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Saving Money on Housing: Strategies for Millennials and Gen Z

The financial world can be a scary place, especially for the newer generations. They are faced with a never-ending stream of information on how to become financially stable, manage their money, invest wisely, and consider the pros and cons of living in major cities.

This information can be overwhelming, causing the younger generations to feel intimidated and hesitant to make financial decisions. In this article, we will discuss two topics facing millennials and Gen Z today: housing costs and the results of a GOBankingRates survey.

Gen Z Housing Costs

The cost of housing has consistently risen over the course of the last few decades. As a result, Gen Z finds themselves spending more of their income on housing than other generations.

A recent survey found that Gen Z spends about 45% of their income on housing. In contrast, baby boomers spend only 35%.

This leaves Gen Z with less disposable income for other necessities, such as bills, groceries, and savings. Experts believe that a person should spend no more than 30% of their monthly income on housing.

This allowance leaves ample funds for other monthly expenses and savings. The difficult part is determining what a reasonable budget for housing looks like, given the variable cost of living across the United States.

One way to cut back on housing costs is through budgeting. Being patient, making sacrifices, living with roommates, or moving back home can also be helpful.

Moving out of major cities is another option known as geographic arbitrage. This tactic can cut down on housing costs and help achieve a stable financial future.

GOBankingRates Survey Results

Recently, GOBankingRates conducted a survey on Americans’ personal finance behavior. The survey was conducted across multiple demographics, including topics such as personal finance, debt, remote work, investment, salary preferences, and monthly income spent on rent/housing.

The survey results showed that Americans are becoming more financially savvy. They are prioritizing emergency savings, paying off debt, and planning for retirement.

However, Americans are not doing as well with sticking to a budget and saving for unexpected expenses. When it comes to housing, survey results revealed that Americans spend approximately 30% of their monthly income on rent/housing.

This aligns with the experts’ advice for optimal budgeting. However, the survey found that 65% of respondents with a monthly income above $100,000 spend more than 30% on rent/housing.

Experts recommend spending no more than a third of your monthly income on housing. Therefore, if an individual is on a salary of $100,000, their housing budget should be no more than $30,000.

Anything more would be an over-extension of finances, leaving little room for other expenses and savings.


In conclusion, it is vital to consider how much should be spent on housing while ensuring financial stability. Budgeting and making sacrifices can help to combat the increase in housing costs, while living in less expensive areas can help achieve geographic arbitrage.

The survey results show that Americans are becoming more financially savvy while still struggling with some aspects of personal finance, such as saving for unexpected expenses. It is crucial to prioritize savings and budgeting to achieve financial security for the future.

Housing costs are a reality for everyone, but especially for younger generations. With uncertain economic times and a housing market that continues to rise, it can be challenging to find affordable housing options.

However, there are alternative ways to save money on housing. This article will explore several such strategies.

Move Back Home or Live with Roommates

One option to consider is moving back home. While this might not be appealing to everyone, moving back home can provide a significant savings opportunity.

It can allow you to eliminate the cost of rent, utilities, and groceries. This plan tends to work best for those who have a supportive family and who can secure employment in the area in which they reside.

Another option is to consider co-living. This concept involves sharing space or living quarters with roommates.

Co-living can take many forms, from informal shared residences to more structured communities. Cohousing is a type of co-living that allows people to share resources and communal spaces while still living in individual living quarters.

Co-living offers many advantages, including decreased housing expenses, shared responsibilities, and a sense of community. Additionally, co-living can provide social support, which can be particularly valuable for those who have recently moved to a new city or who are transitioning between life stages.

Move Out of Major Cities

Another alternative to consider is moving out of major metropolitan areas. While this may seem daunting, moving to less expensive housing locations can have several benefits, including decreasing housing costs and the cost of living.

Moving out of major cities also allows for geographic arbitrage. Geographic arbitrage involves taking advantage of regional differences in wages, cost of living, and housing prices.

This method can create significant savings and provide higher financial security. Furthermore, the rise of remote work during the ongoing global pandemic has created greater employment flexibility for many workers.

This means there are more opportunities for people to move to less expensive locations while still pursuing employment opportunities with stable incomes.

Other Ways to Save Money on Housing

There are other ways to save money on housing. One strategy is to choose housing that requires less upkeep.

For example, opting to live in a smaller apartment or downsizing to a more compact living situation can significantly decrease both rent and maintenance expenses. Renting versus owning a house can be an excellent way to save money as well.

When you rent, you do not have to worry about costly repairs or maintenance expenses. Additionally, renting allows for greater flexibility and the option to move if needed.

Other ways to save on housing include turning off utilities when not in use, shopping around for affordable renters insurance, and utilizing coupons or discounts when purchasing necessary household goods. Sacrifices will need to be made when it comes to saving money on housing.

Entertaining elaborate lifestyles or procuring expensive furniture should be avoided when trying to live on a budget. Opting for simplicity can help decrease costs while still providing a comfortable and welcoming living space.


Overall, housing costs can be a significant burden on finances. However, there are alternative strategies to save money on housing such as moving back home, living with roommates, co-living arrangements, moving out of major cities, and taking advantage of remote work opportunities.

These alternative methods may require sacrifices, but they can create greater financial stability and provide a comfortable living environment. Housing costs are a challenge for many people, especially for younger generations.

However, there are alternative ways to save money on housing, including moving back home, living with roommates, co-living, moving out of major cities, and taking advantage of remote work opportunities. These alternative strategies require sacrifices, but they can significantly decrease housing costs and create greater financial stability.

It is crucial to prioritize savings and budgeting to achieve financial security and to opt for simplicity when it comes to housing. Remember, geographic arbitrage can be a powerful tool for creating financial stability, and it is essential to consider the cost of living when making any budgeting and housing decisions.

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