Tiny House, Huge Savings: 11 Micro Habits That Build Wealth While Living Small

Living in a tiny house gives us the opportunity to look at life from a new angle. Finances are an important part of everyone’s life, and it’s especially valuable to reevaluate your financial plans now that your living expenses have changed significantly with tiny living.

I recently discovered Mel Abraham through his YouTube channel and his insightful book entitled “Building Your Money Machine.” (affiliate link) He offers numerous practical financial strategies, and I wanted to share some of his relatively simple tips that are perfect for tiny house dwellers looking to maximize their financial potential. Below are eleven small but powerful habits that can transform your financial future without requiring massive lifestyle changes.

You can watch Mel’s video below.

Here are his tips in a nutshell.

1. Automate Your Savings and Investing: Set up automatic transfers to different accounts (savings, investments) when money comes in. This removes friction from saving and investing. Studies show people who automate their savings have 80% more in savings than those who don’t.
2. Track Your Spending for 30 Days: Without judgment, track every expense to gain clear awareness of where your money goes. The average American spends over $1,500 a year on non-essential items without realizing it. Awareness allows you to make intentional choices about your spending.
3. Follow the 24-Hour Rule: For large or impulse purchases, wait 24-48 hours before buying. This cooling-off period helps you determine if you really want the item. Studies show 88% of people make impulse purchases, averaging $276 a month in unplanned spending.
4. Adopt a “1% Better” Mindset: Focus on getting 1% better each day with micro-goals like reading a financial article, listening to a financial podcast, or moving an extra $5 to savings. These small improvements compound dramatically over time.
5. Pay Yourself First: Make your wealth creation a priority by investing first, then building your life with what remains. Start with just 3-5% of your income and gradually increase. Consistent savers who put aside 10-15% of their income are 90% more likely to retire comfortably.
6. Invest in Learning: Commit to building your financial literacy through books, shows, and resources. People who educate themselves about financial literacy are five times more likely to build lasting wealth than those who don’t.
7. Save Unexpected Money: When you receive lump sums (bonuses, gifts, inheritance), use a small portion to celebrate, another small portion for living expenses, and invest the remainder.
8. Increase Your Savings Rate by 1% Every Six Months: Start with what you can (even just 5%) and systematically increase your savings rate every six months until you reach 20-25% of your income.
9. Split-Fund Your Raises: When you receive a raise, put half toward improving your lifestyle and half toward investments and savings.
10. Remove Credit Cards from Purchase Apps: Delete stored credit card information from Amazon, food delivery services, and other shopping platforms. This creates friction in the buying process, reducing impulse purchases.
11. Round Up Your Purchases: Use apps like Acorns or Qapital that automatically round up purchases to the nearest dollar and invest the difference. Users typically save an average of $30-50 per month without extra effort.

These habits don’t require massive lifestyle changes but create significant wealth over time through consistent application.

Follow Mel on Youtube. 

Purchase Mel’s book on Amazon. (affiliate link)