Can Tiny House Living Actually Save You Money?

By Brittany Lyte on 14 January 2016 5 comments

The hottest housing trend out there right now is the tiny home. No doubt, you've heard of it. From mini barns to micro-apartments, whole communities of folks living large in small spaces are sprouting up everywhere.

But can tiny house living actually save you money? Read on for our roundup of the financial pros and cons of the ultra-downsizing revolution.

Smaller Means Cheaper — Well, Sort Of

Let's state the obvious: A small home is generally less expensive than a McMansion. But when it comes to tiny homes, that's only partially true.

The average do-it-yourself tiny home costs about $23,000, while the average U.S. home price is up around $273,000. But square foot for square foot, tiny homes are actually tremendously expensive. They generally cost between $200–$400 per square foot, which is far more than the $77 average for a normal-sized home. And, notably, normal-sized homes include land while tiny homes generally do not. Tiny homeowners have the added burden of negotiating and calculating a land purchase or lease into their overhead cost.

All in all, a tiny home can save you heaps of money on a mortgage, but you'll pay a comparatively high price for the small square footage you've got.

Buying in Bulk Is No Longer Appealing

Costco, Sam's Club, and BJ's Wholesale Club members know you can save a slew of money through bulk shopping. But buying in bulk isn't very feasible when you're living in a tiny home. The obvious lack of storage pretty much throws a wrench in that plan. You'll probably also need to make more frequent trips to the grocery store — a burden on your time and car mileage — since your pantry and refrigerator size will be smaller. (See also: 9 Ways You Are Sabotaging Your Weekly Grocery Budget)

You Can Bank on It

Tiny house living is a proven way to bulk up your savings. That's because 68% of those who own a tiny home don't have a mortgage. All told, 55% of tiny house owners have more savings than the average American, with a median of $10,972 in the bank. And 89% of tiny house owners have less credit card debt.

The Laundromat Will Cost You

The typical tiny home doesn't have room for a washing machine. That likely means you'll be paying frequent visits to the laundromat, spending your time as well as your money to feed the machines and, if you own a car, drive yourself there.

Low Energy Expenses

Tiny homes are big on efficiencies of all sorts, and that includes energy. The very nature of living in a small space is economical in terms of heating and cooling. And the upside of not having enough room for a washing machine is that you're saving on energy expenses.

No Dinner Parties

You can't comfortably host a dinner party in your tiny home — there's simply not enough space. You probably won't have folks over for coffee very often for that same reason. Without an in-home gathering space, you'll likely be inclined to go out more than you otherwise might. And that means you'll be spending more money. When you live in a tiny home, coffee dates and cafe lunches as a means of catching up with friends are pretty darn appealing.

Add It All Up...

Tiny house living will undoubtedly save you money, but it will also cost you in small ways. Some of the tried and true tricks for saving simply won't work after you downsize. To reap the maximum cost-efficient benefits of tiny house living, you've got to be willing to shed and adjust some of your frugal behaviors.

Have you tried living in a tiny home? How'd it add up?

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Christie

It would be interesting, but there are things that would be inconvenient, like the laundry situation. You also would have to live in an area where outdoor living is a year-round affair. When you live where it snows for up to 5 months a year, being snowbound for months at a time in a tiny house is not the way for me to stay sane!

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Olivia

Having lived in a Brooklyn efficiency, I have a different take on the tiny house phenom.

There's a vast variety of small homes out there. In all sizes and configurations. Some really small houses have washer dryer combos. Doing laundry at home isn't out of the question. It's the same hurdle most NYC apartment dwellers encounter.

There are workarounds for entertaining. Outdoors is a viable option for some. If you have a large group, you can always rent a space or eat out. Most of us don't host large weekly dinner parties anyway, so large entertainment spaces really aren't critical to our day to day living. As many small houses sport a larger all purpose room they can accommodate 4-6 people. Coffee or dinner with a few friends is not a problem.

Stockpiling is still an option, if it's that important to you. Try looking at the Tiny House Newsletter or even apartment magazines for ideas. People have come up with nifty solutions. Like compartments under floorboards, staircases doubling as dressers, or seating cubes with storage inside.

The biggest consideration in small house ownership seems to be zoning. Where to put it? Are there minimum size requirements in a particular area? Do you have to be hooked up to utilities? Can you live in them, (the ones on wheels), year round? That kind of stuff. Some trailer courts and RV sites are game. Some areas allow "accessory" dwellings on larger properties with bigger houses already on them.

The other difficulty is attachment to furniture and stuff. How much do I want or need? If I really like my stuff and have a bunch of it, small house living isn't for me.

The third is dealing with your own and other's perceptions. It's "OK" to take friends to a 250 square foot apartment, but not a house.

Like everything else in life, we choose what's most important to us.

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Pam

I agree with Olivia. It is possible to have a washer/dryer in a tiny home and you can certainly entertain. They have more room than you can imagine due to well placed stairs and other areas for storage and can appear quite spacious. Tiny house dwellers are very creative on storage. One must rid themselves of "stuff" & material objects. Yes, you can keep a few mementos, but you find you don't "need" or "miss" the stuff you once thought you needed to have a home. You also don't "need" the closets full of clothes/shoes you never wear. I for one love it and wouldn't go back to my other life if you paid me. I live where it gets a good amount of snow and find it makes my home more comfy. The carbon footprint you have leaves less impact on the environment. Things ARE much less expensive in a tiny home.

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Guest

Where do you live? And is it your own land?

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Max Gera

The biggest rip-off ever: Training Americans to pay more and more for less and less!