One of my goals for downsizing was pursuing my goal of financial freedom. I think financial freedom looks a little different to each of us. Some days I wish financial freedom meant I could quit my job and hang out at the beach or up in the mountains all day every day. Alas I am not there yet. Right now it means the ability to choose work I love, work fewer hours to pay for my day-to-day lifestyle and an opportunity to build up a secure retirement fund for the future (which will include time at the beach and time in the mountains!).
A number of people have asked me if it is actually cheaper to live in a Tiny House than in a “normal” house or apartment. For me, I can say yes without hesitation. I have to pay a monthly fee to stay at the RV park where I am parked, but that fee includes all of my utilities and water. I also have a loan that I used to purchase my Tiny Home. Those two payments together are quite a bit cheaper than anything I could rent or buy in the local area.
I bring up my TH loan because at times it is seemingly at odds with my goal of financial freedom. I don’t know about you, but all of the financial books I have read (and I have read a lot!) recommend working to reduce monthly expenditures and pay off all of our debt so we have more financial flexibility. Obviously, taking on an additional loan doesn’t match that plan. So did my Tiny House actually provide me more financial freedom?
For me the answer is still yes. I was able to rent out my previous home for more money than I owe each month. In fact, I make enough off of my rental property to cover the rent associated with living at the RV park. I am also spending less in a Tiny Home for insurance, maintenance and general up-keep than I did in my previous home. As I mentioned in my previous post, I spend less money now that I am in my Tiny House than I did before. I looked at the long-term financial picture rather than the initial expense for my financial freedom calculations. My Tiny House is part of my 10 year financial freedom plan, and right now I am quite content.
I brought this topic up, because I think it is important to decide what financial freedom looks like to you. I also know that TH loans are a point of contention for many TH enthusiasts. For those of you considering a Tiny House, would a loan stop you from buying one? I am interested in hearing your thoughts on the subject.