Saving a shit load of money actually becomes much easier when you make this one change.
Accommodation is almost always the front runner on an adult’s list of expenses, followed closely by transportation and food. So it stands to reason that efforts should be directed to reducing that cost for anyone looking at increasing their savings rate.
One of the best ways to reduce this hefty expense is by flat sharing. Those few words may conjure up images of broke uni students or run-down boarding houses. However, I can assure you these are the exceptions. There is a growing trend among working adults looking to reduce their accommodation expenses through share accommodation. With real estate prices in Sydney sitting at insane levels, it is clear why.
Now this way of living isn’t for everyone. For the most part, those with families would be unable or unwilling to partake. But for those singles or wealth-building couples out there without children, this is one of the most significant decisions you can make to get ahead early in life.
Casting my mind to the stories Old Man Shuffler has told me, I realise that this is exactly what he did when he first arrived in this country! He arrived in Australia as an immigrant with close to no wealth and turned to share accommodation to make the most of the very little he had. The run-down working class Sydney suburb of Redfern was where my dad first called home in Australia (note that it is now an insanely expensive inner Sydney suburb).
Whilst in a much more fortunate circumstance, Pat the Shuffler has also literally not known any other way of living than share accommodation, since leaving the family nest. I have since shared living accommodation with my brother, friends and eventually with complete strangers! This has allowed me to live in very modern and luxurious surrounds and have access to plenty of space, at a fraction of the cost.
This is a simple concept in the business world known as utilisation. Anyone who has run a business, managed a project or dealt with resource management understands that utilisation is imperative to efficiency. Down time for resources is like watching money walk out the door.
The same concept holds true in our personal lives. For example, I may need the use of a kitchen or a balcony, but often never for more than a couple of hours a night. Likewise, all the household appliances (including the washing machine, fridge, kettle and iron) are all items I consider essential to my current lifestyle, but for the vast majority of the time they are sitting completely idle and unused. Perhaps if I wasn’t working 10 hours per day and spent more time at home, or if I had several children running around increasing this utilisation, I could justify having my own place. However until that time comes, the whole thing seems utterly insane to me.
Here is a quick rundown of what the utilisation of a few key resources and spaces in an apartment with 1 person could look like.
If this was the kind of utilisation a business gained from their equipment or employees, that business would soon be bankrupt. In the same way, by not making the most of the stuff we pay for, we are sending ourselves freaking broke. It is completely nonsensical. On the flip side, by house sharing we double, triple or even quadruple the utilisation of all these resources. It is the only non-insane choice for full-time working adults who are not yet rich and who have no children.
Even when house sharing, utilisation of all of shared space and resources is still minimal, typically still under 20%. So conflicts between resource usage are still rare and/or of little consequence anyway. I can count on one hand the number of times in the last 7 years of house sharing that a concession has actually had to be made in terms of resource sharing.
Let me entice you further
Flat sharing can easily save a single or a couple over AUD$300 per week in reduced rent and shared utilities. That is over $225,000 over a 10 year investment time frame!
There are also a few other added benefits:
- You will almost certainly make a new friend.
- The limited space will prevent any hoarding tendencies you may have.
- It forces you to be much smarter with your purchasing and usage of food, because you do not have endless space to store perishable foods that you will just throw out next week anyway.
- There is always someone walking around with a spare key if you accidentally lock yourself out.
The easiest and most convenient way to get started with shared accommodation that I know of is to get onto Flatmates.com.au.
Some may feel a deal of apprehension or fear around shared living arrangements. However the Flatmates.com.au system and many of it’s counterparts are quite mature with options. For instance, you can filter your search for a flatmate based on variables such as geography, gender and smoking habits. Advertisers are encouraged to write about themselves. Housemate seekers in turn are encouraged to meet with the advertisers to ensure they are compatible. My time using the platform has been an overall positive experience.
Some may have raised an eyebrow when I referred to apartment rent as a ‘smashed avo‘ in my last post. This post should give much needed context around why I made that remark. This is because you are paying for empty, unused space. It is of course convenient to have empty, unused space that you can then use when you want without compromise. For this reason, I place excess, underutilized space in the luxury category.
I consider renting or buying a full house or even apartment that has single digit utilisation as a luxury that I can reward myself with once I become rich enough to not need to work all the time*. Ironically by not working all the time, my utilisation of that space will increase to a point where the purchase is much more justified.
How much of the space that you pay for are you actually using?
Shuffling and sharing accommodation
Pat the Shuffler
*Assuming I do not have children that will increase that utilisation before then.