The US cost of living has risen steadily as the price of food, real estate, healthcare, and even homeowners' insurance increases. Recent industry statistics estimate that an average US household now spends 34.9% of their income on housing and house-related costs. With costs rising across all areas of life's expenses, small savings across the board can help you stay afloat. The real estate experts at Prism Real Estate Group offer the following tips on how to lower your cost of living without having to move out of your state.
1. Rent out extra space in your home
One of the easiest hacks to save a huge amount of money on fixed living expenses is to rent out the extra space in your home. Renting out a portion of your living space can provide a steady income stream without much effort. The income you generate can help you cover mortgage payments, utilities, property taxes, or other expenses, reducing your financial burden. On top of that, sharing the costs of your home with a tenant can help alleviate the financial strain of maintaining the property, including maintenance, repairs, and even renovation costs.
2. Check your home loan rate
Your home loan could be a great place to start when looking to cut living costs. With rising mortgage rates, reviewing your home loan can help you save money and align your debts with your future goals. Consider the loan term, interest rate, home equity, and offset facilities and align them to your current financial goals.
3. Negotiate your insurance premiums
Insurance premiums can eat up your budget and leave you in debt. Contact your homeowners, rental, or automobile insurance broker and negotiate a better price. This may involve increasing your deductibles or maximizing any discounts available to you. Consider asking your broker whether there are other providers they represent that may offer less expensive options.
4. Tap into debt relief programs
One of the biggest drains on many people's income and overall well-being is debt. With rising inflation rates, the interest on credit card payments and other debts is set to rise further, adding to the stress of already high living costs. You can stabilize your finances and tackle the rising interest rates by taking advantage of your debt relief options. These programs aim to provide relief by reducing the total debt owed, extending repayment terms, or negotiating more favorable terms with creditors. Here are a few debt relief options to consider:
- Mortgage foreclosure prevention programs: These programs are designed to prevent foreclosure on homes and may include modifying mortgage terms in order to make payments more affordable for homeowners who are experiencing financial difficulties.
- Debt consolidation: Debt consolidation programs combine multiple debts into a single, more manageable payment. This can simplify the repayment process and often comes with a lower interest rate, resulting in potential cost savings.
- Debt settlement: In a debt settlement program, a person or organization negotiates with creditors to settle the debt for a reduced lump-sum payment. Creditors may agree to this arrangement to recover at least a portion of the debt, especially if the debtor faces financial hardship.
- Debt management plans: Debt management plans are coordinated through credit counseling agencies. They involve creating a structured repayment plan in which the agency negotiates with creditors for lower interest rates and more favorable terms. Debtors make a single monthly payment to the agency that distributes the funds to creditors.
5. Weatherproof your home
Energy costs are among the most expensive, and it is difficult to predict expenses. If you are trying to reduce your cost of heating and cooling, consider weatherproofing your home. Sealing gaps and insulating properly can lower heating and cooling bills, enhancing your home's energy efficiency and making it more environmentally friendly. The initial investment in weatherproofing materials and services can pay off through reduced utility bills and potential tax incentives or rebates for energy-efficient upgrades.
6. Move to a less expensive neighborhood
One of the biggest changes you could make to keep your cost of living down is to move to a new location where those costs are lower. For example, opting for homes for sale in Roslindale can help you access more affordable housing with all the infrastructure and resources available in other premium Boston neighborhoods. Roslindale has beautiful budget-friendly homes, including impressive condos and single-family houses. On average, homes in Roslindale command lower per square foot than Allston, Brighton, South Boston, and even East Boston markets.
7. Cut your take-out meals
Take-out meals and eating-out expenses add up quickly, stretching our monthly budgets. Consider cutting those costs by planning meals and shopping for groceries on a budget. If you don't have time to cook the entire meal, order only half of a meal and prepare the rest yourself. Besides its cost-saving benefits, cooking at home allows you to control your ingredients, giving you the power to make healthier choices. You can choose fresh, whole ingredients, control portion sizes, and limit harmful additives like excessive salt, sugar, and unhealthy fats. This can help you manage your calorie intake, improve your overall nutrition, and reduce medical costs.
Is declaring bankruptcy an option?
While it is generally considered a last resort, bankruptcy is a legal process that can provide significant debt relief. Chapter 7 bankruptcy can help discharge unsecured debts, while Chapter 13 bankruptcy requires a repayment plan over several years.
In this sense, bankruptcy can provide a fresh start by eliminating or reducing most unsecured debts, including credit card debt and personal loans. This can provide immediate relief from overwhelming financial obligations.
Depending on the type of bankruptcy, you can retain certain assets, such as your primary residence and essential personal belongings, while still seeking debt relief. However, bankruptcy also has a share of disadvantages that you need to review before seeking it. These include:
- Negative impact on credit score: Filing for bankruptcy can significantly damage your credit score. A lower credit score can make it difficult to obtain credit in the future and may result in higher interest rates on loans and credit cards.
- Limited access to loans and credit: Even if you can obtain credit after bankruptcy, you may be subject to lower credit limits and less favorable terms.
- Impact on housing and employment: Some employers and landlords might view bankruptcy negatively, impacting your ability to secure a job or rent a home.
Prism Real Estate is your premier Roslindale Real Estate Agent
The cost of food, energy, housing, transport, and other essential commodities has skyrocketed, sending millions of Americans to the verge of financial ruin. However, adjusting your lifestyle accordingly and reducing the overall everyday living expenses can effectively stabilize your finances and future-proof your life.
Prism Real Estate is the leading Roslindale Real Estate Agent, helping home buyers and renters find ideal properties that suit their preferences and budgets. With decades of experience in the Roslindale real estate market, our team of experts can help you save money with the right property, whether buying or renting a home in Roslindale. Contact us today to schedule a free consultation.
*Header photo courtesy of Prism Real Estate Group