For the past couple years I have been very impressed with a relatively new movement sweeping across our country- Tiny and Small houses. The phrase Tiny House may cause you to think of a doll house, a cramped space that’s hard to move around in, or a shack in the woods only fit for housing an old hermit. However, the truth is far from such images.
While researching the Tiny House phenomenon I found that these fully-functioning, scaled-down houses are really spacious, equipped with amenities, and really well-designed. Honestly, there were many times I asked, “How’d they fit the outside around the inside?” The designers were able to take a small space and create a very roomy interior.
Another great thing about them is they are so much more affordable than the traditional houses we are used to in America. From a financial perspective Small and Tiny houses are a really great investment and a great money-saving tool for those seeking to buy their first home.
My wife and I know a couple who have recently purchased a large three bedroom house complete with formal dining room, large living room, game room and several extra rooms which are not necessary for a young couple who has yet to have their first child. They are only a few months into their home-ownership and the financial obligation is already causing significant strain on their wallets which then is causing strain on their marriage.
Now, imagine this same couple but with a shift in their mindset. Instead of the big, fancy house they invest in a Tiny House. The square footage is much less but so is the monthly mortgage payment. In fact, instead of stressing over money, they are able to put an extra 1,200 dollars a month into their savings. Also, the term of their mortgage is only fifteen years, not thirty.
Let’s do some math: Let’s say the mortgage on our friends’ traditional house is only $1,500 for thirty years. That’s a total of $540,000. The payments on the Tiny House are $300 per month for fifteen years. That’s a total of $54,000. This couple would have saved $486,000 by purchasing a Tiny or Small House instead of the traditional house that is now causing major problems in their life together. Can you imagine what they could have done with an additional $486,000?
Imagine that they got pregnant the same day they purchased the smaller house. Let’s say they took $600 (of the extra 1200) a month and placed it in a savings account for the child’s higher education. In eighteen years they’d have $129,600 dollars BEFORE INTEREST IS ADDED!!
Isn’t that a much better situation than being stressed over a mortgage, trying to find a second job, refinancing and maybe still losing their home after all their hard work?
If God gave me the choice in my son’s future I’d definitely choose the Tiny House option for him. In fact, my 14 year old son, my wife and I did have that conversation and I’m proud to say he is completely ok with the idea of us building a Tiny House for him to use during his college years so that he can save for his own financial future. Of course he’ll be getting a job to pay for a portion of it. I do believe in teaching our children they must work for what they desire. My wife and I also have no problem with eventually turning over the deed to this Tiny House to our son so that he can rent it for income if he chooses.
Are Tiny Houses for everyone? No, absolutely not. Neither is the stock market, business ownership or mutual funds. However, it is an option worth exploring. I strongly advise you take a couple minutes here and there to look into the cost of building or buying a Tiny or Small house. You may be in a position where downsizing is a smart financial decision. Maybe you’re able to invest in a few of these smaller dwellings as a means of creating Real estate asset. Either way, seek God’s direction in all financial matters!!