A Piece of Kake

This entry is part 10 of 18 in the series How To Live Cheap

How to Live and Travel Cheap

1. Live in a basement. Neil and I are going to take our cheapness to the next level this Saturday by moving into the Michaleks’ basement. We’re not doing it exclusively for financial reasons, but it will be nice to save some money on rent, which is infamously equivalent to “putting money down the drain.” But as we saw, buying a house isn’t necessarily as great of an investment as you might have thought, either. So what’s a young couple to do? Rent a room.

Our apartment rent has increased by $124 since we moved in three years ago. What a rip-off! To be fair, $50 of that was due to our month-to-month lease. But even that option increase $20 since last year. Meanwhile, the quality of our living space is getting worse with wear and tear. We love our apartment, it’s location, and the freedom it offers, but I think living with the Michaleks will be sweet!

Of course, this option probably isn’t viable for those with children or parents living with them. But perhaps the empty-nesters should give it some thought. And this is only option for those with friends kind and brave enough to let you live with them. The Michaleks are gracious beyond reason—they’re clearing out both of their downstairs rooms for us! And they’re courageous to invite us in while they figure out their new life as a family of three. But this leads me to the next suggestion about how to be cheap.

2. Have someone live in your basement (or rent a room). It’s a great way to offset some of the cost of your mortgage while serving someone else and having sweet fellowship right in your home. The Hughes have had three different people stay in their basement. Now they’re quite grateful for Mark’s seemingly quirky suggestion to move in with them. And they’re not the only ones who have tried “communal” living after marriage. We’ll be the second couple to stay with the Michaleks, and the Avdeevs also rented their spare basement bedroom.

So think about it. Is there someone who could use a cheap place to stay, and maybe a better living situation as well? Could you use a couple hundred bucks to go toward your mortgage payment? (Of course you could!) Does your house floor plan allow privacy in at least one extra room, or is there a way you could put up a wall or finish a room to make this possible? Recruit someone who wants to move in and have them help you make the necessary improvements.

3. Pay for everything with a credit card. No doubt that sounds like the worst financial advice you’ve ever heard. But you have to follow these conditions:
1. Use a credit card with a points program.
2. Always pay off the balance each month. This means you’ll never pay interest, but also that you should never buy something you don’t have the money to pay for right away.
3. Pay for as many of your expenses as possible with that one card. You want to rack up the points if you’re going to spend that money anyway.
4. Actually redeem the points. Let them pay for your vacation, new ipod, or Calphalon pots and pans.

Hawaii, here we come!

This is how “cheapies” like us are flying to Hawaii in two weeks (sorry Joe, I had to mention it). We got a free plane ticket, and I carefully watched the flight prices for months until we could score a great deal on the second ticket. We also have a free place to stay which will save a ton. So I guess having friends in warm places is also key to being cheap.

I must repeat: do not pay interest on your credit card! That is the opposite of being cheap. If you are paying interest, you’re effectively paying for people like us to go to Hawaii. Now doesn’t that suck?