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Thinking tiny could put more cash in your pocket


Practical money matters by Nathaniel Sillin

YOU MIGHT not have seen one in your neighborhood yet but the tiny-house phenomenon has spread across the country. For some, the move is driven by a desire to downsize and live a minimalistic lifestyle. Others see it as a way to decrease their impact on the environment.
Economics are often a large part of the equation. Buying and maintaining a tiny home is relatively inexpensive and the savings can help many people on their path towards financial freedom.
Tiny-home living – often shortened to tiny living – isn’t for everyone, however. It requires ingenuity and resourcefulness, so we can all learn something from folks who choose the tiny lifestyle.
Debt. Freedom from debt is priceless. Living within one’s means is a foundational belief to many within the tiny-living community. Between labor and materials, a tiny home could cost about $20,000 to $60,000 to build. By contrast, the US census bureau says the median national sale price for a new home in December 2016 was $322,500.
The relatively low price of a tiny home gives you a chance to own one without having a mortgage that’ll take three decades to pay off. The further savings in the form of lower utility, tax and maintenance bills also make it easier to pay off non-housing debts, such as student loans, and live a debt-free life.
That being said, you can live in a larger home and still look for ways to lower your monthly expenses and fight lifestyle inflation – the habit of spending more as you make more money.
A common tip is to allocate half of your next raise or bonus to your savings or use it to pay down debts. But why not challenge yourself and use your entire raise or bonus to build your net worth?
De-clutter. Make room for things that are important. Moving into a tiny home can require major downsizing but some view that as a feature rather than a disadvantage. It’s not about getting rid of things that aren’t absolutely necessary – after all, “unnecessary” decorations sometimes turn a house into a home. Rather, from furniture to clothing, you have to decide what’s important to you and leave the rest behind.
It’s easy to fill a large home with clutter and then attempt to clean every spring. Perhaps a better approach would be to take a tiny-home mindset to the store with you. Don’t bog yourself down by asking yourself if you can live without something – you can live without many things. Instead, try to spend money only on things that add meaning and joy to your life.
Space. You have more space than meets the eye. Watch a tour of a tiny home and you’ll see that great organization skills and original storage ideas are a must. Tables turn into benches and chairs double as shelves – everything seems to have at least two purposes.
How could a little imagination transform your home? Might a new shelving system and selling items that aren’t important to you anymore give you more room? Inventiveness and thinking outside the box are keys to making the most of what you have.
Purchases. High-quality products are worth the investment. Many tiny-home owners are keenly aware of the waste they’re putting back into
the world. Some even choose to live in a tiny home because it’ll reduce their ecological footprint. The savings that come from tiny living and this approach to life often lead to investments in long-lasting products rather than cheaper alternatives.
Quality over quantity is certainly a worthwhile mentality to adopt. Put it into practice by looking for companies that offer lifetime warranties on their products. You might be surprised to find that, from socks to power tools, there are dozens of manufacturers that uphold this promise.
Benefits. How will you make use of these lessons? Simple living and conscious buying aren’t exclusive traits of tiny-home owners. Regardless of the size of your home, you might find that incorporating these principles and practices saves you time and money – two valuable resources that should never be wasted.
Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances.

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