Tiny House, Tiny Living, The Tiny Life.

Is It Worth It?

This past weekend I had the chance to meet with several alternative housing folks to talk about various issues.  It sparked some introspection and then I read a post over at Earthbag Building Blog which pointed out if you were to account for the time the average American spends earning money just to pay for standard home in the US, you work 15 years of your life just for your house.  Fifteen years!

More than a third of the average American’s after-tax income is devoted to shelter, usually rent or mortgage payments. If a person works from age 20 to age 65, it can be fairly argued that he or she has put in 15 years (20 in California) just to keep a roof over their head.

It struck me how the cost of a traditional home is not only money, but your time and what is time, but it is our lives, that precious commodity that we cannot buy more of.  That said the case made for alternative housing based only money alone is pretty compelling.  Here is the breakdown of what the average American ends up spending on their standard sized home.   (source: Wall St. Journal, 2007)

So when you can buy a home for $10,000 or 30,000 or even $50,000, the amount you save and the life you gain back, the numbers are pretty compelling.  Add to that the risk involved with taking a mortage, if you mess up once at any time over 30 years, all your money is gone and your credit ruined.

So let’s take back our lives and put that money to a better use!

  1. Thank goodness I don’t live in California! …Our house only cost $56,000. And I think we overpaid! 😉

  2. What a great visual aid to see exactly how crazy it is to buy a traditionally sized and priced home. Even using numbers at 50% of what is shown, is still a very scary prospect of future liability. Good point too on the credit score liability.

  3. One thing that has me questioning in your figures is the maintenance and improvements costs – they seem incredibly high. Is this down to the construction methods favoured in America? (Which seem to be largely cheaper/faster methods than those commonly used in Australia.)

    It is hard to believe a double brick and tile/steel home would require $300 a month of maintenance, and certainly not it’s entire build price again in major repairs/improvements.

    We’ve got a 1968 run down house, and even if we did a new roof, new floors/carpets, new kitchen, new security screens, new gutters, and a new bathroom we’d struggle to hit $150k. And we spend about $500/yr on general maintenance. It’s double brick and tile, it will need the new roof sometime, and many of the other things are aesthetic.

    Our rates (land taxes) and insurance is only a couple of thousand a year too – with contents insurance being a few hundred more. It seems that Americans pay much higher taxes, although things like police etc are state based tax here so not drawn from a ‘housing tax’ as much as from our wages taxation (which is higher).

  4. Exactly! I made the mistake of buying a home in the summer of 2009 for 150,000 with a very small down payment. I love the house and the land I’m on, the location is great too. However I know that if I had stayed in an apartment, I would have traveled more. I wouldn’t have needed couches, lawn tools, lawn mower, home improvement tools (saws, sander, saw horses, drills). We have also remodeled two bathrooms and two bedrooms. I estimate in the three years I’ve been there I have most likely spent close to 10,000 on house things. I don’t regret that, I’m just hoping our sweat equity will pay off when we go to sell the thing or rent it out.

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