When I graduated from college in 2015, I had one goal: to be debt-free. I dreamt of a life of flexibility and freedom, where I could travel and pursue my interests without being tied down by a monthly payment or compounding interest.
So during my first year in the real world, I knew what I had to do: pay off my $14,000 of student loan debt as quickly as possible. (Spoiler alert: I did it in just seven months.) I got there by being ruthless when it came to slashing my expenses and finding creative ways to live on less, like taking advantage of the sharing economy.
Here’s how renting helped me shave $5,000 off my yearly budget.
My 2000 VW Cabrio was the first item I put under financial scrutiny. The options were simple: Keep it or sell it. On the one hand, I needed a way to get to my office in San Diego which was about 8 miles away from my apartment. But I was also spending nearly $500 per month on maintenance—there was that memorable time it shut off on the freeway—gas, parking and insurance. (Fortunately, I didn’t have a car payment.)
While I was crunching the numbers and considering my options, the decision was made for me when my car broke down beyond repair. So I sold the car to a junkyard for $700—and just like that, I was car-free.
I decided not to buy or lease a new car and instead stick with ride-share and rental options like Car2GO, Zipcar, Uber and Lyft—plus my bike and the bus—as my primary new modes of transportation. On average, it costs about $70 per week to get to and from work and to run errands. On weekends, I ride with friends whenever possible or split Uber fares. Plus, my partner has a car, which helps.
Because I lived in Los Angeles for two years prior, this transition was easier than I expected. I was used to walking to my job and college classes, hopping on buses, biking busy roads and requesting Ubers. My coworkers think I’ve lost my mind, but I just smile to myself because I never have to worry about tickets, registration or anymore highway breakdowns.
What I paid to own: $6,000
What I pay to rent: $3,640
Yearly savings (plus profits from selling my car): $3,060
When I landed a media relations job at a university and needed a business-casual wardrobe, it seemed like an expensive proposition—and a big threat to my goal of paying off my loans. But as I researched budget-friendly options, I stumbled across wardrobe rental companies, like The Ms. Collection, Rent the Runway and Le Tote. (Wardrobe rental options for men include The Mr. Collection and The Five Four Club.)
Intrigued, I looked into Le Tote, which sends you unlimited boxes every month, each with three pieces of clothing—everything from jackets with capes to faux-fur leggings—and two accessories. When you’ve worn everything in the box, you ship it back, and within four days, a new one arrives. The cost: $59.
I was new to the workforce, so I didn’t have much budget data of my own to compare. Plus, I tended to shop for clothes in bulk: Some months, I spent nothing—others, I’d drop $200 on a single trip to Ross. But overall, I’d say my clothing costs lined up with the average consumer spending of around $150 a month on apparel and services, which made a service like Le Tote a great deal. Especially considering it also provides a glamorous, constantly changing wardrobe. Win-win.
What I paid to buy: $1,800
What I pay to rent: $708
Yearly savings: $1,092
It might be because I live in sunny California, but sports equipment has always been a line item in my budget. Certain equipment like surfboards and paddleboards can retail between $200 to $500 each, though, so buying definitely wasn’t in my budget.
Believe it or not, local universities can be a great resource for discounted rentals. Since they’re already offering equipment to students, it doesn’t cost them anything to rent to the community, as well. For a total of $50, I scored one-day rentals on two beach cruisers, a stand-up paddleboard and surfboard from the university where I work—more than enough to get my summer sports fix.
What it costs to buy: About $350
What I pay to rent: $50
Yearly savings: $300
When it comes to cutting expenses, entertainment is typically one of the first things people sacrifice, but it’s also one of the most painful. After a hard day at work, my favorite way to unwind is with a glass of wine and a good book or cup of cocoa and Food Network streamed through a $20 monthly service called Sling. Before rediscovering my love for the library, I’d spend about $20 on two new books every month and almost as much on movies. (My student ID got me $8 tickets—a bargain in Southern California—and I typically splurged twice a month)
After I rediscovered my love for the library—which is filled with free books, magazines, DVDs and even new movie releases—I paid a grand total of $0 for these things. I did, however, satisfy my House Hunters addiction by keeping my $9 monthly Netflix subscription. But other than that, the library was my entertainment sanctuary.
What I paid to buy: $672
What I pay to rent (Netflix): $108
Yearly savings: $564
By renting instead of buying, I was able to save $5,002, which was 35 percent of my student loan balance. The best part? I never felt like I was sacrificing anything. In fact, my life improved. The stress of car maintenance, overstuffed cupboards and discarded book purchases disappeared from my life. In its place, I was left more money and freedom—and a debt-free life.