Biggest Money Saving Tip I Know – Live Big in a Tiny Home

If you seek wealth, then avoid life’s big mistakes. Such mistakes can be buying luxury cars that are outside your budget, overseas vacations purchased on credit cards, or living in a place you can’t afford. Which brings me to today’s post on how we Live Big in a Tiny Home!

If your goal is to upgrade to a mansion, as The Green Swan shared in a cool article, then that’s great. But only if you make a conscious decision to make that happen responsibly.

“Hey, I want to live THERE, which costs $X/month, so I’m going to save money at Y rate and make it happen in three years!” = GREAT.

“Hey, I’m going to get a second mortgage that I probably will never be able to pay off and make this happen next month!” = HARD NO.

What I find most detrimental to building wealth is an unconscious urge to spend for selfish reasons or as an insatiable appetite to live bigger and better with the hope that this leads to happiness.

Mindlessly spending money might lead to a temporary ping of excitement. But, if spending is what leads to excitement, I can tell you right now, all money will eventually run out.

Money can be a source of greatness by providing security & freedom, but it will not provide true or lasting joy.

One of life’s big mistakes is falling into the trap of always wanting more. My girlfriend and I have  taken the opposite approach.

We learned early on that spending money to find happiness is not a sustainable approach.

Outside of the monetary benefits of our approach, it has led us to a deeper sense of happiness and has made our relationship stronger.

Live Big in a Tiny Home

We made a choice to live in a one bedroom home here in Chicago. We actually sent a year looking at units in our building before we moved in because we wanted to best place for the best deal.

Our home has everything we need. Mainly, four walls and enough space for us to cook & sleep and for our two cats to run sprints in the middle of the night. It even has such luxuries as an in-unit washer dryer, a dishwasher, and a balcony.

We picked this specific location because it was within walking distance of work. I can’t begin to tell you the benefits walking everyday has for the mind and body…or our wallets.

We feel as if we are living like the kings and queens of old despite not spending nearly 50% of our income.

“Not spending,” might be misleading because every paycheck is being put to good use as down payments on our future freedom and security.

The Need to Upgrade – Does our home have everything we want?

As we continue to establish ourselves in our careers, we want to build not only our relationships, but we want to also build up in terms of our living conditions.

I would love to have a 2 bedroom, 2 bath that is big enough so that my 5am coffee making doesn’t wake up my girlfriend (who begrudgingly forces herself awake at 7:34am).

Or, I could learn to cold brew my coffee…

Do you live far below your means when it comes to housing? Are you freeing up your cash flow for bigger and better purchases? Do you dream of upgrading to a bigger house like me?

Master Distiller

P.S. Credit for the great photo goes out to this cool site.

15 comments… add one
  • Financial Coach Brad Sep 14, 2016, 6:21 am

    Good stuff! We downsized two years ago and haven’t had a single regret. We love the smaller place and it is quite a bit less expensive to maintain monthly.

  • The Green Swan Sep 14, 2016, 7:46 am

    Thanks for the reference, Matt. I think you said it well by calling out “mindless spending”. Putting a plan in place and recognizing all repercussions is key!

  • Jon @ Be Net Worthy Sep 14, 2016, 8:04 am

    For a second I thought, “wait, is that Matt’s place – how awesome!” And then I realized it couldn’t be – where are the sweaty shorts, bike parts and swim gear from the triathlon training?

    Anyway, great post and a great message. Housing is always one of the biggest expenses people have and if they can keep that under control, it opens up a world of financial possibilities. I would say that we did not take the smaller is better route, but are very happy with our decision. The bigger house is keeping us from achieving FI earlier without a doubt, but we are OK with that. On track to have it paid off in 9 years which coincides with my youngest graduating college (hopefully!).

  • Financial Panther Sep 14, 2016, 8:43 am

    Ms. FP and I used to live in a 600 Sq ft apartment and we loved it! Before our current living situation, we’ve always lived together in tiny 1 bedroom apartments. Definitely brought us closer together I think.

    We’ve since moved back into a 4 bedroom house that she owns (she had been renting it out to 3 roommates while in school) and it’s way to big for just the two of us. The cost isn’t very expensive for the two of us to live there, but just to get a little income out of it, we put up a room on airbnb and have been earning enough to pay 80% or more of the mortgage each month (if we wanted to use that airbnb income – we just save it right now).

    Just a suggestion I have for folks who might be in a house that’s a bit too big.

  • Ms. Montana Sep 14, 2016, 10:21 am

    Our home is 1600 sf feet which might be considered small for a family of 7 (only every person we know has told us this!) But we paid cash for it, and love not having a mortgage. If we move into something bigger at some point, I would love to have the house be able to cover it’s costs via a mother in law suite or guest house/rental. Or be able to just pay cash again.

  • Ms Rustic Walks Sep 14, 2016, 10:33 am

    We just did the same thing! We were planning to move to a 2 bed/2 bath apartment but decided to stick to a one bedroom apartment instead. All that extra room just means we would fill it with stuff we don’t need. And in our area, that extra bedroom adds almost $1,000 to our monthly rent. No thanks!

  • Stefan @Mllnnlbudget Sep 14, 2016, 10:56 am

    Living small and saving aggressively when you are able to is a great way to set yourself up for success. Too many people get out of college and are not used to having money coming in that they spend it on their every desire. This is unsustainable and the earlier you can start saving the quicker you can get what you desire in life. I plan on starting small with houses and hacking my way into building rental properties by potentially moving houses every 2 years or so, if I stay in the US.

  • Physician on FIRE Sep 14, 2016, 1:53 pm

    Our primary home is about 3600 square feet. Our cabin / condo is about 700 square feet. We have just as much fun in the small place as we do in the big. That might have something to do with the fact that I’m on vacation at the small place, but I know when the time comes to move or build again someday, we’ll be looking to downsize.


  • ESI Money Sep 14, 2016, 1:57 pm

    Have you seen the cool 300 square feet homes they have these days?

    We got to see several on a recent Parade of Homes trip.

    They were awesome, but I’m not sure my wife and I could take being that close to each other all day. Though it could save us a ton of money as one of us would probably kill the other one. 🙂

    They aren’t cheap either…$80k or so. But cool to look at for sure.

  • Miss Mazuma Sep 14, 2016, 2:02 pm

    Hey – dont you mean your fiance?? 😉

    Finding decent housing in Chicago is not easy but it CAN be done. I live north of Irving Park and there are some great pockets in this area that most people never explore. I think you guys are smart to stick to a one bed for the time being…more space is more time cleaning for me. I’ve had it all from a studio to a one bed to a townhouse to a house and wound up right back where I was most comfortable in my studio.

    Public transportation in this city is awesome compared to most. The walkability and Divvy bikes are great options as well. The fluctuating weather is the biggest drawback to Chicago, but, that’s just part of the cities charm when you really think about it. 🙂

  • Vicki@MakeSmarterDecisions Sep 14, 2016, 3:32 pm

    We (four of us) have lived in a 1500 sf house for the last 11 years and when the youngest goes off to college next fall, we’ll be downsizing into a rental of ours that is 1000 sf. It will be tight when they are home for vacations but they understand why we are doing it. We also have a vacation condo that is about 1000 sf and we’ll spend time there when they are on breaks – so it all works out fine! The two 1000 sf houses cost $45K each – so for $90K we are all set with 2 homes. Crazy when I type that – and a future blog post! Living below our means in terms of housing got us to FI – no doubt in my mind.

  • FinanciaLibre Sep 15, 2016, 9:10 am

    Right on, DD! Outstanding post!

    Like you, we’ve always way “underspent” on housing. It’s such a big wealth lever that we’ve never been able to justify spending more – and that includes in expensive cities in the U.S. and Europe. Which is to say it can be done anywhere.

    When we bought our house, we could have borrowed about 4x of what we ended up taking for the mortgage. The house we got is plenty big and plenty good. But we occasionally miss those low-maintenance days of apartment living…So I guess we dream of “upgrading” to a smaller place sometime in the future!

    Nice work here as usual!

  • Mustard Seed Money Sep 15, 2016, 6:22 pm

    Excellent post of allocating your money to maximize your happiness.

    I think too many people try to compete with others in life of what they think makes them happy vs. what actually makes them happy.

    Good for you for figuring that out early in life.

  • Brian Oct 4, 2016, 9:04 pm

    We downsized over the summer and have not regretted it one bit. I was afraid my wife was going to be upset after the move but she is much happier with less to maintain and no stress. Space is less but so are the expenses. Thanks for sharing your experience.


    • Distilled Dollar Oct 7, 2016, 9:34 pm

      I love the fact that less space – less things we need to fill it up and less on our utility bill.

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