In recent years, living costs in many major cities worldwide have been pushed a lot higher by savings acquired during the pandemic among other factors. This development has forced many families to consider moving down to cities with more affordable housing options and costs of living. Whether you decide to move or remain in your city, there are several ways to survive the rising living costs, they include:
1. Take Out A Loan
At first glance, the idea of taking out a loan in a financial crisis sounds terrible, especially when you consider the stress it takes to pay back some loans. The best type of loan to take to keep your head above water during a financial crisis is a reverse mortgage loan, unfortunately, not everyone qualifies for this type of loan.
All reverse mortgage loans offer homeowners who have considerable equity on their home, a chance to convert their home equity to cash while still living in their homes. Homeowners do not have to pay back these loans, until after they’re either dead or no longer living in the home. People who have managed to buy their own homes can afford to remain in cities with a high cost of living because they have options of taking these kinds of loans to keep up with the cost of living. Many younger couples do not have such options and it is not unusual if you’re thinking of moving to a new location where life is more affordable.
2. Take Up A Side Hustle
Even before the costs of living skyrocketed in most cities, many had already discovered the beauty of owning a side hustle. It’s a great way to establish a separate source of income from which to invest, pay off debt and save considerably. The best part of starting a side business is that you can always pick a field that you’re passionate about. If you’re someone who knows the difference between forex and stocks and has a good handle on investments, you can also make some investments and let your money work for you.
With the lockdown brought on by the Covid-19 pandemic, many people discovered you can do a lot of work right out of your home. You can go to your 9-5 job and still dedicate a few hours to your side hustle outside your work hours. A side hustle is also a way to ensure you do not go hungry in case you lose your day job as a result of the pandemic.
You’ll be more likely to succeed in a side hustle you’re passionate about so take your time to choose one where you think your strength lies. Some popular side hustles include e-commerce, freelancing, public speaking, providing services such as cleaning, de-cluttering, public speaking, cake making, dressmaking, and offering online tutorials among others.
3. Go On A Budget
With the high cost of living in many cities, having a household budget has become very important. Though it might not be easy, having a budget is one of the best ways to increase your household savings. Having a budget requires you to outline all monthly expenses and then look for expenses that could be eliminated or reduced. A budget would have you cutting costs on such expenses as a subscription to streaming services, eating out, and partying among others.
When on a serious budget, you’ll also have to evaluate your grocery spending and look for ways to cut costs. This may involve buying at cheaper stores, using coupons, and searching online for great offers before going shopping. You may also have to go from buying named brands to generic brands as this could save a whole lot of money.
To make life a lot easier, channel the savings you make on your budget towards paying off all your debt if you have any. High-interest debts can make it almost impossible to get your life in order and paying them off as soon as you can is one of the best ways to get your finances back on track. After paying off your debt, you’ll have more money to put towards your savings and a better chance of surviving the high cost of living.
4. Rent Out Your Spare Room
You can find a way to benefit from the current house prices by renting out the spare room in your home if there are any. You can also rent out your basement if you have one. According to recent statistics, the average monthly rent for all types of apartments in the U.S rose substantially in 2021. This means you’ll probably earn a lot higher for renting out your room today than you’d have done in the past.
5. Move To A Different City
If you have tried everything and still cannot manage to keep your head above water in your current city, then it might be time to move to a city with a lower cost of living. Moving to a different location to cut costs should be a final resort because there is no guarantee that you would be richer in a city with a low cost of living. For one, moving costs a lot of money and would take a huge chunk of your savings. In addition, such cities do not have as many high-paying jobs as the expensive cities do, so make sure you do some diligent research before you move.