Cheapest Way To Live: 7 Key Tips For Lower Costs

Finding the cheapest way to live can completely change your financial trajectory. For many people, housing is the single largest monthly expense, so any progress you make here can free up hundreds of dollars every month to pay off debt, build savings, or invest for the future.

Living cheaply rarely happens by accident. It takes intentional choices, creativity, and a willingness to try options that might look very different from what your friends or family are doing. The good news is that it does not have to be forever. Even a few years of lower-cost living can give your finances the space they need to grow.

Why consider the cheapest way to live?

Before changing where or how you live, it helps to be clear on your “why.” When you know the purpose behind your decision, it is easier to push through the discomfort of downsizing, moving, or simplifying your lifestyle.

To achieve your financial goals faster

Housing often takes 30% or more of the typical household’s budget, and in many high-cost areas it can be far higher.¹ If you can lower that percentage, the extra cash can be redirected to goals that actually move you forward financially—rather than just keeping a roof over your head.

• Pay off debt faster: Combining a cheaper housing setup with an aggressive debt payoff plan can cut years off high-interest consumer debt.²
• Build an emergency fund: Lower fixed costs make it easier to save 3–6 months of expenses, a cushion that reduces financial stress and improves resilience.
• Invest more consistently: Extra monthly cash can be invested for retirement or other long-term goals, allowing compounding returns to work in your favor over decades.³

You might decide to live as cheaply as possible for a defined time—say 2–5 years—until you hit a milestone like becoming debt-free or saving a down payment. After that, you can reassess and decide how much you want to upgrade your lifestyle.

To reduce stress and gain breathing room

High housing costs can create constant pressure. If most of your paycheck goes to rent or a mortgage, a single setback—like a job loss or medical bill—can be overwhelming. By choosing a cheaper way to live, you give yourself more flexibility to handle surprises without panic.

• Lower fixed expenses mean you need less income to survive.
• Needing less income can give you space to change careers, go back to school, or start a business.
• Reduced financial stress is linked to better mental and physical health over time.⁴

Cheapest ways to live: 7 key tips

If you have decided that living cheaply is worth exploring, your biggest leverage point is usually housing. Below are seven options—some traditional, some creative—that can significantly cut your costs. You do not have to use all of them; even one change can help.

1. Move to a more affordable city or town

Relocating from a high-cost area to a more affordable city or region can dramatically reduce your rent or mortgage payment, as well as costs like food, utilities, and transportation. In the United States, for example, the gap between the highest-cost and lowest-cost metro areas is substantial according to cost-of-living indices from government and research organizations.⁵

• Research total cost, not just rent: Compare housing, taxes, utilities, healthcare, and commuting costs in potential locations.
• Look for healthy job markets: Cheaper housing is not helpful if you cannot find work or earn a sustainable income there.
• Test first if possible: If your situation allows, try renting short-term in the new city before committing long term.

Moving is a big change, and it can impact your social life and career. But if your top priority is lowering expenses for a few years, relocation can be one of the quickest ways to get results.

2. Downsize your house or apartment

If moving cities is not realistic, you may still be able to save by moving to a smaller or less expensive place in your current area. Downsizing can reduce not just rent or mortgage costs but also utilities, maintenance, and even furnishings.

• Shift from a large home to a smaller one: Moving from a four-bedroom house to a two-bedroom townhouse or apartment will almost always lower your housing and utility bills.
• Consider shared amenities: Townhomes and apartments sometimes include amenities—like gyms or pools—that allow you to cancel separate memberships.
• Declutter as you go: Use downsizing as a chance to sell or donate items you no longer need, which can bring in extra cash and make your new space feel more organized.

3. House hack your current home

House hacking means using your home to generate income or offset your housing costs. That might look like renting out a spare room, finishing a basement for a tenant, or taking on a roommate. The principle is that you are no longer paying for the entire space by yourself.

• Rent a bedroom to a long-term tenant.
• Offer a part of your home (like a basement or in-law suite) as a separate rental.
• Share housing with friends or extended family to split costs across more people.

Be sure to review local laws, lease agreements, and zoning rules before renting any part of your home, and document everything carefully to protect both you and your tenants.

4. Consider alternative low-cost housing options

If you are open to a less conventional setup, there are alternative housing options that can be significantly cheaper than a traditional rental or mortgage.

• Micro-apartments or studios: Very small units at lower cost, especially in urban areas.
• Living with family: Moving in with parents or relatives for a fixed, agreed-upon period to reduce costs while you work on specific financial goals.
• Co-living spaces: Shared housing arrangements where common areas are shared but bedrooms are private, often at lower cost than renting alone.

These arrangements usually require more flexibility and compromise on privacy, but they can dramatically speed up your financial progress if you use the savings intentionally.

5. Live in a smaller, more efficient space long term

Even if you are not interested in frequent moves or unconventional housing, choosing a generally smaller space and staying there can keep your costs low over time. This approach emphasizes a minimalist mindset where you own less and focus more on experiences than possessions.

• Choose a modest home that you can comfortably afford, even if lenders approve you for more.
• Organize and maximize storage so that a smaller footprint still feels functional.
• Adopt buying rules—such as one-in, one-out for clothing or household items—to avoid clutter.

6. Get work-covered housing

Some employers provide free or reduced-cost housing as part of your compensation. In many cases your cash wage may be lower to account for the housing benefit, but your total cost of living can still be significantly reduced.

Examples of roles that may include housing:

• Nanny or live-in caregiver
• On-site property manager or building superintendent
• Seasonal staff at resorts, camps, or remote locations
• Some military, education, or remote research roles

If you are considering a job with housing, evaluate the full compensation package. Include the market value of the housing, utilities, and any other perks when comparing it to traditional roles.

7. House-sit around the world

House sitting can be an especially appealing option for flexible, adventurous people. As a house sitter, you live in someone else’s home while they are away, taking care of the property and often their pets in exchange for free accommodation.

• Very low housing costs: In many cases you pay no rent, in exchange for responsibility and reliability.
• Chance to travel: House-sitting assignments can be local or international, allowing you to see new places at a fraction of the usual cost.
• Flexible lifestyle: You can choose the length and location of assignments that fit your schedule.

House sitting is not usually a complete replacement for income—it is better thought of as a way to lower living costs and travel expenses. It can be combined with remote work, freelancing, or seasonal jobs to create an affordable lifestyle for a season of your life.

How to make cheap living work for you

Knowing the mechanics of living cheaply is only half the battle. Implementing these changes in real life can be challenging—emotionally, socially, and logistically. The mindset you bring to the process matters just as much as the housing strategy you choose.

Be clear about your timeline and goals

Cheap living is easier to sustain when you have a plan. Decide how long you want to live in a lower-cost situation and what financial milestones you want to reach during that time.

• Set specific targets, such as “pay off all credit card debt” or “save $15,000 for a down payment.”
• Choose a time frame that is ambitious but realistic, such as 2–5 years.
• Review your progress every few months and adjust if needed.

Cultivate flexibility

Flexibility is one of your biggest advantages when trying to live cheaply. You may have less space than you are used to, or your living arrangements may be more communal than you imagined. By staying flexible and open-minded, you can adapt rather than resist every inconvenience.

• Question assumptions: Many “must-haves” are actually preferences. Ask whether you truly need them, or just want them.
• Focus on what you gain: Instead of only seeing the space or luxuries you are losing, remind yourself of the debt you are paying off or the savings you are building.
• Allow your lifestyle to evolve: Your ideal setup at 25 may not be your ideal at 35, and that is normal.

Communicate with the people you live with

Cheap living often means sharing space—whether with housemates, a partner, family members, or fellow travelers. Clear communication about expectations, money, chores, and boundaries is essential for maintaining a peaceful home.

• Discuss rent splits, utility payments, and shared expenses openly.
• Create a basic house agreement around cleanliness, guests, and quiet hours.
• Check in periodically to address issues before they become major conflicts.

Make adjustments as necessary

Even with careful planning, your first attempt at cheap living might not be the perfect fit. Instead of giving up, treat it as an experiment. If one option does not work, you can adjust.

• If house sitting feels too unpredictable, you might transition to house hacking a stable home.
• If a roommate situation is stressful, consider downsizing to a small studio you can afford alone.
• If a particular city is too isolating, look for a slightly more expensive but still affordable area with better community or job options.

Your financial journey is long, and different seasons may call for different housing strategies. The goal is not perfection; it is continuous improvement and alignment with your priorities.

Additional money-saving habits to support cheap living

Even the cheapest housing can be undermined by overspending in other areas. To get the full benefit of your low-cost living arrangement, pair it with smart day-to-day habits that support your goals.

• Use a realistic budget: Track your income and expenses so you know where your money goes and can adjust as needed.
• Cook at home: Preparing most of your meals at home can significantly reduce food costs compared with frequent dining out.⁶
• Limit high-cost subscriptions: Audit streaming services, apps, and memberships, and cancel anything you rarely use.
• Choose low-cost or free entertainment: Public parks, community events, and library programs can replace more expensive outings.
• Increase your income when possible: Asking for a raise, taking on extra shifts, or developing a side income can accelerate the benefits of your lower housing costs.

Frequently Asked Questions (FAQs)

Q: Is living as cheaply as possible always the best financial decision?

Living as cheaply as possible can be powerful for a specific period, but it is not always the best long-term strategy. Extremely low-cost setups may come with trade-offs in safety, health, or earning potential. Aim for a balance: reduce unnecessary costs while maintaining a stable environment where you can work, rest, and stay healthy.

Q: How long should I plan to live very cheaply?

There is no single right answer. Many people choose a timeline tied to a concrete goal, such as staying in a low-cost arrangement until high-interest debt is paid off or a target savings amount is reached. Common ranges are 1–5 years. Reevaluate annually to see whether your housing still fits your financial and personal needs.

Q: What if my friends or family don’t understand my choice to live cheaply?

It is common for others not to fully understand your financial priorities, especially if your choices look different from theirs. You are not required to justify every decision, but you can briefly explain that you are focusing on long-term goals like debt freedom, savings, or flexibility. Surround yourself with at least a few people—online or in person—who support your money goals.

Q: How can I stay motivated when cheap living feels uncomfortable?

Motivation often fades, so focus on building systems and habits. Track your progress monthly, celebrate milestones, and regularly remind yourself why you started. Visual tools like charts or goal trackers can make your progress visible. It can also help to schedule small, low-cost rewards as you hit key milestones.

Q: Is it better to move to a cheaper city or just get a roommate where I am?

Both approaches can work; the best choice depends on your career, support system, and long-term plans. Moving to a cheaper city might save more overall but involves disruption and potential job changes. Getting a roommate is simpler and lets you stay in your current area, but the savings may be smaller. Compare the total financial impact and consider how each option affects your income and quality of life.

This article is general information, not personal financial advice. Consider your own situation, or speak with a licensed adviser, before acting on it.