Can Tiny House Living Actually Save You Money?
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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