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While reading the newspaper this weekend, I ran across an article about people renting out rooms and/or taking on roommates to make ends meet. Not surprisingly, the current economic climate has resulted in a major uptick in the number of people looking for roommates. And for good reason… Taking on a roommate not only dramatically reduces your rent/mortgage obligation, but can also save you a substantial amount of money when it comes to utilities.
Better still, we’re talking about post-tax dollars here, so your savings will be amplified. Remember back in the 1700s when Benjamin Franklin said that a penny saved is a penny earned? No? Well, it doesn’t really matter, because he was wrong. Rather, as Andrew Tobias has argued, a penny saved is more like two pennies earned. The reason for this is that taxes take a substantial bite out of every dollar that you earn. Thus, while I’ve previously made the case for balancing your budget by earning extra money, the value of trimming your expenses cannot be overstated.
So… This all begs the question of whether (or under what circumstances) you’d be willing to take on a roommate (or housemate, as the case may be). If you’re already doing so, please share your thoughts. If you’re thinking about it, what’s holding you back? If you’re dead set against it, what are your primary objections?
As for us, there’s really no way we could pull it off. We have four kids, so bringing in an outsider is pretty much out of the question even if we had the space. Fortunately, we’re on very solid financial footing, so this is mostly an exercise in hypotheticals for us. Nonetheless, I thought it would be an interesting topic for discussion.