If you’re going from three bedrooms with a furnished living room, plus all the kitchen gadgets you still have from a wedding registry or post-college shopping spree, you’re likely going to be taking a hard look at downsizing the amount of stuff you own before moving it all into a tiny house.
As you continue to live in the smaller setting, that same mindset of minimalism will likely prevail. You won’t be bulking up your collection of abstract art or purchasing a new armchair — you simply won’t have the space for it. That might be a mindset change, but can often be friendly for your budget.
Tiny Living reports that 55% of people who live in tiny houses have more savings in the bank than the average American, with a median savings of $10,972. Considering most people couldn’t afford a $500 emergency, that’s a significant difference. On top of that, 89% of people living in tiny homes have less credit card debt than the average American. A whopping 65% of the demographic have zero credit card debt at all.
You could say that people who live in tiny houses were more likely to have financial mindsets that eschew debt in the first place, and that might be part of the explanation. However, it’s not hard to believe that living in a tiny space would also encourage you to make smart financial decisions about splurging on unnecessary items. If you don’t have space for five new pairs of shoes, you’re not going to buy them.