Have you ever heard the real estate mantra “Location, Location, Location?” If you live in a metro area, you know all too well that great location means a great big rent check each month. According to statistics on www.numbeo.com, the average net monthly salary in Manhattan is approximately $4,000 while the average rent for a one bedroom apartment is $2,800. This means that New Yorkers potentially spend up to 70% of their income on housing! And, if you take part in the night life, that’s another 20% of your income- have you ever bought drinks in Manhattan? $10 is a steal!
An article on consumeraffairs.com, recommends not spending more than 30% of your income on housing. Aside from the costs of putting a roof over your head, think of all the other expenses you incur on a monthly basis. Food, utilities, social expenses- and what about student debt, credit card debt, and health expenses?
High costs of living have spurred the Tiny Living or Tiny House Movement. The idea of the movement is to simplify life by decreasing costs of living and space- which consequently leads to decreasing possessions. Residents of tiny houses live in 500 square feet or less. Although the square footage may seem unlivable, the tiny houses are built to maximize space and have an open feel despite the small size. The tiny houses cost considerably less to run than a normal home or apartment and the cost of building is low- usually overall under $30,000. There are even companies, such as Tumbleweed, that will design and build your tiny house for you.
The movement has become popular in Portland and Seattle, where communities of tiny houses are being constructed. You can rent a tiny house for just $90-$400 a month. Embracing tiny living leaves more money for enjoying life- it’s a new kind of financial freedom.
This lifestyle isn’t for everyone, however, and not all cities are receptive to the movement. So what can you do in the mean time? I won’t bore you with the basics- you have probably heard it all, get a roommate, make your own coffee at home, and live in an area outside the main city. Maybe you already employ some of these, or maybe you just simply are not willing to sacrifice your space and possessions to downsize. Never fear, there’s still ways to gain financial freedom!
With the rising costs of living, saving and investing for the future have never been more crucial. Traditionally, even finding the money to invest has been a struggle as 76% of Americans live from paycheck to paycheck. Many investing and trading platforms have minimums of up to $10,000 and require you to pay up to $10 per trade or some kind of fixed percentage of your total account value.
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By Nicole Dugan
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