6 people on how living in a tiny house has changed their finances, from going debt-free to saving six figures

Tiny house living changes your finances for the better, according to six people who live in tiny houses.
Many were able to significantly reduce their housing costs, thereby doubling — or even tripling — their savings.
The extra money has brought them new opportunities to enrich their lives, they said — with experiences like traveling or starting a business.
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Life tends to gets smaller when joining the tiny-house movement.

There’s the 100 to 400 square feet of space — defined as the criteria for a tiny house — that makes up your home. There’s the downsizing of possessions so you can live comfortably. And there’s the overall minimalist lifestyle that comes with both of those things.

But the one thing that doesn’t shrink, according to many tiny house dwellers, is your bank account.

Business Insider talked to six people who went tiny about how their finances changed after making the move. Turns out, going tiny has made them richer in more ways than one.

Many have significantly cut the cost of their rent or mortgage and thus doubled their savings, which has yielded them more opportunities to take advantage of — like traveling or starting a new business.

Here’s how going tiny has changed people’s finances for the better.

Couple Bela and Spencer cut their housing costs in half when they downsized to a tiny home — and they earn income of it by turning their tiny house into a vacation rental.

Courtesy of Bela, thisxlife

Bela and Spencer of thisxlife in Boulder Creek, California, were renters before they bought their 300-square-foot tiny house in 2007.

After including rent for the land, depreciation on the home, and loan interest, they cut housing costs by half, down from $30,000 to less than $15,000, they told Business Insider. They did that without a down payment or any first-time homebuyer incentives.

Because most banks don’t consider tiny houses as "homes," many tiny-house buyers can’t take out a mortgage and instead pay for the home through personal loans, they said. They did just that, but will have paid off their tiny house in just seven years — or less.

They also convert their tiny house into a vacation rental while they travel, which allows them to make a little income on the side, they said. "We could not have afforded to set up such a luxurious rental if we had continued to rent or even bought a starter home — and renting our house for a handful of months a year covers the costs of ownership," they said.

"There’s no way we can really know the full financial picture of our tiny house, but it’s easy to say that it’s been a valuable investment," they said. "Much, much better than renting, as long as you can stomach the adventure!"

Bekah Taylor said her housing expenses are half to a third of what she would be paying if she lived in the city.

Courtesy of Bekah Taylor

Bekah Taylor of Tiny Little Life said that getting into tiny living can be complicated. There are parking restrictions, insurance can be expensive depending on where you live, and if you can’t finance your own home, it restricts the companies you can buy from. She and her husband Paul went to the bank and were offered the option to refinance their home or take out a personal loan with 14% interest rates.

They ended up self-financing and building their 250-square-foot tiny house, located in Portland, Oregon.

"We have amazing friends and family, who gave us a lot of free labor, which made the cost significantly less," Taylor told Business Insider.

She said their monthly housing expenses are half to a third of what most of their friends are paying for in the city. "It has allowed us the freedom to live where we want yet still do all the traveling we had hoped for," she said.

Couple Tim and Sam have cut back on unnecessary expenses because living in a tiny house has forced them to downsize.

Tiffany the Tiny Home

Tim and Sam of Tiffany the Tiny Home bought their 270-square-foot tiny house, which they live in in Florida. Downsizing for the move wasn’t "terribly hard to do," they previously told Business Insider.

"Besides being able to have a three- to four-year mortgage, which will give us an extra $1,000 a month back into our pockets, living tiny has changed our finances for the better," Tim told Business Insider.

He added: "Since we live in such a small space we think more about what we bring our home than we used to. That mindset alone will cut out a lot of unnecessary spending we used to do on a day-to-day basis. We evaluate what we buy a lot more carefully, which in turn ends up saving money from those ‘I need to have this’ moments. This allows us to invest back into our lives."

See the rest of the story at Business Insider

Source: Business Insider – hhoffower@businessinsider.com (Hillary Hoffower)