Living the tiny life has many advantages including the freedom to pick up and move with ease, a smaller environmental footprint, and simplifying your life – allowing more time for the things you love. While all of these things are huge draws to living in a tiny home, another big factor is the financial freedom that comes along with tiny living.
In this article we’ll outline what we think are the four biggest financial advantages to living in a tiny home. Keep reading to find out how tiny living can allow you to reach your goal of financial freedom!
No Mortgage. We had to start with this one because it’s probably the most obvious. As of the end of 2018, roughly 64% of Americans owned a home, 63% of which had a mortgage. It’s virtually impossible for the average Joe to purchase a new home outright since the median cost of a home in the US is $315,000; however, the mean cost of a tiny home in the US is $30,000 if you build yourself or $60,000 if a contractor builds for you.
Not to mention the smaller footprint allows for a higher quality home with features such as heated floors, closed cell insulation, or custom cabinetry while still coming in at a fraction of the standard home cost. As you can see, whether you have your tiny home built, or build one yourself, tiny living yields significant cost savings in the mortgage department!
Lower Bills. The average residential electricity bill for a “regular-sized” home in the US ranges from as low as $80, to as high as $158, depending on the state you live in. Many tiny home owners choose to harness the free power of the sun by having solar panels installed and a battery bank, charged by those panels, to run their homes. The initial cost of the solar panels can be daunting, but thanks to the Federal solar tax credit you can deduct 30% of your systems cost until the end of 2019, and 26% in 2020. Another bonus? One less bill to remember to pay!
In addition, living in a tiny space means tiny (and fewer) appliances and only a couple hundred square feet to heat and cool. If you choose to use gas in your tiny home for these comforts, it only makes sense that your monthly bill is still going to be significantly lower than living in a larger space. All said, the average tiny homeowner only spends $40-$100 a month on utility bills.
Lower Maintenance Costs. It’s simple: tiny spaces = tiny fixes. Things wear out and break with usage and the passage of time, and tiny homes are not immune to this. However, repairs and required maintenance on tiny homes usually cost less than those of its larger, full-sized cousin. In addition, there are simply fewer items that can break, and less material required for even the most major repairs.
Fewer Non-Essential Purchases. Why is it that humans have an innate desire to crave empty space, only to turn around and fill it up with stuff? Maybe it’s some kind of psychological trickery that causes this, or maybe it’s the result of a society that tells us we NEED the latest and greatest. Not to get all metaphysical, but living in a tiny home will definitely help you separate your needs from your wants.
You’ll spend so much less money on material possessions because you simply won’t have room for anything that isn’t multi-purpose or essential to daily living. This might seem like an insignificant way to save money, but we challenge you to go back and look at last month’s credit card or bank statement – how many non-essential purchases did you make? What else could you have put that money towards? What constitutes an essential purchase will always vary from person to person, but choosing to live the tiny home lifestyle will definitely hone your view of what’s really necessary and important for daily living.
With the average American spending at least 30% of their monthly income on housing alone, it can seem like the norm to be a slave to this financial burden. But it doesn’t have to be your normal. Whether your financial goal is to retire early, to pay off student loans, or simply to have more money freed up for passions like travel, choosing to live in a tiny home can help you achieve that freedom.
