One of the biggest pulls to tiny house living is the freedom from financial burdens. But what you don’t expect is the high upfront cost from limited financing options, the small pool of remote employment opportunities, and exorbitant travel and parking costs. After living on the road in an RV with my family for a year, I’ve learned that no matter how snazzy your home is, tiny living is frugal living—and budgeting is so important. You always need a rainy day fund for when something breaks (because, oh, it will break!)
Stashing cash away on a limited—and sometimes sporadic—income is hard (something I imagine many millennials can relate to!). But over time, you discover sneaky ways to save and learn how to optimize your spending.
But these lessons aren’t only for those who live in less than 200 square feet. You can save like you live tiny—you just need to know the insider tips from those who do it IRL. Thankfully, as one of these small space dwellers, I pooled my tiny living friends for their sneaky saving tricks. Here, some of the best:
1. Minimize your long-term investment cost
When buying something, think about the lifespan of the product. For example, while the jump from a $30 pair of jeans to a $80 pair of jeans may seem like a lot right now—it will save you money. Instead of buying a mediocre $30 pair of jeans twice a year for two years ($120), you can instead invest in a really good $80 pair of jeans and get the same amount of use—saving you $40 over time.
Andrew Odom of Tiny r(E)volution calls this method “Buy once, buy quality.” Not only does it minimize your investment cost over the long term, it also allows you to stay minimal with your possessions—something very important to tiny living.
My husband and I use this thinking all the time. Last year, we needed a space heater for our 300-square-foot RV. Since our electricity is included in rent when we’re parked, we wanted an electric heater. In our initial research, we found that these ranged from $15-$300. We budgeted for the most expensive one, did more research, and ultimately purchased one for $45. It has lasted us over a year so far—and since we budgeted for a $300 heater, we were able to reassign over $250 in savings.
(Image credit: Sonja Lekovic/Stocksy)
2. Buy with cash
Another way Odom saves cash? Well, by spending it. By using cash instead of a credit or debit card, money is a tangible, scarce resource: You will run out of it eventually and have to find an ATM to replenish. Because of this, you’re more likely to cap your spending—because who wants to run around and find an ATM? Studies have shown that people are likely to spend as much as 83 percent more with their credit cards than they would with cash. Leave your card at home and magically find you’re spending less.
3. Budget, budget, budget
If you don’t budget because you don’t think you can stick to one—think again. It’s not so much about budgeting. It’s really about being hyper-conscious about where your money is going and paying attention to how your purchases add up.
My husband and I revise our budget every month to track expenses, plan out payments, and make sure we’re not consistently overspending in certain categories. Sometimes we do overspend—we are only human—but figuring out when we’re most likely to do so allows us to better plan for the next month.
One major thing that has helped us prep for overspending is adding a line item in our budget for everything. While you think those $3 buys at the checkout are harmless—they do add up over time, so it’s better to build in these impulse purchases. Don’t convince yourself that it’s a one-time only thing because it’s not!
This is all like how you’re less likely to overeat if you keep track of every bite you take—by really thinking about where your dollars are going, you’re likely to spend less. We build these purchases into our budget under “miscellaneous” and we put everything from a coffee on a long work trip to needed supplies for an unexpected school project in it. Revising our budget each month allows us to see how much this miscellaneous fund should carry. We always over budget for “miscellaneous” and put what we don’t spend each month into that rainy day fund I mentioned earlier.
(Image credit: Kristen Curette Hines/Stocksy)
4. Research a little bit more
While you may spend time researching big purchases like a car and even smaller splurges like a computer or phone, you probably don’t spend the same amount of time researching smaller purchases, like clothes.
But if you do decide to go the $100 jeans versus $30 jeans route, you still need to do your research. We should all know by now that just because something is more expensive, that doesn’t mean it’s better quality. Do your research before to make sure the long term math checks out. If possible, also buy from a company with a lengthy wear-and-tear warranty.
Now, for the bigger purchases. Don’t just research the product—also search to see if there are any potential extra costs or savings. When my husband and I were buying a tiny home, we knew the house would cost between $40K and $60K. However, we didn’t have a solid grasp on how expensive all the extras would be—so we read a lot and found out that parking, gas, permitting, and appliances were going to be pretty expensive. We added these into our savings budget, so once these costs came up, we didn’t have to go into debt or use credit cards to cover them. This saved us a lot of money in the end.
If you’re not buying a tiny home, this is a good strategy for other big purchases in life: Moving and settling in after buying a home can cost tens of thousands of dollars on top of your closing costs. Paying for transit, cabs, meals out, exchange rates, and luggage fees while traveling can unexpectedly cost hundreds of dollars more than the plane ticket and hotel room. That television you’re buying might need to be professionally installed and require a couple of more expensive cords. All these extra expenses can really add up—but the end amount doesn’t have to be a surprise. Take an hour or two Googling and reading user reviews to get a good idea of the complete cost. If you can, wait to purchase whatever it is until you have enough budgeted. If you prepare, you can stay away from dipping into savings to cover these otherwise “unexpected” costs. Additionally, you have more time to find any potential savings, too!