The American Dream has always been based around the ideal of home ownership, with the idea that bigger is better. In fact, last year’s statistics show that the average American home is 2,600 square feet, up from 2,400 during the housing boom years.
But even though average home sizes are increasing, there’s a small but growing trend in the opposite direction: tiny houses. Documentaries on tiny house dwellers highlight the incredible contrast between the average American home and the average tiny home, which is less than 500 square feet.
Although tiny homes still account for less than 1% of real estate sales, their appeal is increasing among many people who are tired of upside-down mortgages, the cost and time consumption of accumulating and maintaining 2,600 square feet of possessions, and have a desire to live a simpler life.
Even if you’re content to keep living the American Dream, consider these four financial advantages of living in a tiny home.
1. Freedom from Debt
Some statistics indicate that as many as 65% of tiny home dwellers have no credit card debt, whatsoever. Furthermore, 68% don’t have a mortgage payment. At an average of $23,000, self-built tiny homes are cheaper (and nicer) than traditional housing options in that price range, and are designed to last as long as full-size houses.
Not only do tiny houses themselves cost less to build or purchase, since storage space is minimal, they provide freedom from excess consumerism (the pursuit of which often plunges people into debt). Those who choose to live in tiny homes must choose their possessions carefully, a lifestyle that naturally results in less spending, less accumulation of stuff, and consequently, less debt.
Not only this, but the cost of storing, shopping for, and replacing items drops significantly, freeing up the household budget as well as the schedule.
2. Lower Overhead Expenses
With under 500 square feet of space to heat or cool, utility bills commonly run under $20. Add to this the reduction of property taxes, large appliances, other equipment, and home repair expenses, and your household budget looks even better.
Even the grocery bill goes down — with less storage space, a tiny home discourages hoarding or excess accumulation of food and consumables. Your entire overhead decreases when you live in a tiny house.
3. Freedom to Spend
Wait, didn’t I just mention that tiny homes discouraged consumerism? Yes, but with more leeway in the budget due to less debt and lower expenses, there will be more freedom to spend and save in ways you want to, rather than ways you have to.
For instance, some retirees may find it beneficial to have more money to save for their rising healthcare costs or to invest more money into their IRA. Younger people who want to travel may likewise have the funds to do so without going into debt.
4. Impacting Others and the Economy
After Hurricane Katrina, tiny homes became a popular construction strategy for relief organizations who found them to be more durable than trailers. In the last decade, many nonprofit organizations have been increasingly utilizing them as a cost-efficient way to fight homelessness and the need for low-income housing.
Even though many homeowners are worried about the impact of tiny homes on their property values or taxes, they may, in fact, boost the economy by leading to more land development, and increase current property values because of their effect on density.
Advantages to Living in a Tiny House
Regardless of your personal preferences or space needs, the cost-efficiency and other advantages of tiny houses can’t be denied.
Considering this, it’s no wonder more people are turning away from “The American Dream”, which has sadly led to oppressive consumer debt, and deciding to live large in a whole new way.
What do you think of the Tiny House movement? Does living smaller allow you to live larger in life?