The average House size in the US has grown from 551 sq ft per person in 1973 to 1059 sq ft per person in 2014. At the same time the average price per sq ft. for new homes has grown from $20 per sq ft. to over $110 in 2015.
With this increase in house size and cost, they have began the increasing cost of living in these larger homes, electricity bills, water bills, mortgages, and property taxes, to name a few. In large U.S. cities, like San Francisco and New York; this has become a major issue. The average cost of living now in San Francisco is a staggering $4,612 per month, of which rent accounts for 72.7% at $3,353 per month. Hence, the Tiny Home movement will succeed you in less wage of housing bills and using money the way you want your lifestyle.
This all sounds great, however going from a 2000 sq ft home to a Tiny Home of less than 200 sq ft is not for the light of heart; it will mean big changes in your daily lifestyle.
There is no one formula for making these changes, however here are a few steps to help you prepare for your new, tiny living, lifestyle. Due to the magnitude of these changes, it is strongly recommended to make these changes in lifestyle over at least, one year.
The cost of a Tiny Home is not insignificant, with the cost of a Tiny Home ranging from $30,000 to well over $100,000, plus depending on the size and standard of the build. You can either build your own or purchase from several Tiny Home builders. So the first step is funding your build or Tiny Home purchase.
You should look to reduce your daily outgoings, reduce your debt to income ratio, and downsize.
Reduce Spending – Cut back on the amount of money you spend every month and use the money to pay off as much debt as you can. I recommend using a spending tracking tool like MINT to track your spending on all those lattes, shopping trips, and eating out and start figuring out where you can save money. Remember, a dollar not spent is like two dollars saved towards your future Tiny Home.
Reduce Debt – For the debt you can use a debt calculator like CNN Money Debt Calculator to calculate the number of months it will take to pay off your debt. Look to consolidate all your high interest debt into a low interest loan to reduce monthly payments. There are several online compare sites that will help you find the best lender, such as Lendingtree.
Downsize – Start selling off items that you will not take to your Tiny Home. Look at your clothes, household items, garage tools etc. and ask the last time you actually used something. If you have not used it in 12 months and it is not essential to your life, then list it on Craiglist or Letgo, have a Garage Sale, or donate to your charity store or home shelter. As a last resort throw it away, but only throw away things that can’t be recycled or reused in some way.
Repeat the above three steps and you will be heading towards owning a tiny home and lessening your environmental footprint.
Finally once you have downsized put all the items you have into a small room in your current home and determine if you can live there. If you can do this for one year you’re ready to move into your Tiny Home!
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