If you're like most people, you haven't socked away nearly enough for retirement. About half of people aged 35 to 44 have saved less than $25,000 for retirement, per the 2019 Retirement Confidence Survey. Among those 55 and older, 23% have saved less than $25,000. Yikes.

That should have many people looking to beef up their investing, but that's easier said than done, when many of us are not exactly flush with extra cash. So here's one way to free up more money for investing -- shrinking your home costs.

A small model house is atop some bundles of hundred dollar bills.

Image source: Getty Images.

There are a variety of ways you can wring more money out of your housing situation. Let's review some key ones.

Downsize to a smaller home

Downsizing to a smaller home may be an obvious money-saving move, but you may be underappreciating how powerful it can be. Consider that a smaller home is likely to mean:

  • Lower mortgage payments
  • Lower tax bills
  • Lower insurance costs
  • Lower maintenance expenses
  • Less costly repairs

And as a bonus, less home to clean! It might require your decluttering your current home, but you may be able to generate significant cash by selling many of your no-longer-needed items. 

If you can shrink the costs above by $300 per month, that's $3,600 in annual savings that you could invest. Shrink them by $500 monthly, and you can save $6,000 per year!

Move to a less costly area

Different parts of the country have different costs of living, and if you move to a lower-cost region, even if you don't move to a home much smaller than your current one, you're likely to end up spending less. The World Population Review (WPR) has ranked all U.S. states according to their cost of living, and found that the states with the highest cost of living are Hawaii, California, New York, Oregon, and Massachusetts. The states with the lowest costs are Mississippi, Arkansas, Oklahoma, Missouri, and New Mexico.

Looking at just grocery expenses, as an example, the WPR data found Texas costs at about 10% below average, and New Jersey at about 10% above. When it comes to utilities, people in Idaho pay about 17% less than average, and those in Connecticut, about 28% more. These costs can really add up.

Mow your own lawn

If you look closely at all your home-related expenses, you might find that there are some you can eliminate by doing a little more work yourself. For example, if you spend $30 per week on lawn mowing and yard maintenance, that's $1,560 per year that you could keep by doing that work yourself. If you spend $150 per month getting your home cleaned, you could save $1,800 per year doing that yourself. It's the same with other tasks such as repainting rooms in your home or cleaning your gutters.

Keep up with maintenance

Speaking of maintenance, remember that neglecting it -- even if that's saving you a little money -- can be costly. Fail to have your chimney cleaned regularly, and you could end up with a house fire. Fail to get oil changes and other car parts services on schedule, and you could end up with costly repairs needed at inopportune times.

Refinance your mortgage

Refinancing your mortgage is another way to save a lot of money with your home, though you should read up on it first and weigh all the issues. For example, refinancing a 12-year old 30-year mortgage into a fresh 30-year one with a lower interest rate will shrink your monthly payments, but it also restarts the clock, with a paid-off home once again 30 years away. (You can shorten the length of your loan substantially by making extra payments against principal.) Think, too, about how long you plan to live in your home. If you refinance now and then sell the home in three years, you may not have saved enough to offset the closing costs from the refinancing.

Take in paying guests

Finally, consider renting out space in your home, if that makes sense for you. Services such as Airbnb or Vrbo let you rent out a room or section of your home by the day, week, or longer. You might even rent out your entire home, if you can be somewhere else for parts of the year. This can an especially lucrative option if you live in a place that many people need or want to go to.

Being a little creative and disciplined can help you save hundreds or thousands of dollars per year, which can turbocharge your saving and investing, helping you secure a more comfortable retirement.