The Cheapest Way to Live: Practical Strategies to Cut Your Costs

Finding the cheapest way to live isn’t just about extreme frugality—it’s about making smart lifestyle choices that reduce expenses without sacrificing your well-being. Whether you’re trying to save for a goal, pay off debt, or live more simply, lowering your cost of living can help you gain financial freedom.

This comprehensive guide covers low-cost housing options, budget-friendly food strategies, transportation savings, bill-reduction tips, and simple lifestyle habits that dramatically lower monthly expenses. The goal is to help you build a sustainable, affordable lifestyle that still feels comfortable and manageable.

Affordable Housing Options

Housing is almost always the biggest monthly expense. Reducing your housing cost can significantly lower your overall cost of living. Here are some of the most cost-effective options.

1. House Hacking

House hacking means using your home to generate income that pays for your housing costs. This can include:

• Renting out a spare bedroom

• Turning a basement into a rental unit

• Hosting a long-term tenant

By earning rental income, you can reduce or even eliminate your monthly rent or mortgage payment. Many people use this strategy to live nearly free.

2. Renting a Room Instead of an Entire Apartment

Room rentals are often 50–70% cheaper than renting a full apartment. This option works well for students, young professionals, and anyone who wants simple, minimal living. Benefits include:

• Cheaper utilities

• Included amenities (laundry, Wi-Fi, etc.)

• Lower security deposits

3. Living With Roommates

Sharing a home with roommates immediately cuts rent and utility costs. Splitting expenses creates huge savings:

• Lower rent

• Shared utilities

• Shared household items like cleaning supplies

This is one of the easiest and most reliable ways to cut housing costs in half or more.

4. Tiny Homes and Small-Scale Living

Tiny homes, studio apartments, and micro-units can drastically reduce housing costs. You’ll spend less on:

• Rent

• Utilities

• Furniture

• Maintenance

Downsizing forces you to live with less, which also reduces clutter and overall spending.

5. Living With Family Temporarily

If possible, staying with family for a short period can help you get ahead financially. It’s not always ideal, but it can cut your living costs to nearly zero while you:

• Pay off debt

• Save for a down payment

• Build an emergency fund

Lowering Transportation Costs

Transportation is another major expense. Minimizing driving or eliminating car payments can dramatically reduce your cost of living.

1. Ditch the Car if Possible

Owning a car includes:

• Monthly payments

• Insurance

• Gas

• Repairs

• Registration

• Parking fees

If you live in a walkable area or near public transit, ditching your car can save thousands per year.

2. Use Public Transportation

Buses and trains are far cheaper than owning a car. Monthly passes offer additional savings and reduce fuel costs entirely.

3. Carpool or Rideshare

If you still need a car occasionally:

• Share rides with coworkers

• Join a carpool group

• Use rideshare apps only when necessary

This helps cut gas, parking, and maintenance expenses.

4. Choose a Fuel-Efficient or Older Used Car

If you must own a car, reduce costs by:

• Buying used instead of new

• Choosing a car with high MPG

• Avoiding unnecessary upgrades

Used vehicles avoid major depreciation, making them more cost-effective long-term.

Budget-Friendly Food Strategies

Food is one of the biggest regular expenses for most households, but with a little planning and smarter habits, you can eat well without overspending. By focusing on simple meals, strategic shopping, and consistent planning, you can significantly reduce your monthly food costs while still enjoying nutritious, satisfying meals.

1. Meal Planning

Meal planning is one of the most effective ways to save money on food. When you know what you’ll cook for the week, you buy only what you need and avoid unnecessary impulse purchases. It also reduces food waste, which can quietly drain your budget.

A good meal plan includes:

• Choosing 5–7 simple meals to rotate for the week

• Checking what ingredients you already have

• Making a detailed grocery list based on your plan

• Prepping ingredients ahead to avoid takeout temptations

With a solid plan, you’ll have fewer last-minute purchases and a more predictable grocery budget.

2. Cook at Home

Eating out—even inexpensive fast food—adds up quickly. Cooking at home can reduce food expenses by as much as 70%, especially when you rely on low-cost ingredients and simple recipes. Home cooking gives you more control over portions, nutrition, and cost per meal.

Some affordable meal ideas include:

• Rice and vegetables with simple seasonings

• Pasta dishes with basic sauces or sautéed veggies

• Homemade soups using leftover veggies, beans, or chicken

• Slow-cooker meals like chili, stews, or shredded chicken

These meals are filling, easy to prepare, and cost just a few dollars per serving.

3. Buy Generic Brands

Store-brand or generic products often provide the same quality as name brands but at a much lower price. Items like canned goods, pasta, spices, cleaning supplies, cereal, and dairy typically taste the same but cost significantly less.

Switching to generics for everyday staples can reduce your grocery bill without sacrificing quality.

4. Shop Sales and Use Coupons

Strategic shopping can produce major savings, especially when you combine sales with coupons or loyalty programs. Look for:

• Weekly grocery store discounts

• Buy-one-get-one (BOGO) deals

• Printed or digital coupons through store apps

• Loyalty member pricing, which often applies automatically at checkout

Timing purchases around weekly sales cycles can help you save both short-term and long-term.

5. Buy in Bulk

Buying in bulk is one of the smartest ways to cut food costs, especially for items you use regularly. Staples like rice, beans, oats, flour, pasta, and frozen vegetables have long shelf lives and cost much less per unit when purchased in larger quantities.

Tips for bulk buying:

• Choose non-perishable or long-lasting foods

• Store items in airtight containers to maintain freshness

• Cook large batches and freeze leftovers to avoid waste

Bulk purchases mean fewer shopping trips and lower overall grocery expenses.

Cutting Utility and Household Costs

Reducing your monthly bills is essential for lowering your cost of living. Small changes add up quickly.

1. Reduce Electricity Usage

Save on electricity by:

• Turning off lights when not in use

• Using LED bulbs

• Unplugging chargers and devices

• Limiting air conditioning or using fans

2. Save on Water

Lower your water bill by:

• Taking shorter showers

• Fixing leaks

• Using low-flow showerheads

• Running full loads of laundry and dishes

3. Lower Internet and Phone Bills

Many people overpay for data plans or internet speeds they don’t need. Consider:

• Switching to a cheaper carrier

• Using Wi-Fi instead of data

• Bundling services

4. Buy Secondhand Household Items

Instead of buying new furniture and appliances, check:

• Thrift stores

• Online marketplaces

• Community buy-nothing groups

Secondhand shopping can save hundreds—sometimes thousands—of dollars.

Frugal Lifestyle Habits That Lower Daily Costs

Living cheaply doesn’t require sacrifice—it often means being more intentional.

1. Simplify Your Purchases

Before buying, ask:

• Do I need this?

• Is there a cheaper option?

• Can I borrow it instead?

This reduces impulse spending significantly.

2. Cut Subscriptions

Cancel unused subscriptions, such as:

• Multiple streaming services

• App memberships

• Gym memberships

Even $10–$20 per month adds up over a year.

3. Embrace Minimalism

Fewer possessions mean:

• Less clutter

• Less maintenance

• Less temptation to spend

Minimal living helps you focus on what truly matters.

4. Do DIY When Possible

Learn simple skills like:

• Basic home repairs

• Lawn care

• Cleaning hacks

• Cooking

DIY saves money and builds useful skills.

5. Enjoy Free Entertainment

Low-cost or free activities include:

• Hiking

• Library visits

• Community events

• Picnics

• Free online courses

Entertainment doesn’t have to be expensive to be enjoyable.

Low-Cost Living Options That Work for Many People

Many people choose alternative living styles to reduce expenses. While not for everyone, these options can significantly lower living costs.

1. RV Living or Van Life

Living in an RV or van eliminates rent and provides mobility. It works best if:

• You enjoy travel

• You’re comfortable with small spaces

• You can access affordable overnight parking

2. Off-Grid Living

This can save money long-term, but requires:

• Solar panels

• Water storage

• A rural location

While startup costs exist, off-grid living can dramatically lower utility bills.

3. Living Near Work

Eliminating long commutes reduces:

• Fuel costs

• Car maintenance

• Stress

Some people even walk or bike to work, saving thousands annually.

Building a Sustainable Low-Cost Lifestyle

The cheapest way to live isn’t only about trimming expenses here and there—it’s about creating a lifestyle that naturally supports low costs over time. Instead of constantly stressing about money, you build habits and systems that keep your finances stable and improve your daily life. A sustainable, low-cost lifestyle focuses on long-term thinking, smarter decision-making, and creating routines that make saving feel effortless rather than restrictive.

Some key sustainable habits include:

• Sticking to a budget: A well-planned budget gives you clarity, control, and confidence. It helps you understand where your money goes and ensures you’re consistently spending below your means. When you follow a budget long-term, it becomes second nature and removes the guesswork from your financial decisions.

• Building an emergency fund: Unexpected expenses are a part of life. A small emergency fund—even just a few hundred dollars at first—prevents simple setbacks from turning into major financial problems. It reduces stress, keeps you out of debt during emergencies, and supports long-term financial security.

• Prioritizing needs over wants: Learning to separate what you truly need from what you simply want helps you make smarter choices. It doesn’t mean giving up everything you enjoy—it means being intentional. When your everyday decisions are guided by priorities rather than impulses, saving money becomes effortless.

• Avoiding lifestyle inflation: As income increases, many people start spending more without realising it. Keeping your lifestyle modest, even as you grow financially, allows you to save, invest, and stay ahead. It’s one of the most powerful habits for building long-lasting financial stability.

When you create a system that fits your lifestyle and goals, living cheaply becomes easy and natural. Instead of constantly trying to cut back, your habits work in your favour—helping you save more, reduce stress, and enjoy a simpler, more intentional life.

Final Thoughts

Finding the cheapest way to live doesn’t mean living without joy or comfort. It’s about making thoughtful choices that reduce waste, cut unnecessary expenses, and help you reach financial goals faster. By lowering housing costs, reducing transportation expenses, simplifying your food budget, and adopting frugal habits, you can live well while spending far less.