If your budget is feeling the pressure from housing costs, you’re certainly not alone. According to a new survey from Built and Talker Research, more than half of those surveyed think they’re paying too much for their homes. In fact, many reported spending an average of 42% of their annual income on housing-related expenses.
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GOBankingRates talked to some financial experts for advice for homeowners dealing with housing costs that are straining their finances.
Consider Refinancing or Securing Renters
“Housing is usually the biggest line item in any budget, and when it starts creeping toward half your income, it can feel overwhelming,” said Taylor Kovar, certified financial planner (CFP) and CEO of 11 Financial. “The first step is to see if refinancing or adjusting your loan makes sense with current rates. Even a small shift there can free up hundreds of dollars a month.”
If that’s not an option, according to Kovar, think about ways to make your house work for you, like renting out a room or a garage apartment.
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Look at Other Options
According to Christopher Stroup, founder and president of Silicon Beach Financial, two other options to consider are increasing your income streams and tightening non-housing expenses.
“Cancel unused subscriptions, negotiate utility and phone bills and limit discretionary spending,” Stroup said. “While small changes add up slowly, together they create a cushion — ensuring housing doesn’t crowd out your ability to save and invest.”
Plan a Strategic Move
And for people who know their housing costs just won’t be sustainable long-term, it helps to start planning ahead now for a move into something more affordable rather than waiting until you’re stuck, per Kovar.
“Moving may feel extreme, but shifting to a lower-cost neighborhood can reset your financial trajectory,” Stroup said. “Today’s remote and hybrid work options make this more feasible. By trimming housing costs, you create room in your budget for retirement savings, emergency funds and reinvestment in personal or professional goals.”
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This article originally appeared on GOBankingRates.com: More Than 50% of People Think They Pay Too Much for Their Homes
