When Jeremy Weaver and his wife graduated from school, they had a large amount of student loans to repay.
They wanted to stop wasting money on rent and buy a home, but their student loan debt held them back significantly. The only homes they could qualify for were extreme fixer-uppers.
However, both had been followers of the tiny house movement and began to give building one themselves serious consideration.
Tiny homes offer residents financial freedom
Ultimately, the Weavers purchased inexpensive land and built a 276 square foot house (pictured above).
The show Tiny House Nation even profiled their experience in an episode. Their home gave them the financial freedom they otherwise would not have enjoyed.
“The overriding reason my wife and I decided to ‘go tiny’ was because we were both recent Master’s graduates with substantial student loans and we wanted to live below our means,” says Weaver.
“One, so we could pay down our student debt quickly and two, so we could live the lifestyle we chose rather than letting a mortgage dictate a lifestyle to us,” Weaver explains.
With their new home, the Weavers have dramatically reduced their household expenses. And for such a tiny home, their electricity and heating bills are much smaller too.
“If we had lived in a traditional style home or rented an apartment, it would have been borderline impossible to keep up with our loan payments,” says Weaver. “Going tiny allowed us to accelerate payments while pursuing our dreams.”
They put most of the extra money they saved towards paying their loans. However, it also gave the Weavers the ability to launch their own business. They started Wind River Tiny Homes, a company devoted to helping others downsize and build smaller homes.
What is the tiny house movement?
The average American home in 2013 was 2,600 square feet, according to the U.S. Census Bureau.
That’s a huge leap from the 1950’s, when the average home was just 983 square feet, according to the National Association of Home Builders. And, families were bigger back then.
The cost of a mortgage for such a large house, as well as utilities and furnishing the space, can be substantial.
By contrast, the tiny house movement’s mantra is downsizing your life to give yourself more financial freedom. Houses are typically under 400 square feet and provide adequate shelter for entire families.
The reduced space means you make do with fewer possessions. And, utility bills are a fraction of what they’d be for a traditional home.
The benefits of going small
Changing your housing situation from a regular-sized house or apartment to a tiny home may sound drastic. But, you could reap huge financial rewards.
By cutting your expenses down, you can make do with less income. Many tiny homeowners downsize so they can launch their own business or only work part of the year. That gives them more time and flexibility to travel or pursue their passions.
Because they don’t have many demands on their bank accounts, tiny homeowners still can contribute to retirement savings on a much smaller income.
Other small house owners use their increase in savings to accelerate debt payments. The money they would have spent on a mortgage or hefty rental payment can now be used to pay off student loans or credit card debt instead.
In fact, 89 percent of tiny house owners have less credit card debt than the average American, according to iTrac. What’s more, 65 percent have no credit card debt at all.
What to consider before building a tiny home
Before spending the money to purchase land or supplies to build a tiny home, consider whether tiny living is really for you.
- Try it out: Going small can be a transition. Tiny House Vacations is a site that lists small homes available for rent for short stays all over the world. You can test out the tiny house movement for yourself.
- Identify where the house will rest: One of the biggest obstacles facing tiny house owners is where to put the house. Codes and restrictions can vary by state and county, so check before investing in a home.
- Build to standard: Building standards exist for a reason. Despite being small, your home still needs to withstand heavy rains, the wind, or snow. Find out what codes you’ll need to follow and build accordingly.
- Reflect on your goals: If your goal is to save money and downsize, tiny home living may be for you. But if you’re weighed down by debt, consider alternatives like refinancing your student loans or consolidating your credit cards.
Joining the tiny house movement is a major lifestyle change and commitment. So before going forward with your plans to move into a tiny home, make sure you are doing it for the best financial reasons.