How much money do you really need per month to be living comfortably?
One of the big topics Mrs Epic and I discussed quite a bit when we were discussing building and living in a tiny house included finances.
Check out the updated cost of living estimates as of April 27, 2017!
- Would it be financially sound to spend several thousand dollars on building a tiny house when we could have taken that money and increased our savings cushion or invested it other ways?
- Would the lowered rent after we were living in the house be worth it?
- Would the energy savings be worth it compared to living in an apartment or “normal” house?
- Would it make sense to work jobs that don’t pay as much because living expenses have decreased?
Don’t get me wrong, these are all valid questions. Some people may have differing opinions about whether the justification to build and live in a tiny house is worth it.
Would it be financially sound to spend several thousand dollars on building a tiny house when we could have taken that money and increased our savings cushion or invested it other ways?
Mrs Epic is still working on a detailed list tallying up every single line item purchased for our tiny house build, but last time we had a rough estimate it was around $32,000 or so. Now, we did not take out any loans to build the house. We used credit cards to purchase items for the tiny house, however, we paid off the balance every single month. This allowed us to use the expenses we endured to gain travel points or travel miles. We’re excited that we’ll be able to travel for cheap for a while thanks to strategic planning with card use. But see, no credit card debt. No loans pulled out. Our house is our house. Paid for.
Sure, we could have saved that money or invested it, but we thought it was going to be worth it to build and live in something we created. We still feel that way today. We’ve been in living in our house for over three months. So far… so awesome! I don’t see myself wanting to move into a normal sized place for the foreseeable future.
Would the lowered rent after we were living in the house be worth it?
During our discussions, we did some calculations and estimations to figure out what our “break even point” would be. We did a living cost comparison back in February to estimate. We’ll do another one in about 2 more months once we have an average for our utility usage where we’re currently living. Honestly, yes, lower rent is definitely worth the build. We live in a beautiful area with close access to trails along a lake. Several of our friends and family are only a few hours away if we wanted to take a trip up to see them.
Would the energy savings be worth it compared to living in an apartment or “normal” house?
This is something that we’re pretty excited about so far. We’ve estimated that our electric bill will only be around $10-12 on average per month. This is much better than the $80 plus we had to pay previously. Granted, we haven’t been in Tennessee in our tiny house during winter, so the electric may go up if we use our heater more frequently. However, the big savings over the course of a year is exciting.
We also have propane for our stove top and shower. Our two five gallon tanks will last us around 3 to 4 months on one refill. The prices around here are between $1.89 and $2.49 per gallon. So with 10 gallons, that’s $18.99 plus tax to $24.99 plus tax every 3 to 4 months. That’s really not that bad if you look at it on the scale of a year. Even if you factor the propane cost and electric cost together, that’s still a pretty substantial savings. We feel it’s worth it.
As far as water goes, our cost is included in our rent at the moment, so we don’t have an accurate idea of what our usage or cost is for that utility.
Would it make sense to work jobs that don’t pay as much because living expenses have decreased?
When we were living in the Sacramento area, Mrs Epic and I both had good paying jobs. We also had way more stress and larger expenses (larger utilities, rent, etc.) We didn’t have as much time as we wanted to do things that we really were interested in. That was one of the big factors we liked about tiny house living and things we had researched online about people living in tiny houses. Their OVERALL expenses had decreased phenomenally so they could afford to work jobs they were interested in, even if they didn’t necessarily pay all that well. In about 99% of the cases with tiny housers, it made sense that they could do just this thing. They could leave their crummy, high stress jobs in exchange for lower stress and more interesting jobs that they had a little bit more passion about. For us, it made sense because neither of us enjoyed where we were working in Sacramento, but couldn’t leave them if we wanted to continue with living normally because of the cost of living in California. Moving out to Tennessee has allowed for even more freedom since the cost of living is cheaper. To be fair, most jobs don’t pay as much as California due to the cost of living adjustment, etc. Either way, so far, it has made sense for us.
So then the big question, how much money do you really NEED per month to be living comfortably???
The answer is, well, we’re not entirely sure yet. We think we need approximately $1,600 a month to cover our expenses, including rent, utilities, cell phones, internet, food, car insurance (no house insurance), health insurance, and incidentals. We would like it to be less than that, ideally, so that we can add to our savings as well, but knowing what we need to cover our base expenses is a good starting point. Between Mrs. Epic and me, we can accomplish this goal and still give ourselves the freedom to find ways of making money that we actually enjoy! It’s a process and we’re still working on it, but we’re excited for the adventure!
$1,600 does seem like a lot. And it is. Currently, it’s still an estimation since we’re still trying to get an average for our food budget out here in Tennessee. At the same time, we’ve added some padding into the food budget, incidentals, etc. so the number may actually be lower than that, too. However, our living expenses were much higher in California, so the fact that we’re now able to spend less and still get the basic essentials and more is great. It also may be possible this estimated living cost number will go down in the future if either of us become employed in a place that offers benefits, so our health insurance costs would go down, too. We’ll see how things go. So far, it’s been a fun adventure to figure it all out!