How to cut your living expenses in half

Recently I have had conversations with a number of different single people. Their job situation like many wasn't optimal. They were wondering what they could do to reduce expenses. Their disadvantage is that they are such good Frugal Prosumers that even if they cut expenses it wouldn't make much difference as their spending is so minimal anyway.

Now it isn't very popular and is not normal like it use to be. But I said they could cut their living expenses in half immediately if they took on a room mate. Now room mates can be a lot of stress and it is a learned skill that many in this day and age of affluence have not had to learn.


The reason Mary and I are as well off as we are with a very low dollar income, is because we have lived cooperatively with others most of our lives. No it hasn't always been easy and at time down right stressful but at other times the relationships have brought us great joy and reduced financial stress.

• Mortgage could be cut in half or to nothing.

www.smallhousesnow.com

For most people their largest single expense is their mortgage. Often accounting for 30%  50% of their income after income taxes. Downsizing ones house can have a dramatic and significant reduction in your monthly mortgage expenditures. This reduction can significant increase ones available cash and create massive savings in interest over the term of your mortgage. Done right one might be able to trade in their house and purchase their next home debt free.

• Real estate taxes could be cut in half. These are generally the next largest homeowners expense. Unlike mortgage payments, they never go away. Downsizing your home is an easy way to minimize real estate taxes. Simply moving from a 3,000-square-foot home to a 1,500-square-foot home can cut your taxes by half. 

• Living in a new location could cut other expense in half.  Downsizing your house also gives you the opportunity to find a new neighborhood with lower real estate, income taxes, transportation, insurance, cost of living, etc. Where you live can have a big impact on the cost of groceries, gasoline, insurance, commuting, and more. 

• If you move to a smaller place you could cut your utilities in half.

• You could cut maintenance in half. A smaller place means you can cancel the landscaping service, pool boy, paint fewer rooms, resurface a smaller driveway. When things wear out and need to be replaced, you'll be replacing a smaller roof, buying one or a smaller furnace instead of two, installing 1,200 square feet of carpet instead of 3,200 square feet, and have substantially less work to do around the house.

• You could double your savings or fun account.  Just saving $500 per month, turns in to $6,000 per year and thats $90,000 over the course of the next 15 years. Add interest or invest income that could be a 1/5 of a million dollars in 15 years. Or you could just double your fun by doubling your fun spending.

• Looking Beyond the Money.  In addition to substantial cost savings, moving to a smaller place has other benefits. For example, you're likely to have substantially less work to do around the house. With your newfound time, you can start a hobby, visit friends, travel or simply relax instead of spending hours cleaning, improving, or fixing your too-big house. You can even move to condominium and delegate most of the chores to the maintenance man.

The other way you can cut your living expenses in half is by down sizing to a smaller house. Business know they can increase profits by reducing business lines, workers and lowering expenses. The same thing happens, on a smaller and more personal scale, when you downsize your house. Now before you say you can't do that! Look at some of the following facts as rising home, energy, and gasoline prices all add to the cost of living. More then ever the financial benefits of moving to a smaller place are numerous, and well worth exploring.

Many people think they have less money and are poorer then they use to be when instead they are just purchasing bigger, more, and fancier things. The average home size in the United States was 1,400 square feet in 1970 and nearly twice that by 2004. The average car is now a "cadillac"(power this and power that) compared to an average car in 1969. Are you poorer? Or just spending more?

All change should be though through. For some it may be cheaper and more advantages to stay living in an un-dowsized house. Think about how many of the rooms in your house are actually used? How much time do you spend in that basement that you have to pay to heat and cool? Are pets really important to you and can you have pets were you go to? Relations are the most important thing in life will downsizing improve or detract from this?