The American Dream has always been based on the idea of homeownership and that bigger is better. If you need confirmation of this fact, then look no further than last year’s statistics that show how the average American home is 2,400 square feet. It averaged 2,000 during the housing boom years in the early 2000s and even less if you go back in history.
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. Some people just have a desire to live a simpler life. Who could fault them? Even if you’re content to keep living the American Dream, consider these 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. They are also 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, but they also 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. Easier to Clean
If a small home is free of clutter and organized, it’s quite simple to clean. There’s simply less space and stuff to organize and tidy up.
I have a decently sized kitchen with plenty of prep space, but it does take quite a bit of time to maintain and clean up. A smaller counter space would force me to clean more frequently and to keep the counters free from clutter. I sometimes envy the people who choose to have a smaller home because cleaning up would be a breeze!
3. 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.
4. 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.
5. You’ll Tend to Stay Outdoors More Often
People who stay home all the time are usually those with a huge house. When you have a tiny house, you will naturally spend more time outside and that means more sun exposure, more fresh air, and more exercise!
6. Closer to Family
The size of a tiny home will force you to put any children you have in the same area. I remember sharing a room with my sister for seven years and hating it, but it was probably better for our relationship in the long run. When I had my own room as a pre-teen, it was easy to shut myself away from the family. A smaller home can possibly help a family bond better.
7. Impacting Others and the Economy
After Hurricane Katrina, tiny homes became a popular construction strategy for relief organizations that 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?
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Living in a tiny house helps to save your money and you get more time to spend with your family members. Tiny house is easy to clean as compared to big house. Apart from this there are various advantages of living in a tiny house.
The biggest disadvantage to tiny houses is there is no way to know if they will appreciate in value, like a conventional house, or depreciate like a mobile home. It’s a fad right now and there is no reliable market history. They still cost a considerable amount to build and if they depreciate to zero over time then that might offset all the positives.
A tiny house might not be suitable for large families, but when it comes to a single person or even a couple this is really a convenient solution. And wasting your precious health, time and energy just to pay your bills and mortgage on a large house is close to insanity. Our time here on earth is very limited, so it would be better if we spend it more wisely on things that really matter.
My wife and I have lived in a tiny home (rv) for nearly two decades and love it.
A very good article. I suppose the size of the house would depend on where you live in the world since housing prices can be very different depending on where you live in the world.
But the idea is spot on, we don’t need a huge house and usually a smaller house will mean a smaller mortgage and maintenance costs just as the article suggests. It’s also true that there is the freedom to spend or put money in the IRA as the article suggests or other investments to make financial freedom a little more realistic.
Here is Australia where prices are going up those with big houses (in good locations) have seen great capital gains. It has be observed that people here demand bigger houses and are willing to pay more for them. But I can understand that if you are not living in one of these high demand areas you will not get those benefits yet you will have the costs. I also like the idea of renting out parts of your property if you have a big house and using the income to pay down your mortgage. Kind of like an investment property.
Tiny houses would be great if you could actually put them somewhere legally. Most municipalities will not allow them and even if you have your own property, legislation discourages them if they don’t outright forbid them.
Many cities specify a minimum size home that is about 4 times bigger than anything I would need or want.
Good thoughts in this article! I honestly just prefer smaller houses – bigger the house, the more hassle to clean or repair. Of course, no matter what size house you get, it’s an investment and you should love the house you get!
Like the idea. I operate a bed and breakfast but have plan “b” in mind and the size will be about 600 feet for the house. I am now “right sizing” in preparation for that move and am pleased that there will be much less work involved. Freedom!
I absolutely agree with you! These reasons definitely played a part in my decision to go tiny and I couldn’t be happier!!! Thanks for sharing 😀
We have a big-ish house now, and we love it, enjoy working on it, and have 3 kids, so it’s somewhat more justified, but the reachable goal is to have the 25 year mortgage paid off in the next decade (or sooner if we are very good!) and then just the very moment that the kids are independent (some way off admittedly, the youngest is not yet 2), we will sell it and buy somewhere with 2 bedrooms, a small outside area and as few committed outgoings as possible. Yes, we would like it to be decent in terms of space and storage, but there is no need to stay in a huge family home when you’re not raising a family… and so many older people do ”because we love our house” as they get older and older and less and less able to do or afford the maintenance and the thing devalues. Life is for living, not being obsessed with bricks and mortar!
Hi,
I haven’t gone through the comments or research this topic after reading the post but my quick comments are as follows. I grew up in a metropolitan city in southeast Asian country. We lived in a tiny apartment, about 350 sq ft and later my teenage years in 550 sq ft. We were 3 siblings. My conclusion is that it is no way of living! Unhygienic physically, emotionally and spiritually. As I was growing, I resented of not being left alone. I always aspired for more room, separate rooms for different activities, etc. Yes, now I live in US and have a larger home. Wish it were cheaper but reducing rooms may not be attractive to me for some more time. May be never. Again, these are my quick comments. I made one change though. This is my second home and I insisted it being cozy and compact but more rooms. My last home had 2-storied family room. Looking at the model home, it was pretty but living in it was irritating. It was like a hotel foyer. Anyway, my 2 cents.
Or an alternative is to buy a huge house like I did and rent out rooms to make your mortgage tiny 🙂
I would also say that it totally makes sense to buy a house that is less than you can afford.
However, I do like the idea of having no mortgage like the tiny house dwellers. Soon enough!!!
The Tiny Home movement is gradually increasing and definitely gaining interest among consumers. Because you can save so much and be free of debt, yet live comfortably–what is better than that? Great article!