Three Extreme Ways To Save Money This Year
Fee-for-service financial planner and founder of PlanEasy.ca
In this post we’re talking about extreme ways to save money. We are NOT talking about reusing your paper towels, or squeezing ketchup packs back into the bottle. That’s might save money, but that’s not extreme enough.
What we’re talking about here is extreme frugality. The level of frugality that allows you to live off half your income of less. Frugal living like this doesn’t come easy.
If you want to save big you have to go extreme.
These extreme ways to save money will require a little more commitment and determination than squeezing ketchup packs back into the bottle.
These aren’t easy ways to save money. Oh no. These three ways to save money require some serious lifestyle changes but if you can do them you’ll be on your way to living on just a fraction of a regular household’s budget.
Definitely extreme, housing hacking can help you eliminate your housing costs completely but you have to be willing to do things a little bit differently.
If you’re truly interested in getting your housing costs close to zero (or even make some money!) there are different ways to go about doing this.
Less Extreme: Living small
Live in a studio apartment or a small house. This is boring but it’s one way to save money on housing costs.
Slightly Extreme: Rent an entire home and sublet the rooms
Now you’re sharing your space with other people, so this is a bit more extreme than just living small.
The positive thing with renting a house is you’re not tied down by a mortgage. The negative thing with subletting rooms is that now you run the risk of having vacancies.
The benefit is that your roommates could cover the entire cost of the rental, making your portion ZERO! You might be going against your agreement with the landlord though, so read the fine print.
Extreme: Buy a home and rent out rooms
Similar to the one above you’re now living with other people and subletting rooms. It’s a bit more extreme because unlike simply sharing an apartment you take on more management duties.
This house hacking method can be even more lucrative though. Instead of your rent cheques going to the landlord they now go towards increasing your home equity. If you can rent enough rooms to cover the mortgage you’re now living for free AND increasing your net worth! Nice!
Super Extreme: Live in a van
Van dwelling seems to be trendy but I would consider it super extreme. I must admit, there are some awesome van conversions out there but unless you’re living a completely counter-culture lifestyle van dwelling is super extreme.
Even though van dwelling is super extreme I’ve considered it. At my previous employer there was a gym with showers, it would have been entirely feasible for me to live in a van. I even considered living in a houseboat at one point but my wife quickly said ‘no’ to that one, probably for the best.
Outright Crazy: Build your own hobbit hole
This one is downright silly but it’s been done. Build your own hobbit hole in the country side and do away with all those modern conveniences. Just live life simply with nature (and the cold, wet dirt).
Source materials for free from Craigslist, find a sympathetic farmer with lots of land to place your hobbit hole, and your home will be entirely free! (But still wet and cold).
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Ditch The Car:
Owning a car can easily cost over $5,000 per year. Ditching the car may sound extreme but it’s a super effective way to save money.
Before ditching the car it’s important to find alternatives. In more extreme cases it might even mean moving to a better location that is more conducive to other forms of transportation.
Instead of owning a car you could…
- Walk – Walking is great but your distance will be limited to 2-5km. Unless you already live in a walkable area this will be difficult (or you might need to move to a better area)
- Bike – Biking will greatly increase your range. Biking 10-20km one way is easily doable.
- Take public transit – Pairing walking/biking with public transit increases your range even further.
- Car pool – Catch a ride with a co-worker or someone who works in the same location (and not necessarily at the same business).
- Work from home – Avoid commuting all together and look for a “work from home” arrangement.
- Find a better area to live – Sometimes an area is just too car-friendly and the only choice is to move to a better area that is more conducive to alternative forms of transit.
Stop Buying “Stuff”:
Just stop buying stuff. Period. In our culture, this is an extreme way to save.
You don’t have to go cold turkey. You could start out slowly by doing a no spend month, then escalate to a no spend year and then just stop buying stuff altogether.
Think of it as minimalism meets asceticism. Doing away with all material possessions and materialistic experiences all together. The goal is to experience life without the distraction of “stuff”.
There is a whole movement around simple living. On the extreme end, you have people who live in self-imposed poverty, sometimes living off as little as $5,000 per year.
These people are living with basic shelter, food, clothing and very little else.
Strangely I see the attraction. I like the idea of simple living. There is a certain freedom that comes from owning less stuff.
The whole idea of living on less reminds me of this quote…
“The greatest wealth is a poverty of desires”
What extreme things have you done to save money?
“To save a lot of money you have to be willing to do things a bit differently”
Financial planner, personal finance geek and founder of PlanEasy.