How To Save Money On Housing And Transportation Costs

How To Save Money On Housing And Transportation Costs

We all would probably like to have a little more cash in the bank. One easy way to do that is to underspend on housing and transportation costs.

Business Insider recently spoke to Tanja Hester, the author of the book “Work Optional: Retire Early the Non-Penny-Pinching Way.” In the book, Hester makes a number of suggestions for how you can save more money without feeling like you’re saving money. One of the easiest, in her opinion, is cutting back on housing and transportation costs.

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For instance, while you might be more comfortable in a 2-bedroom apartment, choosing to live in a 1-bedroom could save you hundreds of dollars in housing costs. Hester, who retired at 38, lived in an older 1-bedroom apartment even though she could afford to move somewhere much larger and nicer.

Housing costs can also be reduced by doing things like getting a roommate or renting your house (or a room) out on Airbnb on the weekends.

A savings of just $400 a month, for instance, would net $4800 a year. Do that for a decade and you’ll have almost $50k in the bank, more if you’re socking it away in a high-interest savings account. The more you’re saving each month, the quicker things will add up. I’d also venture to say in most cities the difference between one and two bedrooms is a lot more than $400. If you buy a home, purchasing a $500,000 home even though you can afford a $800,000 mortgage can mean great things for your savings.

Housing is where we all spend the largest percentage of our money. The more was you can figure out how to cut down those costs, the more you’ll save. Even more than cutting corners in other parts of your life.

Another big one for Hester was transportation costs. Owning a car and paying for the insurance, maintenance, and costs associated with it can get experience rather quickly.

Hester recommends living somewhere where you can walk to most places, eliminating the need for a car. If you do need a car, consider buying used and keeping the vehicle for a long time rather than trading it in for a new model after a few years.

When I moved to San Francisco I actually ditched my car to save some cash. Beyond the car payment and gas, I was also going to have to pay for parking. Once I added it all up, I would have spent close to $600-$700 a month on having a vehicle. I walk a lot and take the train, but even if I chose to take Lyft’s everywhere I would be spending less than that every month.

Clearly, your (literal) mileage will vary, but look for ways you can cut down on spending when it comes to getting around. Carpooling if you need that car or taking the bus or train can add up to a significant savings account over time.


  • All good points I can relate to. If anyone thinks that this is US centric, it applies here as well. You can save lots in rent if you can handle living by yourself, and once living in a studio, living in the city means a car isn’t needed.

    Even commuting is a practical option for most, and when it changes your transport cost from $10000 a year to $3000, that’s a big saving.

    Housing is where we all spend the largest percentage of our money This is such a big thing it needs to be talked about more. You need a roof over your head. You will always need a roof over your head. So if you don’t have a plan to deal with that when you retire, you’re going to be paying rent out of whatever pension or savings you have, and I’ve never seen rent go down.

    If you have one goal while working, it should be to have zero housing costs at retirement. That isn’t necessarily easy, but it doesn’t have to be hard.

    Follow the advice in the article, and look at buying an investment property somewhere. Dump the rent from that, and all your savings from doing the above into that property, and before you realise, it’ll be yours. Or at the very least, a chunk will be yours, and the capital value will have gone up. A growth that’s suddenly yours if you sell, and potentially your deposit in one of the big markets.

    If you live in Sydney, buy in Adelaide or Brisbane and rent it out. Ditto for Melbourne. You don’t have to buy in those inflated markets, you can get ahead elsewhere. But do something, or you’re paying rent out of a pension that’s usually far less than your wage at retirement. And that’s not the goal.

    For reference, I’m retiring at 48 because of that. I will own the roof over my head, and because of my circumstances can get my super. Not everyone will have the same fortune as me, but my goal was always to own my property – which took 12 years on a single, average wage. After that, its well under $10k a year to pay all the bills, and that’s nothing.

    If I was paying rent as well, you can add another $15k to that, and that’s where you get burned. I’d rather that $300 a week went into my pocket at that point.

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