One of the best ways to save money on the cost of housing is by renting out your spare bedroom -- in other words, taking in a "roommate."
Depending on where you live and the quality of your home, renting out your spare bedroom can yield anywhere from $200 to $1,200 (or more) per month. That adds a substantial chunk of money to your bottom line.
You'll save on the cost of housing, which translates into a bigger emergency fund, lower debt and other benefits. Your roommate will also pay a portion of the utilities, which further reduces your bills.
But should you allow a roommate to move in with you? That's a personal decision. Here are some of the pros and cons.
1. Social benefits. If you're naturally introverted or you tend to stay at home a lot, living with another person might force you to come out of your shell a little bit more. A roommate will naturally provide you with some social interaction, and you may even become friends.
2. Increased savings. There are plenty of people who have paid off a large chunk of their mortgage by renting out a room in their home. While prices vary dramatically across the nation, you'll certainly receive several hundred extra dollars each month -- and this can go a long way toward paying down your mortgage, or contributing to your rent payment.
3. Shared utilities. Imagine slashing your electric, gas, cable, TV and other bills in half -- instantly. If you're living with someone, this is your new reality.
However, the "windfall" that comes with sharing your living quarters has some drawbacks, as well.
1. Lack of privacy. You and your family can't have the kitchen or living room all to yourself. Instead, you will be sharing common areas with the person renting your spare room.
2. Sharing appliances. Create some extra space in your refrigerator, washer, dryer, microwave and pantry. (OK, a pantry isn't an appliance, but you get the idea.)
3. Noise and guests. You'll have to adjust to your housemate playing music, talking loudly on the phone and bringing home guests.
With all that being said, is renting out your spare bedroom worth the money? Or is it more of an inconvenience than is justified?
The answer depends on a few factors, such as:
- Are you in debt? If you're trying to pay down high-interest debt, it makes sense to temporarily adjust to a roommate while you get your financial health on track.
- Do you have children? It's easier to live with roommates if you are child-free.
- What are your goals? If you want to quit your job, travel across the world, or pursue some other worthwhile but expensive goal, renting out your bedroom makes sense.
Paula Pant helps people ditch the cubicle and live on their own terms. She's traveled to 30 countries, owns six rental property units and hasn't had an employer since 2008. Her blog, "Afford Anything," is the gathering point for a tribe that refuses to say "I can't afford it." Follow Paula on Twitter: @AffordAnything.