Today I’m going to address the question: How much money can you save by living in a tiny house? This answer is based on our own experiences and our own finances. The amount of money could vary for everyone.
We originally began living in an Airstream because we needed to save money. (At 188 square feet, we consider the Airstream a tiny house.) After we got married, George and I started to look at our finances and it wasn’t pretty. Individually we’ve each received 6 years of higher education. This gave us a bit of a later start in life. During our college years and even into the beginning of our professional careers, we saved nothing. Yes, we probably didn’t spend as wisely as we could have, but there wasn’t much left after paying our bills to save. George was a teacher and I am a librarian. We made (and still make) less than the national average wage index, but we are above the poverty line. We knew that we needed to do something that would dramatically improve our finances.
Living in a more affordable place seemed the answer. We looked around at apartments in the new area where we were going to live. We were instantly discouraged. The apartments that were clean and safe would leave us with nothing at the end of the month. We’d be fighting the paycheck-to-paycheck cycle for the rest of our lives. We wanted out.
One day I stumbled across this Featured Seller story on pollenArts— a creative couple who work and live in their Winnebago! One night while lying in bed looking at adorable little properties we couldn’t afford, I mentioned it to George. I didn’t put the pieces together, but George started searching for RVs on Craigslist right away. He knew we could do this. Airstreams had the most appeal, although they were a bit pricier than other RVs. Our Airstream cost $5,000 and it took about $1,500 to fix up. (You can read the whole buying story here.)
Now that you’ve got the history of our story, on to the good stuff! We spend about $700 on living expenses each month while living in the Airstream. (More about our expenses breakdown here.) This includes food, electricity, life, etc. In the past, our rent payments varied widely. Our most expensive rent payment was $1,000 a month– that’s what we were paying before we decided to move into the Airstream. That doesn’t even include the life stuff. When we were renting, we were spending everything we made.
This past year while living in the Airstream, I also went on a Spending Diet for the website I write for, And Then We Saved. I attempted to spend only $100 a month on “extra” stuff. Extra stuff included makeup, haircuts, clothes and stuff that I needed but didn’t really need to live. (You can read more about my Spending Diet here.) I didn’t succeed every month. It was much harder than I expected it to be! But I succeeded about 75% of the time.
With the help of the Spending Diet, I saved $12,441.99 in a year! I was hoping to save $15,000, but considering that I saved about half of my paycheck each month, I consider this a huge success. I also don’t plan on going back to my old ways, so I think I’ll hit my $15,000 goal in a few months.
Prior to the Spending Diet, we had lived in the Airstream for about a year. We went spent much of our “extra” money going on trips, but I don’t regret that at all. We could definitely save more if we didn’t go on vacations, but traveling is one of our priorities. George and I have been able to travel to Portland, Memphis, Austin, Canada/Niagra Falls and we took a road trip to Florida. I now also have emergency savings, a 401k and a Roth IRA. I didn’t even know what those things were a few years ago! Now that I’m off the Spending Diet (but still on the savings train) we just booked a trip to Iceland! So crazy.
Yes, we’ve been able to save more money by living tiny, but we’ve also been able to travel and explore the world outside our tiny home. That is priceless.
That being said, the longer we stay in the Airstream, the more we can save and the more we can travel. If we stay in the Airstream for another 5 years and continue saving at the same rate, we could save $60,000. That’s insane. I don’t know what our life will look like in another 5 years, but with that kind of savings, we could do something big.
Have you ever thought about living tiny to save money? Talk to me in the comments!