Don’t Pay Rent | brokeGIRLrich
My #1 frugal living tip is: Don’t Pay Rent
Speaking from 10 years of experience here, the quickest way you can amp up paying off debt, saving up for a goal or even learning how to budget without a lot of pressure is to get rid of your rent.
And I don’t mean taking on a mortgage either, I mean, figure out how to live at $0 cost.
I was thinking about how I pretty much sailed through this summer of minimal employment and still managed to see lots of friends and have a lot of fun. On $175 a week paycheck, working on a show that would occasionally just cancel for the weekend, so I wound up making nothing.
Don’t get me wrong, I hustled a little. I brought in some income with this blog and eBay.
I also tapped quite a bit of savings I had stockpiled from my last two or three paychecks from my full time job that I left in my checking account to use as necessary.
But how did I manage to stockpile three paychecks?
And how did I get by on such a ridiculously low amount of money?
Because I don’t pay for rent.
Now, living with your parents might not be doable for you. Maybe your job is worth living far from them or maybe you have a bad relationship with them, but if it is an option, even if they charged you a small token amount of rent, it’s still probably the best deal you’re going to find.
Even just spending a year or two at home right out of college and socking away every penny is going to start you a nice nest egg for retirement, thanks to compound interest.
Don’t squander it! It’s so easy to just blow through money when you don’t have to pay it for bills, but you need to discipline yourself to think you still are and save those dolla dolla bills ya’ll. Every paycheck, the amount you would’ve paid for rent and utilities should go right into a savings account. Or right into paying off your debt.
If you want to amp this up even further, there are plenty of jobs that might not appear to pay that well, but if they cover your living expenses, you can save almost every penny. You’re likely to be doing better financially than someone with a huge salary – and huge financial commitments to match it.
Jobs like being a live in nanny, joining the military, working for a cruise line, working out on tour, even joining the Peace Corps. (although that stipend is pretty small for a few years of work) let you build up quite a nest egg.
Some of my former ship friends left ships to do crazy things like buy a house outright, start a business without any loans, put their kids through college without batting an eye – because rather than partying away each paycheck, they saved and invested them!
In the last 10 years, I spent 6 of them without paying rent and the funny thing is that most of the time, when I was paying rent, I had a higher paying job and still barely managed to hit my savings goals. Anytime I haven’t had to pay rent, my salary took (on average) a $20,000 hit and I still came out ahead of the game.
Have you ever achieved any goals by ditching your rent or mortgage payments and finding a free place to live?
You’re killing it with the rent free jobs! I am impressed. You’re right, too, it is by far the biggest cost for most people and you can take quite a big pay hit when you cut it out. I have a friend who lived at home for two years after he was done his trade training, worked an obscene amount of overtime and paid cash for a house. A house that he turned around and had friends come live with him and pay rent for! A friend in the (Canadian so generally better paid) military puts a downpayment on a new property every time she comes back from tour, because she was able to save so much, with her mid tour trip and souvenirs being basically her only costs while deployed.
A coworker in his younger days worked in a fly in fly out mining camp and lived in his car for about a year. Same thing, major money in the bank and was able to go visit friends and family all over.
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Your friend who paid cash for a house and then had his friends come live in it with him is my new hero.
I lived with my parents until I got married. I got some grief for it, but I wasn’t in any rush to move around. I also work in a pretty volatile job market, so it would have been really silly to put down roots (apartment or house) near one district only to get cut for budgetary reasons. I did try to buy groceries and do as many other things as I could around the house, so I didn’t totally feel like a freeloader. But honestly, I think my parents were happy to have me! And I’m forever grateful because it afforded me the opportunity to pay for my Master’s degree and wedding without loans, as well as save for the downpayment on our house.
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I try to help out around the house too and I often buy at least my own groceries, but I think they’re happy to have me around too.
For the first two years after graduating I lived at home with my parents. They charged me a fee for rent, but it was better than spending $1000 a month on rent alone living by myself. I did set aside the difference between what my parents charged me and the $1000 and then saved more for my retirement funds. Really allowed me to push my savings rate up along with my investment accounts. Now I am renting a townhouse but for those two years it was great. I do believe it is important to not stay to long with your parents. It is easy to get caught up in saving and free rent, but you need to experience life and get out into the world. Meet people, friends, colleagues, have your own events or friends over without your parents around.
The DeLeon recently posted…Cost of College
I think you can definitely still have a life of your own living with your parents. I don’t see any problem living with them for as long as all of you are comfortable with it.
I still live with my parents. It saves so much on rent. You’re right, you shouldn’t spend your money so quickly on other things even though you don’t have any bills to pay. That’s one part of the advice I’m trying to follow. Also I do chores around the house, I help pay the cable and internet bill every month. This is a good article.
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