There are a lot of reasons people are choosing to downsize their lives and live tiny. We have multiple reasons. One of our tops reasons is the ability to get rid of the massive amount of debt we currently carry and to learn from the mistakes of our past with credit consumerism.
According to the US Federal Reserve (which technically isn’t a federal department, and holds no reserves) the typical American household carries around $137,000 in total debts. While the median American income hovers around $59,000.
Ourselves, we hold around $35,000 in credit card debt, a vehicle loan, and a traditional mortgage… Now, while our numbers are better than the averages, as our total debt isn’t $137,000 and our income is just a bit (barely) higher than the median, we still struggle with debt to income issues and increasing interests rates. We have, since the beginning of this project been more aware of where our credit is being spent and have been working to pay as much of it down as we can without adding much more to it. Because of how far in debt we are and the rising interest rates, minimum payments and our incomes staying relatively the same over the years, to stop using credit altogether is not feasible for us. But we have stopped using them for frivolities and filling our house with more stuff. That is one reason we are where we are and why we are building the bus.
In order for us to get out from this massive debt we decided to build the bus into a tiny home and sell our traditional home. With the rise in housing values since we bought our home in 2011 we can pay off the outstanding mortgage and the total of our credit debts and still have a store of cash on hand to use to travel for a while and settle down when we find a place.
Now we know this isn’t the case for a lot of folks, but if you are in this same situation I urge you to find some sort of financial counseling or help to eradicate the debt that you can and work towards financial freedom before starting your own conversion. It will help tremendously in the long run.
Tiny living for us includes minimizing our debt for a better life on the road and afterwards.