Tiny House, Tiny Living, The Tiny Life.

Four Reasons Why We Stayed In Debt

Our debt story began when I was 19 years old and I got my first student loan and credit card. Fast forward 18 years, a marriage and two kids later, we had to come to terms with the four main reasons why we stayed in debt for all of that time.

 

At 37 years of age, I found myself staring at close to $59,000 worth of debt (a long way from that initial $500 student Visa card I had signed up for). Confronting the reasons why we had stayed in debt so long and changing our mindset about debt, finally gave us the motivation we needed to get it paid off.

We thought we had plenty of time:

My goal was always to be debt free by the time I retired. I understood at a young age that heading into your retirement years with debt wasn’t a wise financial decision. The problem was that in my 20’s and early 30’s, I still thought I had plenty of time to get my debt paid off.

I wasn’t in any rush, because I didn’t feel any sense of urgency. Not until I hit my mid-30’s. Once I hit that age, I realized that if we kept going the way we were, spending without a plan, and not putting a thing towards savings, my husband and I were going to be in deep financial trouble.

The other kicker came when I looked at what was being spent on debt-repayment. At the time our debt repayments totaled just over $1000 each month. Looking at the total amount paid, rather than just the individual minimum payments, forced me to see how much money we were throwing away and paying the bank each month, when if we had been smarter with our spending, could have been paying ourselves in the form of retirement investing.

We used our line of credit and credit cards as income:

Because we weren’t on a budget and had no idea where the money was going each month, we found ourselves relying debt to help us get through the month. If the bank balance was getting low, and I still needed to get some food or clothes for the kids, out would come the credit card.

After years of doing this, it really became a vicious cycle of using debt to either pay for the things that we needed, as well as the stuff we wanted. We also got into the trap where I would find that I was paying debt with debt (using Visa to pay MasterCard) if the money was tight at the end of the month and the bills were due.

In order to break out of this vicious cycle, we got on a monthly budget so that we could control our spending, account for our spending, and break the ties with the credit cards and the line of credit once and for all.

“At least we’re not as bad as…”

All of our friends had debt, so I found myself getting into the trap of thinking that debt was normal. Everyone seemed to have debt, so I wrote off the fact that we had debt as “No big deal; We’re just like everyone else”.

I also found myself playing the comparison game. One of my favorite shows on TV at the time was “‘Till Debt do us Part” hosted by Gail Vaz Oxlade. On this show, she would feature families who had gotten themselves into debt and were looking to get out of it.

Instead of being inspired to get out of debt ourselves, I found that I would compare our financial situation to the families featured on the show, and thought, “Well at least we have less debt than them”, as a way to justify and feel better about where we were financially.

Keeping up with the Jones’s:

american dreamThe last reason we stayed in debt as long as we did was our desire to keep up with the Jones’s. I would look at the lifestyles of those making a similar income to my husband and I and felt that we should be able to afford the same types of things.

Where we went wrong was that we didn’t plan or save for major purchases or vacations, we just went ahead and charged them. The down payment for the mini-van, new furniture, and our family vacation to Disney World were all courtesy of MasterCard.

What we have since learned is that we can have all of the things that the Jones’s have, we just need to plan ahead and save up for them first by budgeting and setting aside money into our sinking funds.

Your Turn!

  • What are some money mistakes that you’ve made that kept you in debt?
  • What mindsets did you have to change to pay off any debt you had?

How to have guests in a tiny house

I remember the first time I told my mother about wanting to build a tiny house. After some back and forth about it all, she asked “Where am I going to stay when I visit you!?”

It was a good question and many people have the same question when it comes to living in a small space.  The simplest answer is they don’t stay, you can offer to get them a hotel room and then meet to spend time together.  But some of us want to have folks over.

So here is my guide to how to have guests in a tiny house (or small space):

First thing is I have opted for a cot, which I have measured and at a length of 75 inches, fits perfectly between the end of my counter and the sofa.  I don’t set this up until it’s time for bed because in a tiny house it takes up a lot of room.

You need to consider how you and them are going to get in and out of bed.  For those with a loft, you need to make sure you have room for the ladder and space to climb up and down.  In my tiny house this fit just barley.  Tight tolerances here people!

From there I use a comforter and pillow to dress it up.  I folded it in half so that they could open it like a book and climb in.  If you’ve never slept in a cot, you need some insulation below you because the cool air below will leave you feeling very cold.  A pillow tops the whole thing off.

Next thing you need to deal with is toilet orientation.  People don’t know how to use a composting toilet so you need to give some guidance ahead of time.  Basically you do your thing in the bucket and then cover with wood chips, just enough so you can’t see anything left behind.  For men and women, if you can pee outside (see nearby tree lol) of the toilet that’s the best.  Mixing liquids and solids isn’t the best, but a little won’t hurt.

I have opted for tissues over standard TP because it can sit on the ground anywhere without need of a hanger and I found this perfect box to hold it.  Just make sure you close it up tight after you’re done, we don’t want soggy TP!

I found this Kingston’s Charcoal bin that works really well for wood chips, or whatever we are using at the time.  Other popular options are coconut coir, peat moss, saw dust etc.

Make sure people know where to find a head lamp so they can find the toilet or tree at night and I have hand sanitizer on hand when you are all done.

Meals are often done by going out for dinner or lunch, but if the weather is really nice, we could have a picnic or sit at the picnic table or fire pit.

Showers are fairly standard, but you might find some interesting soap options in the shower because I use all grey water safe products.

There isn’t a sink in the bathroom so you use the sink in the kitchen. There is also a mirror there for your use.

 

That’s about it!  The rest is pretty standard, but I know many people wondered how that all works in a small space.

Your Turn!

  • How are you going to accommodate guests?

6 Common Myths About Minimalism

Minimalism is a lifestyle that I’ll always support. Though it is a very personalized lifestyle, there are loads of misconceptions and assumptions made about minimalism. Here are six common myths about minimalism.

minimalism myths

1. You Count Your Belongings

Though some minimalists do count the amount of belongings they own, a lot of minimalists don’t. I don’t count the amount of things I own, because the number isn’t what is important to me – I prefer to know that the things I own are bringing value to my life. I like to constantly ensure that the belongings I have are working for me, not the other way around. To me, it’s not about the number of things I own – it’s about the value that those things bring me.

2. You’re Nomadic

minimalism myths Lots of minimalists travel full time. But a lot of them don’t, as well. Minimalism gives me freedom that I never thought possible in my previous life. I like to use my freedom to travel full time, but most minimalists I follow don’t travel as much as I do. Minimalism allows the freedom to live the way one would like – and to me, that means full time travel. However, I know loads of minimalists who are settled down in apartments or houses.

3. You Only Wear Black

It’s common in minimalism and capsule wardrobes to have a color theme. This way, matching is easier and most of your clothes will go with each other, ensuring ease of getting dressed in the morning, as well as a simpler and smaller wardrobe. Though black seems to be the most common color (it’s definitely my color of choice), not all minimalists only wear black.

4. You’re Also Vegan / Zero Waste

Minimalism is an alternative lifestyle – it’s still far from mainstream. Living a sustainable and/or vegan lifestyle are also alternative ways of living. But just because all of the above lifestyles have something in common, doesn’t meant that minimalism encompasses them. I consider myself a minimalist, but I’m not zero waste. I know loads of minimalists who aren’t vegan.

common myths minimalism

5. You’re Cheap

Possibly the most common of assumptions about minimalism is that minimalists are cheap. Contrary to this belief, I believe that minimalism means that you can buy the best of everything. For example, if I am going to buy a computer, I want to buy the best computer I can. I don’t want to buy a cheap laptop that will only last me a few years – I spend a decent amount of money to buy the most high-quality, long lasting computer that I can find. I also look for high quality clothes, shoes, and even food. Because I buy less, I can afford to buy better quality items.

6. You Work Online

minimalism mythsWhen I went minimalist, I quickly saw how much more free, light, and happy I felt. I didn’t feel weighed down by my belongings anymore, I could pack up and move wherever I wanted, whenever I wanted. I saved up some money and started traveling. I very quickly realized that if I were to work online, I could keep up this travel-based lifestyle forever. Though I work online, most minimalists I know do not. You can be a minimalist and work a 9-5, you can be a minimalist and work retail, you can be a minimalist no matter what your line of work.

These were six of the most common myths/assumptions about minimalism. Learning more about minimalism and just how personal it is helped me realize that I could become a minimalist. Minimalism is a lifestyle that works for you – creating a life of freedom, happiness, and more excitement.

Your Turn!

  • What are some myths that you’ve heard about minimalism?

Talking to Your Family About Money

Growing up, there were three topics that I was told never to discuss with other people: politics, religion, and money.  As a result, finances were never discussed in my family. I never heard the word “budget” or had a good understanding of what a budget was. Nor did we discuss money management or the importance of saving.

My husband and I don’t want to repeat that same mistake, and discuss our budget and financial situation openly with not only our children, but our parents as well. Approaching the topic of finances can be tricky, but if you know what to focus on, hopefully the awkwardness will quickly fade and this once taboo topic can be openly discussed.

Talking With Your Spouse or Significant Other

When talking about your money with your spouse, you want to set aside time where  you can find some common goals that will require you to be on the same page financially and work together as a team. Perhaps you want a certain amount set aside for retirement, or would like to rid yourself of all of your debt. Set a common goal and then come up with a plan to start working towards that goal.

The next step is to sit down with your spouse and develop a spending plan or a budget. Both parties have to be in agreement, so be prepared to compromise. Don’t forget to include personal spending money for each of you. This will allow you to spend freely, up to a certain amount, so you don’t feel constricted by the budget.

Talking With Your Children

Teaching your children the value of money early on will set them up for success later in life. Understanding the importance of spending wisely and saving will provide the foundation that they will need as they get older and start to earn their own income.

We follow the 10% rule for saving with our children. Each week they receive $5 for chores completed. We set them up with both a checking account and saving account at our local bank, so each week, the girls will deposit their $5 dollars into their checking account and then immediately transfer 10% into their savings account. This also goes for any money that they receive for Christmas or their birthdays.

If you’re comfortable, it’s also helpful if you are honest about your money mistakes as they get older and talk about how some of those mistakes impacted your ability to save or give. You can also make them part of the budget meetings and have their input about family goals that are important to them and show them that in order to achieve those goals, other line items might need to be scaled back or sacrificed.

More than anything though, it’s important that you lead by example. What children see happening in the home has a far greater impact on their future behavior than just discussing what they should be doing with their money.

Talking With Your Parents

Although discussing money with your parents as a grown child might be the most awkward money conversation you’ll have, it’s important to have these conversations as early as you can. It’s important to be informed about their estate plan, whether they have planned for retirement, and what arrangements, if any, have they made for long-term care.

Before beginning the conversation, you want to make sure that you also talk with siblings or other family members on the best way to bring up the topic and plan for a time when the family is together. The time when you decide to approach the topic will depend on your family dynamic.

Deciding when to approach the topic is one thing, figuring out how you’re going to start is the tricky part. If you don’t know where to start, try starting with your own experiences first. You could start off by sharing that you’re thinking of purchasing long-term care insurance or looking at how much is enough to set aside for retirement and ask for advice. Their responses could then be used to get into the conversation around how prepared they are and what measures, if any, they have in place for their long-term care should they get ill and be unable to care for themselves.

The most important information you want to gather from your parents is information about their will, health care arrangements, and power of attorney. Your parents should have in place a will outlining who they have named to make any medical or financial decisions should they become unable to. Ask your parents to assemble a list of accounts, and contact information for their advisers, lawyer, and accountant if they have one. Getting organized while everyone is healthy is key. There is nothing worse than trying to scramble to gather all of the necessary documents in the face of a medical emergency or when dealing with grief.

Your Turn!

 

 

  • What conversations have you had with your family about money?

Announcing The Tiny Life Book Club

After taking some time to talk with you all in a recent email the idea of a book club emerged from the conversations I had. So we are going to try this first book and see how it goes, if people really like it I’ll setup new books each month. Those who join in will need to get a copy of the book we are reading and the discussion takes place on Facebook.

tiny house book club

 

Click Here For More Info

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