How to Eliminate housing expenses from your budget:

Keeping a roof over your head can be an expensive proposition, but it doesn’t have to be. As you seek out ways to optimize your life, reducing your housing expenses can be a major accomplishment. With a little bit of creativity and openness to new ideas, you could completely eliminate one of the five biggest expenses in your budget.

This article just might change your life. Before we dive into this life-changing concept, I highly encourage you to grab a copy of our House Hacking Quick Start Guide (free) as you read along. Not only will it deepen your learning, but it also includes a cost-saving tip most house hackers miss. You could save thousands with this strategy!

When you cut out an expense as large as housing, the journey to financial independence suddenly becomes much easier. Let’s dive into housing expenses and how you can eliminate them from your budget.

Housing costs can add up

With the average American household spending $20,091 per year on shelter, it is somewhat shocking to see how quickly housing costs can add up. Whether you currently rent or own your own home, the amount of money you spend on housing might be more than it should be. Even if you are sticking to the conventional wisdom of keeping your housing costs at less than 30% of your budget, those dollars could be better spent.

Look at your own housing budget. Think about what you could do with that extra money each month. If you are like most people, eliminating that expense could completely transform your life for the better. If you want to slash your housing costs, then you have two methods to try. Let’s dive in below.

Buy a smaller house

As of 2018, the average American home grew to 2,435 square feet. When you contrast this with an average size home of 1,500 square feet in the 1960s, it is unclear exactly why we need the extra space.

Although the traditional American Dream involves buying a McMansion that could comfortably house multiple families, the extra space is not really necessary. Not only can a bigger house lead to more expenses, but it also can lead to the habit of buying extra stuff to fill the space. Both side effects could dramatically hinder your path to FI. Not to mention an outrageous mortgage payment that you’ll need to consider each month.

If you look for a home with the amount of space you need to live comfortably, you’ll likely find that you could be comfortable in a smaller home. After all, are two guest bedrooms and a formal dining room really necessary for leading a happy life?

House HackingEliminate your Housing Expenses

Choosing to live in a smaller home is one way to save money on your housing costs. A second way is to try house hacking.

With this method, you would buy a space with rentable rooms or units. Based on your situation, you can rent out this extra space to long-term tenants or short-term vacationers. The goal is for the rental income of the units to cover the entire cost of your mortgage. House hacking will require some creativity. However, the benefits can be worthwhile. Imagine how quickly you could achieve FI without the burden of housing costs holding you back.

House hacking is an effective way to cut your expenses. Use our House Hacking Quick Start Guide to start your journey. 

How I’ve cut my housing costs

Personally, I’ve been very successful at house hacking in various situations, you can read about them here and here. I’ve written up three of my successful house hacks in great detail. At different stages of my life, I’ve been able to slash my housing costs. Make to check these out to find out more about your own house hacking options.

If you are interested in finding creative ways to house hack your way to FI, then head over to our podcast. Plus, take a look at our ultimate house hacking guide to help you find the best solution for your life.


If your housing expenses are making it difficult to save money, then it is time to get creative. As you work to cut your Big 5 expenses, working to eliminate your housing expenses could be the most important win. Not only will you shrink your expenses, but also leave more money to invest in your future. Plus, you’ll have the opportunity to dip your toes into the waters of real estate investing without a large downside.

Don’t stop with your housing expenses! Make sure to tackle your other big expenses in order to optimize your path to FI. Check out how to reduce your transportation expenses.