While shows like Tiny House and Big Living have made the tiny-house movement en vogue, it’s really not new at all. In fact, Henry David Thoreau lived in a 150-square-foot house back in the 1840s, as a personal experiment on the concept of simplification.

This idea seems to have gained new traction in recent years, though, making tiny living a popular consideration for many people. Not only is a small home part of a minimalist lifestyle, but it can also offer you the opportunity to travel more. Some people even use tiny living as a way to save money on monthly expenses, get out of debt, and retire early.

So, how much does living small cost, and can you really save money by jumping onto the tiny home bandwagon?

Buying or Building Your (Tiny) Home

Cost: average $23,000

The second-biggest expense that most of us will ever incur is the purchase of a home. (The first biggest? Taxes.) If you’re considering a jump to the tiny home movement, you can also expect that the structure itself will be your biggest expense.

This is the case whether you buy a tiny home or build it yourself, though the former is often much more expensive than the latter. In fact, the average cost to build your own tiny home is a mere $23,000.

If you’re uncomfortable tackling the DIY-build challenge, there’s always the option to have a company build the shell of the structure for you. This is a bit more expensive than building it entirely on your own, but gives you a good mix of professionally built and DIY.

While you can find affordable pre-built homes, you could also veer to the luxurious end of the spectrum. There are even some tiny homes running just shy of half a million dollars (this one is just up the road from me in Bethesda, Maryland).

Let’s compare that to the typical cost for “normal” homeownership in the United States. According to Zillow, the median home price for a currently-listed home in the US is $257,990, while the median sold price is $228,200. Of course, this varies wildly from state to state, with California seeing a median value of $469,300 and Ohio resting at only $122,400.

Even in the lower-value states, the cost of buying or building a tiny home is still a fraction of the cost of buying a normal home. And, the structure isn’t the only place you’ll save money, either.

Tiny House Utilities

Monthly cost:$10-30+, depending on needs

If you want basic conveniences in your tiny home, it’s going to cost you each month. Utilities such as water, sewer, electricity, gas, and even cable are available but can range quite a bit in price.

Some tiny homes are set up with solar panels, to harness and store electricity from the sun and make powering appliances cheaper. Furthermore, tiny houses can be made to be more energy-efficient, by using certain appliances, LED light bulbs, and the like.

Sewer is often provided as a hookup option, depending on where you park your tiny home. If you decide to make it a permanent structure on your property, you can usually run or splice an existing sewer line in, as well, and just pay for monthly public service. Another option is to use a composting toilet or container toilet, which can entirely eliminate the need for public sewer services.

Water also comes in many forms. Some tiny homeowners choose to collect rainwater in collection tanks, using this free water for bathing, cooking, and even drinking (with the right measures to protect against contamination). However, you can also hook up to water lines when parked at an RV park, campsite, or residential property.

Many tiny home dwellers utilize propane tanks for heating their stoves and even running their refrigerators. This is a cost-effective option, and you can even buy appliances that will run off of electricity when you’re near a source or off of propane when you’re on the go.

Another option for tiny living is cable. If your home is a permanent dwelling or even parked at a campsite with hookups, you can utilize cable and internet services. If you’re on the go or at a less permanent location, WiFi services may be available. Another option is to use existing data plans through your phone or tablet servicer, to either access internet on those devices or even use them as a mobile hotspot. Your monthly internet needs and preferences will determine how much you need to pay, but it could be anywhere from free to $150 a month and up.

There isn’t enough data available to make a precise determination–and there are too many options for tiny home living to give a broad generalization. However, there are some tiny home dwellers documenting their expenses across the web, which you can use to gauge your own potential bills.

The average spending on utilities each month seems to be somewhere around $30. When compared to the average American, who pays about $172 a month for utilities, this is a huge saving.

Of course, this number can vary wildly for both tiny homeowners and typical homeowners – for instance, my electric bill was over $400 last month alone (ouch). Either way, tiny home dwellers are all-but-sure to save quite a bit each month on utilities.

Cost to Park a Tiny House

Monthly cost: Free to $600+

Aside from the structure itself, you’ll also incur costs based on exactly where you put your tiny home. There are many different approaches to this, just based on your individual goals and your area’s regulations.

Some people will pour a slab and create a permanent foundation for their tiny home, complete with sewer hookups and electrical lines. You could even get fiber optic cable this way! If you chose to buy your own land, you would of course need to worry about the cost of the property itself. You may even be able to piggyback your tiny home on an existing property of yours or a friend’s, saving a bit of money on land expenses.

Others may choose to put their tiny home in a community, whether that means a tiny home park or even an RV park. These typically offer hookups for utilities, as well as amenities like gyms, hot tubs, and community centers, all for one monthly rent payment.

Since tiny house villages are a fairly newer concept, they’re a little harder to find. However, you can start by calling RV parks in your area and asking whether they allow parking of tiny homes. Some of these communities may even have pre-built homes that you can buy or rent. Here’s a list of some communities across the U.S., which may be a great way to start. There’s also Try It Tiny, which is an Airbnb-type website for those who want to try staying in a tiny home, as well as helps connect tiny homeowners with places to park across the country.

There’s also the option of keeping your tiny home on wheels, traveling with it just like a mobile home. This allows you to utilize campsites, parks, RV communities, or even hookups from friends or family while you move around.

Depending on your plans for your tiny home, your added parking expenses may vary. To set up shop at an RV park, you can expect to pay a few hundred dollars a month. For example, the Mesa Campground in Colorado charges $615 a month for a 30-amp powered spot with water, sewer, and electric. If you want to park in Wisconsin, the Birnamwood park only charges $250 to park your tiny home (but doesn’t offer quite as many amenities).

To see a list of some advertised tiny home parks, you can check out the Tiny House Network.

Tiny House Insurance

Monthly cost: approximately $50

Insurance is yet another expense for tiny home living that can vary wildly but is still necessary. Whether you choose to put your home on a permanent foundation or travel around the country, you’ll need some form of coverage.

If you choose to trailer your tiny home around, you can find a policy that covers your home either as a covered trailer or as an RV. For the latter, you’ll need to ensure that your home is built to code and then classified as an RV (this typically excludes those who DIY-build).

While the data is sparse on the cost of insurance, the folks at Policy Genius venture to guess that insuring a tiny home is approximately $600 a year, or $50 a month. If you’re traveling around the country, be sure to also factor in the cost of auto insurance (which can typically be bundled with your tiny home/RV/trailer policy).

There’s also insurance that’s required if you want to rent out your tiny home when you’re not using it or when you’re out of town. There are no cut-and-dry calculations for that type of policy, so be sure to ask your insurer about all of the coverage they provide, to ensure that it meets all of your specific needs.

Income Opportunities (List it)

The great thing about building a tiny home is that it’s not just a way to cut your expenses… it can also be a source of income!

There is a growing market for tiny home rentals. People see these as an exciting way to try something new (sort of like staying in a treehouse or bubble).

Sites like Try It Tiny, mentioned above, allow you to list tiny houses for a period of time. This means that if you don’t live in your tiny home full-time, or need to travel out of town, you can list it for income. Similar to listing your home on Airbnb, this can be a great source of regular income.

Living in a tiny home also allows you to live small while listing your larger home. Some people see this as an opportunity to pay off their mortgage through full-time tenants or Airbnb guests, while living small or even traveling the world.

Other Reasons to Go Tiny

There are a few other, excellent reasons to go small. A tiny home offers opportunities for convenience and saving money other than just minimizing your abode.

For instance, you can use a tiny home as a guest house on your property. This is subject to your local zoning laws, but could be a great way to add extra living space for visitors – such as friends or your in-laws – without building onto your home or buying a larger house.

You could also use a tiny home on your property for loved ones. If you have an aging parent who doesn’t need round-the-clock care but needs to be close by, a tiny home might be the perfect option for them. It could also be used for a college kid or even a special needs child who needs a sense of independence but isn’t quite ready for their own, separate home. (As the mom of a child with autism, this is something I may even consider in the future!)

If you’ve decided to go green and eliminate toxins from your life, building a full-size home (or changing out your existing home) can cost a fortune. A tiny home allows you to build exactly what you want – with as small of a footprint as desired – for a fraction of the cost.

How Much Can You Save Living in a Tiny House?

Tiny living has the potential to cost a lot if you want it to, at least. As in the example above, there are small houses that cost half a million dollars. You can certainly go big when you decide to go small!

Overall, though, living in a tiny home is an incredible way to save on expenses, both monthly and over your lifetime. If you want to eliminate the cost of a home (for hundreds of thousands of dollars), cut down your monthly utilities, reduce clutter, and live simpler, a tiny home may be the perfect option. This lifestyle can get you out from under a big mortgage to help you save money, pay off debt, and even retire early.

It can even be a source of income, giving you a flexible option for a fun side hustle. Plus, whenever you want to use your tiny home for traveling the country, you can.

Have you made the switch to tiny living, or considered it? Let us know in the comments below!


  • Stephanie Colestock

    Stephanie Colestock is a respected financial writer based in Washington, DC. Her work can be found on sites such as Investopedia, Credit Karma, Quicken, The Balance, Motley Fool, and more, covering a range of topics such as family finances, planning for the future, optimizing credit, and getting out of debt.