How Major Downsizing Made Me A Happier Person

Illustrated by Elliot Salazar.
By Ethan Waldman, as told to Meghan Rabbitt

My quest to start living in a tiny house wasn’t borne out of a need to downsize or drastically cut expenses, although both happened as a result. Rather, it fit into a larger game plan of mine: to have a more flexible lifestyle that would keep me from being chained to a desk all day.

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It all started in the fall of 2011, when I took a month-long sabbatical from my job and life in Vermont in order to ride my bike from British Columbia into Washington State and along the Oregon coast. At the time, I was working for a corporate tech-training company, creating online courses and aids that helped employees learn software. It was a good job, and I worked with wonderful people. But, I hated being stuck in a cubicle, and riding through such a scenic part of the country made me realize I needed more time to enjoy life.

On top of that, I’d always wanted to work for myself. I remember my manager once asked me where I saw myself in five years. She thought I was management material, but I honestly told her I wanted to start my own business. So, when I got back from my sabbatical, I knew it was time to speed up that five-year plan — but I needed to get my ducks in a row first.

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Illustrated by Elliot Salazar.
I went on the bike trip with my cousin, and all along our route, we camped and couch-surfed to save money. Some of the people who took us in or let us pitch tents on their property lived in tiny houses. These homes only had a few hundred square feet of living space, but were designed to be as sturdy as traditional houses. I thought they were cool, but it didn’t occur to me to build one of my own until I decided to quit my job. 

I knew my income would vary greatly as I launched my own business — and rent and utilities were my biggest financial burden. If I could reduce the $750 I paid in rent (my portion of a two-bedroom house that I shared) and $250 in utilities (cable, Internet, and high heating and electric costs to run that big house), it would mean a lot more breathing room. If I built a tiny house, I could live rent-free and seriously reduce my utility bills.

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But, I’d have to first save up to build my tiny house. I estimated it would cost me about $20,000 for the materials and design plans — but I only had about $5,000 in savings. I was making $60,000 a year, and while I never got into credit-card debt, I pretty much spent what I earned. But, now I had a goal to work toward. I called it my “tiny house fund,” and I began funneling as much money into it as I could.

The first big chunk that went into the fund was my $8,000 year-end bonus. I also generated a little side income by doing tech consulting work, which would eventually evolve into my business. And, I temporarily stopped contributing 5% of my pay toward retirement, with the intention of saving again once my goal was met. I also moved in with my girlfriend, Ann, to save money on rent; we joke that she was my “tiny-house sugar momma." I sold a couple of my old guitars and limited my expenses to only what was absolutely necessary. Ann called this my “hobo mode.”

Cutting out even the small luxuries helped build up my fund, little by little. For example, rather than eat out, I’d put that $60 into savings — it was so satisfying transferring money from my checking account to my tiny-house fund. My strategy paid off: By March 2012 I gave several months’ notice at work, knowing I’d reach my savings goal soon. And, by June, I hit the $20,000 mark. Before I left, my boss asked if I’d be willing to take them on as my first consulting client. Not only was I ready to start my new life; I already had business lined up!

After my last day at work, I drove straight to an empty airplane hangar in my town of Morrisville, VT, to pick up a 22-foot-trailer loaded with about $1,000 of lumber. Next stop: a plot of land on my cousin’s property, where I could start building my tiny home. In exchange for helping to maintain the grounds, he agreed to let me live there for free.

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Illustrated by Elliot Salazar.
Although I had bought ready-made plans for my home, I never ended up using them, because a family friend who owned a design firm thought he could do a better job — and offered to do the work pro bono. He helped me to envision the tiny house I really wanted, while working within some pretty limiting parameters. For example, in order to keep the house on my cousin’s land without paying property taxes, it had to be on wheels, and it couldn’t be taller than 12.6 feet — in order to clear bridges, overpasses, and electrical wires.

I had also underestimated the cost and difficulty of building the home: The materials exceeded my estimates, and I quickly realized I couldn’t build it alone the way I originally planned. So, I hired a carpenter to help. All told, these added another $22,000 to my bill. Luckily, I could afford it, because I was already making money from my new business — plus, I was still living with Ann rent-free.

In November 2013, construction was finally finished, and I moved into my 200-square-foot house. With no mortgage and no debt from the cost of building the home, my only real expenses became my utility bills — and those are a fraction of what they used to be.

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I have no water bill, because I’m connected to a spring. And, even this past winter, when Vermont was covered in snow and experienced record-low temperatures, my energy bill averaged just $30 a month when I used propane to heat the house, and between $100 and $150 when I used electricity. During the summer, the house uses almost no energy.

My tiny home has benefited my girlfriend, too. She grew up in Vermont and has always romanticized having a cabin in the woods. Because we split our time between her place and mine, she decided to rent out the extra bedroom in her condo — which means extra income for her every month.

To be sure, I’ve had to make some sacrifices. A big one is not having the everyday convenience of a washer and dryer in my house. And, not being able to host a lot of guests at once can be frustrating at times. But, I consider these small trade-offs for what I’ve gained in return.

Illustrated by Elliot Salazar.
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For a lot of people who build tiny houses, it’s all about leaving a small carbon footprint. But, for me, it’s much more than that. My tiny house enabled me to launch my own business, which gives me a newfound flexibility I never had while I was working for a company. I’m doing work that I love — and on my own terms.

Now, I can take a day off whenever the snow is right for skiing — something I did plenty of last winter! I recently took kite-surfing lessons, so I can surf on Lake Champlain this summer. And, guess what? Between my consulting work and sales of Tiny House Decisions, a book I wrote to help other people understand what goes into building a tiny home, my income is the same as what I was making in my old day job.

Plus, since I don’t have to pay rent or a mortgage, I have more wiggle room to spend and save on the things that make me happy. For instance, I’ve built up about $5,000 in emergency savings, am contributing 10% of my pre-tax salary to retirement, and have other small savings goals I’m working toward, like a new-car fund. I’m also able to travel more often and visit family and friends without worrying about what it will do to my budget.

The process to build my tiny home wasn’t always smooth, and there were times when I felt overwhelmed by all of the decisions. But, I can confidently say that downsizing my life in this way was worth it. Ultimately, what my tiny house gave me was financial freedom in work and in life — a bigger payoff than I could have imagined.

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