Cutting costs of housing
Many people do not consider the cost of their house a variable expense, or an area that they can cost costs, but the fact is, because it is such a big expense each month, it is a great place to look to save some money. If you can find ways to reduce your housing cost, you can quickly add to your cash reserve.
It is possible to reduce your housing cost, the following are some examples of ways to do so, and some tips for getting the right mindset about saving on your housing expense.
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First, you can always stay in the same house you are in and pay less by getting a better interest rate. If your credit has improved, or interest rates have dropped, and you intend to stay in the house for a time, then getting a new mortgage will be worth it, even if you have to pay some to get that new mortgage. If you could go from a 7% interest rate to a 5% rate, even if it cost you a few thousand to refinance you could recoup that money in a few years, and start saving significantly month to month. In addition, over the life of the loan you will save a great amount, which can be added to your cash reserve. Before choosing this option be sure to evaluate how long you will be in the home, what the cost of the refinance will be, and use a refinance calculator to see what your monthly savings are so that for your life and plan you do not actually cost yourself money.
The second option is also a great one, and that is to downsize your home. It costs less to heat, cool, take care of, and insure a smaller home, but in addition to that you can save on your mortgage, mortgage interest, and if you already have a larger home, chances are you will have some equity to put into your smaller home, and can avoid things like property mortgage insurance, etc. which can save you hundreds of dollars every month. If you have kids who have moved out, or do not need the space that you have, this is a viable way to free up a lot of money each month.
Third, you can relocate to a less expensive area, or find ways to cut your costs, such as let someone rent out your basement, etc.
These are just a few examples of ways you can save on your housing cost. The idea is to realize that your housing cost is not as finite as you may think, and you do have some control over how much you spend on your house each month, and how much savings you can find. You can determine what ways to reduce your housing will work best for you. Not every option is going to work for everyone, but there is something that will work, and it is possible to save 10-20% on your housing expense each month without feeling a loss or significant change in lifestyle because of it.
