We’re about to hit you with some cold hard facts. There are THREE major categories in your life that if tweaked slightly, could save you BIG BUCKS. If you can\u00a0master\u00a0this post and the upcoming posts on our \u201cMaster\u00a0The\u00a0Big\u00a0Stuff\u201d series, your path to FI will be SO much easier.\u00a0<\/p>\r\n\r\n\r\n\r\n

What do we mean by\u00a0Master\u00a0The\u00a0Big\u00a0Stuff?<\/p>\r\n\r\n\r\n\r\n

The biggest three expenses for most people include housing, transportation and food. We want to emphasize that optimizing your savings in these three areas will likely save you hundreds, if not thousands, each and every month. Rather than focus on saving the pennies, focus on the areas where you can save BIG.<\/p>\r\n\r\n\r\n\r\n

If you can focus on streamlining your savings in these big categories, the little things that bring you joy that come at a small cost in comparison, like catching up over a coffee with a friend every so often or going out to lunch occasionally with a coworker, doesn\u2019t impact your FI journey as heavily.<\/p>\r\n\r\n\r\n\r\n

The goal is obviously to take these additional savings each month and throw it at your debt or start propelling your investment accounts.<\/strong> Onward and upward.<\/p>\r\n\r\n\r\n\r\n

This first part of the Master The Big Stuff Series is going to focus on housing. We won’t cover buying and flipping homes or rental properties, or being a property manager for a house you don\u2019t occupy (although that\u2019s definitely another way to reach FI too, get that passive income!). This is strictly about reducing the amount you currently pay to have a roof over your own head. Let\u2019s get into it!<\/p>\r\n\r\n\r\n\r\n

Financially Optimize Your Living Situation<\/h2>\r\n\r\n\r\n\r\n

Rather than spend over $1,000\/month on rent and pay 100% for utilities in a 1\/1 apartment, rent out a 2\/2, get a roommate and cut your housing costs in HALF.<\/p>\r\n\r\n\r\n\r\n

Rather than buy a 3,500 square foot house, that you’ll likely spend countless hours cleaning, why not buy a 1,500 square foot townhouse for HALF the price which still allows you to live comfortably and invest the difference?<\/p>\r\n\r\n\r\n\r\n

OR buy that\u00a0big\u00a0house, but rather than let the extra rooms sit empty 90% of the time, become a landlord and rent those rooms out to roommates to COVER YOUR MORTGAGE (OR MORE)? Then downsize to a smaller place when you no longer want roommates and take the proceeds and invest it?<\/p>\r\n\r\n\r\n\r\n

OR rent a room out in your home on Airbnb? Maybe you live in an area bumping with tourism and could make some decent cash during season? Or maybe your city or town holds an annual event or conference where you could rent out your place and go on vacation during that time instead to avoid the crowds (I’m looking at you Calgary Stampede).<\/p>\r\n\r\n\r\n\r\n

OR convert your unused basement into a rental suite? This could be a double whammy, in that you could make extra monthly income renting it out while also likely increasing the value of your home by more than the cost of the upgrades.<\/p>\r\n\r\n\r\n\r\n

There are SO many ways to house hack and easily slash your housing expense by at least $500\/month. And this doesn\u2019t have to be a 20 year play. You likely can rent out rooms for a few years to supercharge your mortgage and become mortgage free in less than 10 years (depending on where you live of course and what the housing market is there).\u00a0<\/p>\r\n\r\n\r\n\r\n

An Example of House Hacking<\/h2>\r\n\r\n\r\n\r\n

Let\u2019s say Jessica had a $200,000 starting mortgage loan at a 4.5% interest rate for 30 years and she still has 25 years remaining. Sound like someone you know?<\/p>\r\n\r\n\r\n\r\n

If Jessica was able to contribute an additional $1,000\/month to her mortgage by house hacking and getting a roommate or two to live in the extra unused rooms in her home, then used her renters hard earned pennies to contribute towards her mortgage, her mortgage would be paid off 15 years and 9 months EARLY! That sounds like freedom to me!<\/p>\r\n\r\n\r\n\r\n

If she could super charge it even further and get even more than the $1,000\/month of rental income, she could obviously pay the mortgage off even faster than 9 years and 3 months instead of 25! BOOM.<\/p>\r\n\r\n\r\n\r\n

Our Real Life Senario<\/h2>\r\n\r\n\r\n\r\n

Ok ok, time for us to share our real life example. So, here\u2019s what we did:<\/p>\r\n\r\n\r\n\r\n

In 2012 I bought a 3 bedroom 1,900 square foot townhouse in Florida that cost $169,000 USD. It also had a large private den with a half bath on the first floor.\u00a0 The second floor was the main living space.\u00a0 And the third floor were the bedrooms.\u00a0 I put 20% down (~$34,000) and had a mortgage of ~$135,000 remaining.<\/p>\r\n\r\n\r\n\r\n

We rented out 2 of the 3 bedrooms and we rented out the large den\/bedroom as well for 2.5 years while we were living in the master bedroom. We charged anywhere from $650-900\/room\/month depending on the size. On average, we were making over $2,250\/month by renting out the rooms.<\/p>\r\n\r\n\r\n\r\n

We were paying our monthly mortgage like normal (which was WAY less than $2,250) but then supercharging it by throwing the additional $2,250 (minus taxes) towards our mortgage each month.\u00a0<\/p>\r\n\r\n\r\n\r\n

This cut our mortgage down from a 30 year payoff to a roughly 4 year payoff. 4 years!!! Would you have roommates for 4 years if it meant a paid off house afterwards?? It was a no brainer to us.\u00a0<\/p>\r\n\r\n\r\n\r\n

We ended up supercharging it even more by putting additional savings of our own towards the mortgage (about $1,000\/month from Court\u2019s personal account when it was just her living there and another $650\/month when Nic moved in) and paid the house off in 2.5 years.<\/p>\r\n\r\n\r\n\r\n

2.5 years and we had a paid off townhouse!\u00a0<\/p>\r\n\r\n\r\n\r\n

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