My situation:

current place: ($1530) -1:15 drive from work

• small building, linear studio apartment shape, maybe 30x9 feet? small kitchen/bath
• rural, 20 min drive from city, hour walk to nearest town
• finished interior, but mice/rat problem
• landlord kinda weirdly tracking my movements, she doesn’t want me working from home too many ways a week

cheaper place: ($600) -50 min from work -standalone MIL in a shared house, bath/kitchen in main house, 9x9 feet

• more suburban, roads might be too dangerous to be walkable but if not, maybe 15 min walk to town -unfinished interior… no idea if there is a mice/rat problem but the kitchen area is separate.
• got along well with potential housemates

I make $3780/mo after taxes, budget now feels tight, but not sure if the extra $1000 a month would be worth a smaller/unfinished space. I feel it might be worth it because I could save/invest extra money, or use extra money to make the rental nicer.

Any extra money you can save (toward a 6 month safety buffer, and then investing for retirement) every single month while living within your means is typically the best option.

Investing $900 per month makes such a gigantic difference for anyone who doesn't have an unlimited budget. That's $10800 per year even before counting interest.

A shared flat is no dream situation, but this sounds like a potentially life changing difference.