I will never get tired of watching the reactions of others experiencing a tiny house for the first time. The surprise at how “big” it feels, the awe of the creative design, the lightbulb that goes off when they realized, just maybe, they could live like this…
After showing my tiny house to thousands of people, I have gotten very accustomed to the countless questions that people have about the lifestyle and the logistics of going tiny. “How many square feet is this?” “Where is the TV?” “How many people can fit in here?” “How do you get electricity?” “Where do you park it?”
But the most common question of all is the infamous: “How much did you pay for it?”
When I tell people how much I paid for my tiny house, they always have one of two reactions:
1. “Wow… That’s it? That’s what I paid for my car! That’s less than 3 years of renting an apartment. I pay that in taxes in only a few years. I could pay that in cash!” etc. etc.
2. “You paid HOW MUCH?! Are you crazy????”
Uhh… yeah, sometimes the latter can make things a little bit awkward. It really blows my mind , though, that these are the sole reactions that I get when I divulge my financial investment in the tiny house. Two very opposite ends of the spectrum. So, before you choose your side, I would like to explain to the internet as a whole my take on the financial advantages of choosing to go tiny.
Today, the average price of buying a tiny house is around $23,000. Because of the low cost, 68% of all tiny house owners are able to pay for their homes in cash and thus, are not tied down to a mortgage. This makes sense, then, that the majority of tiny house owners have more money in their savings accounts than the average American and 89% have less credit card debt. I’m sure that these statistics are at least somewhat intriguing to you, but to keep it simple I will just explain my top 5 financial reasons to consider going tiny.
–Pay your tiny house off in cash: Imagine actually owning your own residence and not having to pay off a 15 or 30 year mortgage. No more worrying about paying most of your salary towards your mortgage and the other expenses related to a regular sized house.
–Decluttering forces you to think before you buy: No wonder tiny house owners have less credit card debt… Every time I buy something I have to ask myself what purpose it serves for me. It has to add value to my life in order to make it into my house. Gone are the days that I buy things without a purpose. SWEET FREEDOM FROM EXCESSIVE CONSUMERISM.
–Save on utilities, maintenance, and taxes: Living in a small space means less (and something even no) monthly expenses, maintenance is minimal and usually very inexpensive, and in some areas tiny house owners pay no taxes related to their residence. Interested in how I live completely off grid and thus have eliminated virtually all monthly expenses related to my house? Send me an email at email@example.com
–Save more money for retirement: Many of us spend roughly 30% or more of our income on housing and a much smaller percentage on savings or retirement. Imagine being able to flip flop that statistic and put 30% of your income away for retirement or other investments… What could you do with all of that extra money?
–Use your tiny house as an investment: A tiny house can be used as a vacation rental, coffee shop, ice cream truck, Air B&B rental… anything you can imagine is possible in these tiny dwellings. Plus, it certainly is not hard to make back that initial investment, which averages around $23,000. Being your own boss doesn’t sound so bad, now does it?
Now this is only my opinion, but don’t just take MY word for it. Through my research I have found, fascinatingly enough, that the two groups of people who are fueling the tiny house movement are:
- Millennials: This generation has found that the crippling debt they come out of college with puts traditional housing out of reach. They also have begun to realize that spending money on experiences, travel, and making memories is far more satisfying than buying materialistic things. Even more so, Millennials have an insatiable desire to be free and that means not being tied down literally or figuratively. What better than a house that you can pay off in cash (hence not being tied down by a mortgage) AND that you can pick up and move anywhere (hence not being tied down to a location)?
- Baby boomers: This generation has started to search for affordable housing options as they downsize after their children have left the nest. Along with looking at affordability, they also consider the maintenance needed for their dwelling. It only makes sense that a smaller space would require less maintenance. But, of course, baby boomers do not want to give up the convenience they have become accustomed to in their larger homes. Combine these desires with their less than luxurious retirement savings and tiny houses seem to solve all of their concerns.
These two groups could not more divided on many topics, but when it comes to tiny houses they seem to agree: what you gain from living tiny is worth the investment.
Do you think that buying a tiny house is a good investment? Do you think that it is worth the price tag? What I have learned is that dollar value doesn’t mean much; it is not a universal thing; it is all about perspective. What something is worth depends on an individual’s perception of its value, so obviously something’s worth can vary greatly from person to person. I do not want you to think there is a right or wrong answer here… As tiny house owners, we value the things (tangible and intangible) that we gain from living tiny enough to make the financial investment. For you, it may not be worth it and that’s okay.
I’d love to hear your opinion in the comments below. Remember, this blog is ABOUT me, but FOR you! So… What do you think???