4 Ways to Cut Down Your Housing Costs in Your 20s


Most millennials will agree that paying off student loan debt is eating into their income big time. For you to start saving money and have a secure future, some costs should be reduced or completely cut from your budget. At least for now. A major one is housing costs.

The U.S Bureau of Labor Statistics states that there was a spike in millennials’ income in 2017 by 4.2%. Despite this increment, their cost of living remains high. The majority are spending almost half their salaries on rent and are barely making it. Saving on housing in the following ways would put more money in your pocket and you’ll be closer to your financial goals.

  1. Live with Your Parents

Being in your 20s, there’s no pressure to move out of home (if your parents don’t mind). You would only be setting yourself up to struggle. Especially if you have a looming student loan to pay off. The thought of living independent of your folks is exciting but you are probably not ready to pay exorbitant rent prices just yet.

The average cost of rent in most US cities is 1000 USD. That is a huge saving every month if you’re still living with your parents. Just imagine if you plan to move out after three years, your savings would be $ 36,000. This figure can pay off a big chunk of debt or already taken realistic loans and for some people, it could pay their entire student loan.

You may want to discuss with your parents what your contribution in the home would be. For example; would you buy the groceries, pay for utilities, mow the lawn or just give them a specific amount of money every month? Agree with them and be committed to doing your part.

  1. Move In With A Friend

Your parents are probably driving you crazy and you can’t stand living with them anymore. Or you have no other option but to move in with your friends. Although living with your friends may be more exciting than with your mom, you may not enjoy much comfort and privacy.

Fellow millennials may have a small apartment with one bedroom and bathroom. That means you might end up on their couch for a while. It’s not a bad idea if you think about the savings you’re making.  It comes down to you sacrificing short term comfort for long term freedom.

Depending on how much money you’re making, you would have to contribute an agreed amount to the living expenses. Even if they offer it to you free, be responsible enough to buy a few home essentials and some groceries once in a while.

  1. List Your Home on Air B n B

The number of homes listed on Air B n B around the world is 4 million. Home owners and renters are making a living renting out space in their homes. It could be a single room or double room, a basement, or an entire house.

Sign up online to become an Air B n B host and make some extra money. Take some high-quality photos of your rental space and add a detailed description. Prospective guests want to know everything about your space. Be honest and provide as much information as possible. With great hospitality and good ratings, repeat guests will book out your room for years to come.

This income could cover utility bills, maintenance and repairs plus any other expenses. Depending on your available space and rate, it could even cover half your rent. That’s a great opportunity to save a huge chunk of money right there.

  1. Move Out of The City or State

Living in the city is exciting. There are lots of fun places to go to after work and on the weekend. Major services like schools, supermarkets, hospitals are nearby, and most city dwellers easily walk to work. Generally, living in the city is convenient. However, the rent is expensive.

Besides the rent, other high costs in the city include; food (restaurants and cafes), clothes (high-end boutiques) and entertainment. With these activities a walking distance from you, it’s more tempting to spend more than necessary. This would make it impossible to save money.

Homes in the suburbs are much cheaper to rent. Even with the daily commute to work, your monthly costs would not come close to what you would spend in the city.

States like New York, Maryland, Hawaii and California generally have a high cost of living especially housing. You could consider moving to lower cost states. For example Indiana, Oklahoma, Kansas, Georgia and Alabama.

The average monthly rent for a two-bedroom home in Indiana is $760 while in California it is $1287. That’s a difference of $527. If you’re willing to move to a different state, even if it’s for a few years, you would make such a big saving.

The Future of Housing Costs in America

Apartment rent has been on a steady rise since 2011 and it increased by 1.3% over the last year in 2018. This was reported by Zillow Rent Index. Mortgage rates for property owners is going up so most likely the rent prices will keep increasing.

ATTOM Data Solutions, released a rental report in 2017 showing that buying a house is more affordable than renting in 66% of American housing markets.

Self-made millionaire, David Bach advises millennials to own a home and not rent. This is a tough call if your income is not substantial yet. If this is your dream, you must save a down payment of about 20%. You should have a standing order that automatically transfers money from your account to a savings account specifically for your home.

Fellow millennials will argue that renting is better because buying a house will stall your progress for up to 15 years.


Predictions and indicators show that the cost of rent will only go up. The income of most millennials is insufficient to cover all required living costs and savings as well, so you must be frugal by using the methods above. Of course, the list is not conclusive by any means. However, with persistence and patience, you’ll definitely save.

Some of these conditions may not be desirable for you. Like moving to a different state, far from your family or couch surfing with your friends. The important thing to keep in mind is that these are mostly temporary solutions. Put them to work until you’re able to rent on your own in a city of your choosing or make a down payment on the home of your dreams.