Cheapest Ways to Live (That Are Actually Realistic)

When I first wrote this blog post on cheap housing alternatives, I never imagined how much it would resonate with people. It’s been a long-time favorite on my blog, and for good reason. We all want to save more money, and housing is often the single biggest monthly expense in the budget.

But while ideas like tiny homes, van life, or living in an RV make for fun YouTube rabbit holes, let’s be real. Some of us need way more space than that. (I know I do!)

That’s why I wanted to revisit this topic and take it in a more practical direction. I’ve been brainstorming some realistic, creative, and sustainable ways to lower your housing costs. Whether you’re open to a big move, considering multi-generational living, or just looking for clever ways to reduce your monthly rent or mortgage, I hope you enjoy this post!

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Why Housing Costs Matter So Much

Housing is usually the largest fixed expense in a household budget taking up anywhere from 30% to 50% (or more) of your monthly income. That’s a huge chunk, and if you’re living paycheck to paycheck, it can feel like there’s no breathing room left for savings, debt payoff, or even the occasional self-care splurge.

Cutting your rent or mortgage by just a few hundred dollars per month can completely change your financial life. But how do you do that without downsizing into a shed or moving in with four roommates you found on Craigslist?

That’s what we’re diving into: the cheapest ways to live that can actually work for real people, in real situations.

1. House Hacking: Live for Less (or Free)

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House hacking is one of my favorite cost-cutting housing strategies. The idea is simple: you buy a multi-unit property (like a duplex, triplex, or fourplex), live in one unit, and rent out the others. Ideally, the rent from your tenants covers your mortgage.

A Reddit user shared how they and their partner purchased a fourplex with an FHA loan, lived in one unit, and had three rental incomes coming in. They covered their mortgage and had a little leftover each month.

This strategy works especially well for first-time buyers willing to live in a modest space for a few years. You’ll build equity, lower your living costs, and set yourself up for long-term financial freedom.

Tip: FHA loans allow you to buy multifamily properties with as little as 3.5% down—as long as you live in one of the units.

2. Moving to More Affordable Areas

This option isn’t for everyone, but it can unlock serious savings. If your job is remote or you have flexibility, consider relocating to a lower cost-of-living area.

One couple I read about online moved from California to Iowa. They went from paying $2,500/month in rent for a small apartment to owning a 3-bedroom home with a yard and a $900/month mortgage. The lower housing costs allowed them to start saving, travel more, and even explore early retirement.

Even just moving an hour away from a major city can make a huge difference in price. I’m originally from Northern Illinois, and while we lived within an hours’ drive of Chicago, I specifically chose to settle down in the Chicagoland suburbs vs. living in the actual city to avoid paying more for housing and other expenses. And with more remote work opportunities available than ever before, this strategy is becoming much more viable.

3. Multi-Generational Living

Living with family can be a game-changer when done with clear expectations and boundaries. For some, this might look like moving in with parents or grandparents temporarily to save money. For others, it’s a long-term solution that involves buying a home together and splitting costs.

One Redditor user shared how they pooled money with their spouse, mother, and grandmother to buy a home with two separate living spaces. They split the mortgage and utilities, while still having privacy. The arrangement saved everyone money and provided built-in childcare and support.

Multi-gen living can also be a great way to care for aging parents or share responsibilities among siblings.

4. Cohousing or Co-Ownership

Cohousing communities are designed around shared spaces, where residents have private homes but share amenities like kitchens, gardens, or laundry facilities. It’s a modern twist on communal living, and it can dramatically reduce costs.

Another option is co-ownership: buying a home with a friend, sibling, or trusted person where both parties contribute to the down payment and mortgage but live in separate areas of the home. I have two relatives who actually did this a year ago and it’s been working out for them.

While not for everyone, these models offer the benefits of ownership without the full financial burden falling on one household. And they’re becoming increasingly popular among Millennials and Gen Zers who feel priced out of solo homeownership.

5. Adaptive Reuse: Converting Non-Traditional Spaces

People are getting creative with what “home” looks like. From converted school buses to shipping container houses and detached backyard units (ADUs), some folks are reimagining what affordable housing can be.

I recently read about Robyn Swan, who lives on her own land in a converted shipping container. She harvests rainwater, grows her own food, and uses solar power. Her total living costs? Just $330 per month. That’s less than some people’s car payments.

Now, I know this isn’t for everyone (again, I need space and prefer more traditional comforts), but it’s a good reminder that we don’t always have to color inside the lines when it comes to housing.

6. Live-In Work Exchange or House-Sitting

Sometimes the cheapest housing is… free. You just have to trade your time or skills.

Some people work in hostels, caretaking properties, or helping elderly residents in exchange for free room and board. Others rotate between house-sitting gigs or live-in nannying roles that include housing.

A few years ago, I met a woman who lived at a boarding school where she helped teach and care for the kids who attended. She and her husband were actually able to live on the property with their young kids as well. The family did this for several years and I imagine they saved a lot of money.

If you’re flexible and open to an alternative lifestyle for a while, this can be a great way to save aggressively toward other goals like debt payoff or a down payment.

7. Tiny Home (With a Twist)

I said earlier that a tiny home might not be for me, and I stand by that! But I’ve seen some surprisingly realistic tiny home setups that offer comfort and affordability. For example, one couple I read about built a tiny house on wheels for under $30K and parked it on a relative’s land.

They pay no rent, have a cozy 350-square-foot home, and are saving up to buy a larger home in cash one day.

The key here is intentionality. If you go tiny to save aggressively, make a plan for where you’ll park it, how long you’ll live there, and what your next steps will be.

Which Option Could Work for You?

There’s no one-size-fits-all answer to affordable housing. But If your rent or mortgage is eating up most of your paycheck, it’s okay to question it. It’s okay to want more freedom and less stress. And it’s more than okay to choose a path that looks a little different than the norm.

Housing is one of the biggest levers you can pull to change your financial future, and you don’t have to live in a shoebox to do it.

That said, if downsizing, moving, or house hacking feels impossible in this season, don’t write off savings altogether. You can start lowering your living expenses immediately by trimming what flows out each month. Think groceries, utilities, subscriptions, transportation, and bill timing.

Small wins stack up fast: renegotiate a couple of bills, align due dates so you’re not paying late fees, plan a week of low-cost meals, and cancel a “meh” subscription you barely use. These aren’t forever fixes, but they buy you breathing room while you work toward bigger housing changes. Check out these other blog posts to help you get started:

Let me know in the comments: have you tried any of these cheap ways to live? Are you thinking about a move or lifestyle shift to save money? I’d love to hear your story.