting a moving truck, application fees for a new apartment, and putting down a deposit, you could end up spending thousands all at once.
Downsizing to a cheaper place might not be the best idea if it means sacrificing your quality of life to save a few hundred dollars a month. Instead, here are four tips for managing your money when moving isn’t an option.
Reduce Monthly Expenses
While you might not be able to lower the cost of your rent, you can balance it out by reducing other costs. Make a list of all your monthly expenses and review each one carefully to see if there’s anywhere you can cut back. You’ll be surprised what you find if you dig through your expenses! From groceries to personal care and activities, find the loose ends in your spending.
Look over your insurance policies to see if there are features included that you don’t actually need. Call your cell phone or internet provider and ask if you’re eligible for any additional discounts — or Charlie can even do this for you. It’s easy to just set your monthly bills and forget about them but checking periodically can help you free up extra money.
Negotiate With Your Landlord
If you’ve been at your apartment for a while, you might have room to negotiate the current terms to make rent more manageable. Most landlords want to keep tenants who are responsible and pay rent on time, so if this sounds like you, use it to your advantage. Landlords are people too, and if you’ve maintained a good relationship with yours, you never know what they might be willing to compromise on.
The approach is up to you. If there’s an upcoming rent increase, ask your landlord to waive or reduce this cost if you sign on for another one-year lease. Or ask if they’re willing to lower the rent if you pay a month or two in advance.
Create a Game Plan
If you like everything about the apartment besides the cost, figure out ways to supplement your income. Maybe you can negotiate a raise at your job, pick up freelance gigs on the side, or sell items you no longer need. Any or all of these can bring in an extra few hundred dollars a month to relieve some of the financial burden of housing.
If you truly feel rent costs are holding you back from other financial goals (paying down debt, saving for retirement, etc.) you’ll have to make a tough call on where you want to compromise. This could mean finding a roommate to split expenses with or using low-cost modes of transportation to get around (i.e., biking, walking, public transit).
Whatever you choose, don’t pressure yourself into making a quick decision. Finding a place that’s comfortable, safe, and affordable takes time. Renew your lease another six months or a year to figure everything out. Just remember you won’t be paying an insane amount of rent forever and focus on a long-term plan you’ll be happy with.
Make the Most of It
The more you focus on the financial aspect of your living situation, the less you might actually enjoy being at home..
Think of what you actually like about your apartment and capitalize on it. Does it come with a nice open living room? Set up get-togethers with your friends once a month for a movie or game night to better utilize the space. Do you have your own washer and dryer? Enjoy being able to throw your laundry in and go about your day.
Paying rent may be one of the least fun parts of being an adult, but having a roof over your head is important. Work on pulling together some extra cash and actually enjoying the perks that come with having your own place. If you can accomplish these tasks, it might not feel as painful when rent comes out of your account next month.