The top reason people choose to live in a tiny house is financial freedom. Yes, tiny house residents have other reasons: minimalism, sustainability, adventure, and more. But the top reason, and most uniting factor among the diverse tiny house demographic, is financial freedom.
But with many things money-related, it’s not a problem unless you don’t have it. Such is the case with tiny houses.
A recent poll I conducted showed that money was the top challenge that prevented people from going tiny. And this is no surprise; a tiny house is often a way to replace a mortgage by spending a large lump sum all at once.
Yet it is a tricky situation because many of the people that need a tiny house for financial reasons don’t have the financial stability to buy or even build a tiny house.
Considering you need land, materials, tools, labor (plumbers and electricians at least), furniture, a trailer or a foundation, it is no surprise that tiny houses are out of reach for many of the propel who need it most.
So, if you’re in this situation, you may be wondering, what should I do? Should I give up? Is there a way to overcome this challenge?
The short answer is yes. But it shouldn’t come as a surprise that this isn’t easy. There are four ways to make this work.
1. Time
As a general rule, time and money can be interchanged. If you want to achieve anything, you can do it without a lot of money if you take your time. This apples to building a business, saving a nest egg for retirement, or buying a home. If you want to do these things quickly, you can, it just requires money. (Bonus topic: financing a tiny house)
A good example of the use of time is a tiny house resident I spoke to who created a 100% recycled tiny house. He built his tiny house using repurposed wood, repurposed windows, repurposed everything.
It took him two years to do it, but he did it for under $10,000. That is incredibly cheap for building your own home. Just to put that into perspective, if you broke $10,000 into monthly payments over 30 years, you would pay $27 per month.
This approach takes time and patience but it is the most tried and true way to make a tiny house reality for yourself. You can start this process today with no money, and what do you have to lose?
2. Temporary Sacrifice
This option is one that is not often talked about in the tiny house community but certainly should be. If a tiny house is your ticket to financial freedom but you don’t find yourself able to afford it, then you need to get more saved up.
Let’s say you have the following monthly income: $1000.
And let’s say you have the following monthly expenses:
$400 in rent
$200 in groceries
$100 in gas
$100 in healthcare
$100 in utilities
$100 in emergency fund
That leaves you saving $0 per month. If we take a look at our sample income and expenses, then we know we need to reduce something.
The biggest item for most (and in our sample) is rent. So we need to reduce rent. But how?
Here is where the temporary sacrifice comes in. If you had $400 removed from your expenses every month, then you would save an extra $4800 per year. Within two years and one month, you would have $10,000.
Ways you can sacrifice to save all of that rent money:
Move-in with a relative for a time or a rotation of relatives
Live in a temporary dwelling (like a yurt or trailer or converted garage) on a relative’s property for a time
Live nomadic out of your vehicle
Find a job that includes housing
Live off-grid for a time
Ways you can sacrifice a bit less but still save some rent money:
get a roommate
Airbnb or Vrbo your space and live with a relative for a short period of time
Airbnb or Vrbo a room in your space while you live there
Negotiate with your landlord by offering to help with things that require labor, like yard work or maintenance
The idea of sacrifice applies beyond the rent too. Things like utilities and groceries can be reduced as well:
buy food and household items in bulk. You can even try to borrow someone’s Costco or Sam’s club card.
temporarily reduce the food you eat but don’t need (things like snacks or nicer cuts of meat)
buy blankets and turn down the heat in your space
be super aggressive about saving electricity by turning off the lights and unplugging unused appliances
Save water by turning off the faucet and taking shorter showers.
If you have a draft or poor insulation, negotiate a fix with your landlord, do the work to fix it, then have the landlord deduct the cost of the materials from the rent
Pickup a second job for the short term
Altogether this list isn’t exhaustive. The idea is that you can sacrifice a lot for saving a few bucks here and there. Remember, a dollar per day is $365 in a year. Every bit counts so save wherever you can and accept that short-term sacrifice for longterm stability.
3. Risk
This option is a controversial one and thus isn’t discussed openly. Frankly, I would never recommend it to someone, but it is important to think about your situation, and if you’re going to take on risk do it in a smart way.
In the scheme of tiny houses, a bad way to take risk is buying land and a tiny house with your savings, assuming you can put a tiny house on it, then living on it around the law hoping you don’t get condemned or fined one day. Don’t do this, it happens all the time and just because it is horrific doesn’t mean it can’t happen.
However, there is a good way to take risk, and that is by living in a way—again short term—that will not result in financial ruin for you.
You can live on someone’s land with their permission, or live out of sight out of mind, all without spending money committing to the land or the structure. In other words, if you lost your tent or you had to leave the land, you’d be ok.
Again I only bring this up because it happens and I want you to think about it critically. It is still not recommended but you might find it your only option. If it is, do it in a way that you will not lose your money that should be going toward your savings for a tiny house, in the event you need to leave wherever you’re staying.
4. Ask for help
Many people try to go the tiny house route by themselves, and this is doable but a tough and lonely route. Asking for help from loved ones and neighbors is not only more likely to reduce cost, but it’ll also be more rewarding.
By asking for help, you let people know that you have a goal, and most people are very happy to help each other when asked.
Asking for help comes in three distinct forms: money, skill, material.
Money: this is tricky and often hurts your pride, but there are ways to go about it that are more dignified than simply asking for money from someone.
If you can’t get a loan from a bank, you can opt for a loan from someone who knows you’re good for it.
You could also go with owner financing for land or a tiny house, where you pay for the property in monthly installments rather than as a lump sum.
You could even get creative by trying to crowdsource funding from the community. If you have a particularly inspiring story that people would care to know about, you may be able to raise money from the community or through online communities.
Skill: finding someone with skills is massively helpful. Maybe you have a family member who is handy or trained as a plumber or electrician. Maybe you have teen neighbors who have no particular skill but who are hard-working and strong.
Maybe you can even get a day where your neighborhood or community bands together and helps you build your house.
This specific physical skill or brute force labor is key to making the tiny house dream a success. People want to help you with their hands.
Beyond the physical, people also want to help you with their minds and experience. Join Facebook communities, build connections, and ask for help online. Many people have the advice to give and contacts to connect you with.
Material: this option is all about resourcefulness.
Don’t buy a circular saw, borrow it from your neighbor.
Don’t buy windows from a department store, ask construction companies for their quality rejects.
Don’t buy lumber from Home Depot, ask the local lumber yard for their bulk lumber at a major discount.
The list goes on. Just ask yourself, “what item do I need and how can I get it as cheap as humanly possible?”
Well that about sums it up. Be patient, make sacrifices, consider what risk you can take, and ask for help. Do these things and the tiny house life is within reach even if you’re without money. It will be hard, but it will be worth it when you’re not struggling to make ends meet.
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