Via Business Insider:
Ryan Mitchell, age 35, completely underestimated the positive impact moving into a tiny house would have on his life.
Mitchell, who runs the blog The Tiny Life and is based in North Carolina, told Business Insider he began building his 150 square-foot tiny house seven years ago. While he spent $US30,000 on building costs (including solar panels) over the first two years, he’s since netted more than six figures during the following five years.
“Even after accounting for the cost of the house, I’ve saved over $US100,000 going tiny, and it’s been a great experience,” Mitchell said. When asked about his savings strategy, he said: “It really was as simple as moving into the tiny house.”
Before moving into his tiny house, Mitchell, who previously worked in non-profits and human resources, was spending about $US1,500 a month on rent, utilities, insurance, and other standard living expenses. He said that most Americans spend 30% to 50% of their income on housing costs, including rent or mortgage, upkeep, utilities, taxes, insurance, cable, and internet.
“I knew if I could eliminate housing costs, I’d win big,” he added. “When people think about saving and budgeting, too often people try to ‘cut out the lattes.’ You saving $US4 on your coffee isn’t going to move the needle; you taking your rent from $US1,500-plus down to $US30 per month – that’s huge.”
Mitchell’s total living expenses right now are less than $US1,000 a month.
By reducing housing costs, Mitchell created a lower cost of living – ultimately putting more money in his pocket. He estimates that he has saved about half of his total income every month to reach $US100,000. But in addition to aggressively saving, he also used some of the extra money he shaved off his living expenses to start up a new business. He later sold that business, further increasing his income. He used the profits to buy his own land, he explained.
But creating and selling a business wasn’t Mitchell’s only source of income. Running The Tiny Life earns him a little more than enough to cover his monthly expenses and allocate about half of his overall monthly income to savings, he said, adding that he only has to work about five hours a week to meet all his bills, savings, and retirement needs, which gives him “a great lifestyle.”
- Where’s it parked?
- Where will the kids go?
- How far behind wider house prices has he fallen over the five years?
- Did he lose all his friends as the social stigma of “trailor trash” took hold?