Personal Finance

Live Tiny, Save Big

Live Tiny, Save Big
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By the time Michelle Jackson hit 34, she was ready to buy her first home but didn’t want to spend a fortune. So she purchased a garden-level 495-square-foot (46-square-metre) one-bedroom apartment in Colorado in the US. Her friends gave her a hard time over her choice.

“I was teased a lot because I bought so conservatively,” said Jackson, now 42. “Some of my friends didn’t understand why I wanted such a small place. There was some peer pressure that I didn’t expect.”

But, a smaller home — and the smaller bills that come with it — gave Jackson a lot of freedom. “Because my home is so inexpensive, I felt comfortable leaving my job of 10 years and now am working for myself,” Jackson said. “I feel thankful every day when I think about the life that I have because of this choice.”

Choosing a smaller property might seem like an odd trend at a time when the median size of a new single-family home sold in the US is 2,506-square-feet (233-square-metres). In Australia, the average, new, free-standing house is now 243-square-metres (2,616-square-feet). In Denmark, the average home is 137-square-metres (1,475-square-feet). Many people are buying more space, not less.

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But a movement towards minimalism has also begun to take hold. Smaller living, in spaces less than 500-square-feet (46-square-metres), and tiny living, in spaces under 350-square-feet (33-square-metres), have begun to draw interest. In a typical tiny house, the owner enjoys a compact living space akin to being in a campervan, with a small living space, kitchen, and bath on the first floor and a loft space for use as a bedroom, accessible via ladder or skinny staircase.

There are certainly advantages: Lower expenses, less impact on the environment and not as much cleaning and maintenance. But there are things to consider before taking the tiny home plunge.  

What it will take: For starters, you will need to research restrictions on tiny houses and seek out developments specifically made to have smaller-than-normal living spaces. Then, you must get rid of a lot of your personal belongings. The trade-off for a smaller mortgage is typically a lack of storage and — if you aren’t living by yourself — less privacy.

How long you need to prepare: Living in a tiny house often means building one, which could take as little as three months if you’re having it built or several years if you’re building it yourself. If you’re buying a tiny home or apartment, you’ll need at least six months to downsize your possessions.

Do it now: Determine if it’s right for you. The tiny living lifestyle isn’t for everyone. “Before living small, you should understand what is important to you and your lifestyle,” said Mark Burton, who owns Tiny House UK, a company that designs and builds micro homes. If entertaining and spreading out is important, smaller living might not be for you.

“I think it’s ideally suited to Millennials who are just starting a career, who are either single or part of a couple, or retirees,” said Elaine Walker, tiny house enthusiast and founder of “I know some families do have tiny houses, but to me it seems a little cramped. I feel like a family needs more space than that.”

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Do a trial run. Airbnb makes it possible to stay in tiny houses in the US, France, Austria, Italy, South Africa, Sweden and even Thailand. There’s also a tiny house hotel in Oregon in the US. “That’s a great way to make sure you aren’t surprised,” Walker said. “And just the experience of living in a tiny space can help you decide what you do and don’t like. Try it before you fully commit.”

Check with local authorities. If you’re thinking of building a home with a very small footprint, make sure you’re within local zoning and building codes before embarking. In many areas a really tiny house is considered an accessory dwelling unit and can’t be built on its own plot of land or on someone else’s without meeting a boatload of requirements. “Tiny houses do not fall into any one category, as they are so new in the UK,” Burton said. “The only way to live in a tiny house, as far as I can tell, is to have one in a garden of a residential house or the parents’ property and use the tiny house as an annex. It is not impossible as long as you follow the rules.”

In some parts of the US, tiny houses on wheels (as they are often designed, so they can be moved) can only be placed in a recreational vehicle (RV) park. “It’s considered camping, and camping on private land usually isn’t allowed,” Walker said. “If you’re willing to put your tiny house on a foundation, then you need to find a community with no or a very small minimum house size.” For instance, a city may require that a newly constructed home contain a minimum of 1,000-square-feet (93-square-metres), often to maintain the character or look of an area.

Put careful thought into your home design. Because many tiny houses are designed (and even built) by the owner, you can do whatever you want with your small space. This is your chance to build your dream home—on a tiny scale. “If you have a hobby, build in where you’re going to do your hobby,” Walker said. “It’s important to think about what your preferred activities are. Some people build in a shoe closet or they’ll have lots of hidden cupboards for things they value. Figure out what you really want to keep.”

There are a variety of tiny house plans available online that can be customized to your specifications, or you can consult with a tiny house architect or designer if you can’t find a floor plan that you love.

Do it later: Make big plans. One of the major benefits to calling a tiny place home is the financial freedom that comes from a very small mortgage — or none at all. (Professionally built tiny houses typically cost between $30,000 and $50,000, according to Build it yourself and you could do it for $25,000 or less.) And your tiny space is great motivation to quit hanging out at home. “You want to get out in the community,” Walker said.

Do it smarter: Be willing to stand out. “I don’t think it’s for people who are very concerned about conformity or don’t like to rock the boat,” Walker said. “It is a bit of a new thing, and regulations change, and you need to be willing to adapt and be something of a pioneer to be comfortable with it.”

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