Believe it or not, there’s a lot to love about low-rent living.
If you work hard and earn enough money, you may rent an apartment with every amenity under the sun— tile, granite, community swimming pool and Jacuzzi, and other luxury living perks. But all of this comes with a price. Just because you can afford high-end rent doesn’t mean you should.
Whether you rent or buy, your house payment shouldn’t exceed 28% of your gross monthly income. There are, however, benefits of moving into a place that requires a smaller percentage of your income. Living beneath your means is easier said than done. But if you are up for the challenge, here are a few reasons to go with the cheapest rent without sacrificing your safety.
Low-Rent Living Gives You Freedom to Leave a Job You Hate
If you live a high-end lifestyle, you have to keep a high-paying job to maintain this lifestyle. This isn’t a big deal if you love what you do and you don’t mind going to work every day. But if you’re stuck in a job you absolutely hate, leaving this job will be harder the more bills you have. Low-cost rent gives you the freedom to leave a job you don’t want and find a job that brings personal satisfaction, although it may pay less.
Freedom to Work Fewer Hours
Then again, maybe it’s not your job you hate, but the fact that you’re putting in more than an eight-hour day. The more financial responsibilities you have, the more you have to work. You might pull 10+ hour days just to make rent and cover your expenses. On one hand, you may feel working five days a week is worth the stress and headaches because you get to leave and go to a place you’re proud to call home. But on the other hand, this type of work schedule gets old and you could hit burnout. Cutting back isn’t an option when overtime hours pay for your luxury lifestyle.
Moving into an apartment with fewer amenities may feel like a step backwards, but cheaper rent in a decent and safe neighborhood may allow you to work fewer hours. The less you work, the more time you have to exercise, explore a hobby or spend time with family and friends.
Peace of Mind
Some people make the mistake of living at their absolute max. In this case, most of their income goes to their apartment. One of the benefits of low-rent living is that you’re able to stop living at the top of your budget; and when you don’t live at your max, you enjoy a measure of peace—whether you realize it or not.
If all your money goes to rent and there’s little money left, this significantly impacts your ability to save an emergency fund. Many financial experts recommend at least a six-month emergency fund cushion for the unexpected. This can include a job loss, a car repair, or an unexpected bill. If you moved into a cheaper apartment, this could add more disposable income to your budget. With disposable income, an emergency won’t rock your personal finances and leave you scratching your head. Even if you’re only able to save $200 a month, that’s $2,400 a year that can go into your savings account for an emergency.
Low-Rent Living Leaves More Money for Fun Stuff
Your monthly rent payment should not interfere with your ability to enjoy life. There is nothing irresponsible about having a reasonable amount for recreation or entertainment. In fact, being able to let your hair down and have a little play money is how you maintain your sanity after long, hard work weeks. But unfortunately, living at your max can mean less money (if any) to blow off steam.
If you’re a homebody who doesn’t like going out, this may not affect you. But if you like to go out with family and friends and enjoy local activities, you may fall into a pattern of using a credit card if you don’t have cash for recreation or entertainment.
Using a credit card is one of the fastest ways to get into debt, especially if you don’t have disposable cash to pay off your cards in full every month. You can slowly accumulate a balance, and then carry this balance from month to month. It could take years to pay off your card, and over this time you might pay hundreds in interest charges. Plus, too much credit card debt can lower your credit score, which can make it tougher to get approved for financing, or you might get hit with higher interest rates. Learn how to increase your credit score.
You Might Be Able to Live Alone
If you can’t afford luxury living on your own, you might split the cost with a roommate. Some roommates are best friends and they wouldn’t change their living arrangement for the world. But not every roommate story has a happy ending.
You could end up with a jerk, or with someone you’re just not compatible with. Although you might hate the idea of leaving the comforts of your apartment, you might also realize you can’t afford the high rent on your own. Moving into a place with cheaper rent might present the opportunity to live on your own. You can give up the expensive apartment and ditch the annoying roommate.
These are just some of the benefits of choosing low-rent living. If you’re sacrificing too much to maintain this lifestyle, it’s time to rethink your priorities and be honest about what you can actually afford. Understand, however, that downsizing your apartment doesn’t necessarily mean living in a bad part of town. In all likelihood, there are apartments (or even houses) for rent that are somewhat cheaper than what you’re currently paying, yet you don’t have to lower your standard of living by much. It all depends on where you live.