How Investing In A Tiny House Can Create Financial Independence In The Future
Investing. There are those of us who are risk adverse in the stock market, those who see the opportunity to invest in the stock market and those of us who bury our heads and avoid the stock market altogether. There’s a case for each I suppose.
Deciding to go tiny would certainly fall in the same category for many people. It’s too risky for some, some of us see the opportunity it creates for our future, and some choose not to recognize it as a possibility at all. However, if you’re reading this magazine I’d venture to guess that you see the opportunities it creates for your future.
Buying or building a tiny house is a significant investment in our financial future. We not only decrease the amount of space we occupy, but both intentionally and inadvertently we decrease our cost of living. I find that simplifying leads to a reprioritization of needs.
We begin to intentionally release our need for possessions and services that were once a requirement, in turn reducing our cost of living.
For myself, I’ve seen this as I let go of subscriptions like Le Tote and memberships for monthly massages. Each of these decisions had to come in their own time. Two years ago, if you’d said I don’t have a standing appointment with my masseuse I would’ve scowled at you and probably made note not to be your friend because I don’t need that kind of negativity in my life! After a year of much less stress I’m living a life with much less tension and a massage has become a luxury not an absolute need, so I can make the decision to have one when I want now. It frees up space in my monthly budget.
The freedom that this reduction in cost of living creates has endless possibilities. Financial Independence is different for everyone, but the conversation tends to focus around freedom.
Freedom can mean different things, but it often means living life on our own terms. For some it means freedom to change career paths, for some it’s the freedom to retire early, for others it’s the freedom to provide a different lifestyle for their children. For me, the resulting freedom of the tiny house became about retiring early. I bought my house when I was 30 and my goal was to retire by the time I was 37. The reduction in my expenses would be key in reaching this goal. After two years in the house my goals have shifted slightly.
I realized my perspective on early retirement was about living a particular lifestyle, not necessarily about not working at all. I slowly worked towards building a savings that would be flexible when the time came for a change. It was an arduous process, but the lower cost of living was key to paying off $40,000 in debt in less than a year. Most of this debt was the tiny house itself. Then, I began socking away what I had been paying on that debt and the cash savings built quickly.
I had a target goal, but it wasn’t for any one thing in particular; I knew I could use it for repairs on my rental home, savings for a vehicle or a padded account for life. It turns out this savings allowed me to leave a corporate job and start my own consulting firm. It gave me freedom to take a risk and it’s been the healthiest decision I could’ve ever made.
I am a Food Scientist and work with food entrepreneurs who want to commercialize an artisan recipe for sale in retail or foodservice markets. I get to do what I love and I get to impact others dreams! It would’ve taken me many more years to get to develop this vision if I hadn’t pursued a tiny house.
If you’re starting your tiny house journey, I’d encourage you to envision the life you dream of and pinpoint how your finances are tied to this dream. If you’re scared to face your finances, it’s easier when we have a single goal, then begin breaking down that goal into small steps.
Do you know what you spend each month? If not, begin by tracking your expenses; identify every dollar you spend in a month. If that’s too daunting, figure out what you spend in one week. Then, the fun part can begin! You can start tweaking what you spend. You have the opportunity to redirect your spending if you’d like.
It is good to understand what’s a need (rent/mortgage, utilities, food, etc.) and what’s a want (here’s looking at you monthly massage). Once you’ve done this you can redirect your spending.
Money is often intimidating for people. If we shift our perspective to see the opportunity we have to manage our money, we can see potential for the future. We can pay off debt, save for the future, create businesses or simply retire. You’re already on the right path by deciding to go tiny! You are aware of your needs and fully capable of managing your money. Set the goal and go achieve it! If you need encouragement, or you’d like someone to connect you to a financial mentor or great books to inspire you on your financial journey.
The decision to go tiny begins to impact every area of our lives. It certainly impacts our financial freedom. Investing in a tiny house is an investment in our future financial independence. It’s inspiring to see all the ways downsizing begins to change our lives. The more conscious we are of our lifestyle choices, the more we begin to see how they impact our financial future.
Written By :: Ashley Sutterfield for Thttps://tinyhousemagazine.co/iny House Magazine Issue 71
