Splurge on Food, Save on Housing

I often find it amusing when people focus stubbornly on optimizing one particular dimension; maybe it's someone frugal making sure they save on their food bill by ensuring they cut out takeaway coffees, or maybe it's someone booking cheap flights for their holiday destination before booking an Airbnb.

I've got some bad news, buddy, but housing is your biggest cost (unless you have wealthy benefactors, in which case, why are you reading this blog post??). The classic rule you hear is to spend 1/3 of your income on housing, but why? Do you have to spend excessive amounts on rent? When you go on holiday, unless you are flying to New Zealand for a day, almost everywhere you go, accommodation will be your biggest dollar bill.

There's something about paying excessive amounts for rent that just makes me uncomfortable. Though only one thing makes me even more uncomfortable, and that's the tied-down nature of owning a house! I choose to keep my freedom over having a mortgage; thank you!

I choose to keep my freedom over having a mortgage.

The median annual earnings in London are 39,000 pounds, while the median monthly rent is 1,500-2000 pounds for a 1 bedroom flat, a total of 18,000 - 24,000 pounds/year. That's ~50% of your earnings going straight into rent, let alone food, transport, or any joys in life!! Because you know what, money does provide you with a little freedom.

Clearly, this is a pretty illogical system, but I love London. I love big cities and all the interesting people that they suck in. One of my favorite blog posts by Paul Graham talks more about this with Cities and Ambition.

Alongside this thought, many people talk about "you become more and more like the people you spend the most time with," which is why I don't live in the countryside. I want to be surrounded by ambitious people challenging the status quo and willing to make sacrifices. You don't end up in cities like SF or London by mistake; you end up there because you are willing to pay the price for the people you spend time with.

A friend of mine once said something along the lines of...

often if you think a little more creatively, you can probably figure out a way to achieve whatever you want.

And I am simultaneously proud and embarrassed by the level of creativity in my quest for cheaper housing. So here are Flo's top ways to cut costs.

1. Inherit a mansion (honestly, we all know this would be the easiest way, though not a tip I have succeeded at)).
2. Do you work a remote job? Do you enjoy looking after pets? Try housesitting. I've spent the last 6 months not paying rent. Create a profile, ask some friends for references, and then apply for some obscure sits to start with (somewhere that is a less desirable location). The more reviews you get, the easier time you will have at finding new places. I've housesat in the South of France, London, and I am currently spending 3 weeks in Berlin, with no housing costs and an adorable cat to hang out with! *Note: I am very privileged being a white female; I probably have an easier time finding sits because of these two factors.
3. Buy a cheap house in the south of France, do it up, and invite all your friends!!
   This is the real dream, to have a 6-month holiday with friends in cheap locations with good food and weather. HMO if you are interested. This might happen! You can buy a 100-year-old homestead in the South of France for ~100K euros for a lifetime of joy and friendship?!
4. Or just rent an Airbnb in a hotter climate for a month or two of your winter and invite all your friends!!
5. Buy a house (or rent one in your central base e.g., London) and then list it on Airbnb for 3 months a year during the peak season (and go to France and hang out with me??). At peak London rates, you can make 250 pounds a night --> that's around 15,000 - 21,000 pounds from just 3 months of rentals!! Then you can enjoy your time in London for the rest of the 9 months. Plus we all know that you should never spend the entirety of winter in London, it's not good for anyone!
6. Message people on Airbnb and set up a 9-month/year unofficial contract on the down low. There's a law for Airbnb rentals that says you can only rent a home out for 3 months a year, and 7% of London homes are listed on Airbnb each year! What happens to them all the rest of the year? a) either they cheat the system, or b) they might be empty?? Try messaging a few and see if they'd be interested in doing a 9-month-a-year deal, then go somewhere sunny and cheap for 3 months a year (or go housesitting?!)

*Caveat: my parents live in London, so it makes this lifestyle particularly easy for me, if anything falls through, I can stay at there's, and it's honestly kinda nice to be forced to visit in some monthly-ish cadence. This is very privaleged though, and if you didn't have somewhere to stay as a backup, housesitting might be much more stressful!

So not paying rent and splurging on food and transport reduces your cost of living by 2/3. I spend ~700 pounds/month on all my expenses. This leaves me lots of room to save and also enjoy life! Despite being on a founder salary. I can eat out without a feeling of restriction or needing to save money.

You are probably thinking, why are you sharing such great (unscalable) tips and tricks to the entirety of the internet?? Once everyone knows your ideas you'll lose all your IP! I hate to break it to you, but you are probably not going to follow any of my ideas because people are notoriously bad at following through. It's not the ideas that matter. It's the execution.