Hey Tiny House squad! We recently met a wonderful woman, Brynn, who has made the jump to go tiny with her family of four. After getting to know one another, we concluded that we just had to have her experiences and lessons, triumphs and tribulations documented on her tiny house journey. As such, we have a four part series of her thoughts and experience going tiny!
Here is Brynn's 4th piece on her tiny house experience, 3 Things We've Noticed Since Paying Off Debt. If you've ever wondered about how going tiny can help you pay off debt, this is the piece for you!
When we decided to minimize, simplify, and downsize to tiny home living a year ago, financial freedom was one of our driving motivators. Ours is a hard-working family who still lived paycheck to paycheck due to circumstances like medical bills and living in areas of high poverty and low employment (therefore, the living wage was well below the national average).
Since we have sold our traditional house and gone tiny, we have been able to pay off all existing debt, with the exception of one medical bill. We have also been able to build a savings that is allowing us to both travel this summer for the first time since having kids, and to experience the freedom that comes without worrying when the next payday will arrive.
So, here is a list of the top three things we are learning as we’ve downsized to tiny life and paid off debt.
Watching Cash Leave your Hand Is Physically Painful
Since being budget conscious by choice instead of necessity, our perspective has changed. It is pretty amazing what kind of turnaround happens when you pay cash for all things outside of automatic online bill payments.
When I have to physically watch Stacy at the gas station take the $10 bill out of my icy cold grip in exchange for a soda and a bag of Sun Chips, friends, I am seriously reconsidering my snack choices! Paying cash helps to keep tight control of unnecessary expenditures as well as allows you the freedom to save up money without having it show up in you account to be spent on things like groceries or gas.
Beating Your Budget Becomes Addicting
Once you get in the habit of creating a monthly budget (it takes a while, just like any habit), you will be able to track how much money you have coming in and how much you have going out in various categories each month.
Maybe it is because I am competitive, but this has driven myself and my husband to compete in who can save the most/spend the least, as well as trying to spend less each month in certain expense categories, such as couponing for groceries and buying in bulk to save.
Mo’ Money Doesn’t Have To Equal More Spending
When you live tiny, you generally keep what you need when you downsize from your traditional house or apartment. This means that, unlike moving into a new traditionally built home, new tiny home owners generally don’t need to go buy a bunch of ‘stuff’.
However, if things come up or something that you want goes on sale, you should have a miscellaneous budget item or cash savings. This should be a built in part of your monthly financial plan.
So, let’s say you decided to save money in your tiny house build by using a handmade composting toilet to start and now you are ready to upgrade to a Nature’s Head Composting Toilet. If you haven’t saved the $975 to buy it, you have to wait. This is great monetary modeling if you have kids, as well!