I recently surpassed a big tiny house savings goal – there is now over $11,000 sitting in my tiny house savings account!
I tweeted about the milestone, and the personal finance community that makes up the majority of my followers was incredibly supportive. One of them asked a question I had been dreading having to deal with. The wonderful Brittany Brolley from The Rinky-Dink Life said:
“Yay! Do you have a projected timeline?”
From behind the safety of my screen, I felt guilty. Guilty because I knew I should have a timeline, but I didn’t. There are two main reasons why, despite a budget and design plans, I haven’t yet taken the plunge to write a timeline.
1) My Middle Name is Impatient (and Afraid)
I want my tiny house now. Actually, I really want it yesterday. I know that if I write a timeline, it will give me a concrete date of when that dream can become a reality. And, it’s not going to be ‘soon enough’. You see, I am a terribly impatient person. Once I decide I want something, I want it immediately. Whether it’s food in a restaurant or a life-changing alternative housing solution – I hate waiting. Maybe this has to do with the fact that I take a long time to make up my mind and make a decision about something. So, by the time I have decided what I want, it feels like I’ve been waiting for ages already.
At the same time, it is terrifying to want something. Or, even admit that I want something. Because then, by consequence, I have something to lose. This blog has become a space of accountability for me in my minimalism journey. If for whatever reason, my tiny house dream does not become a reality, I would probably be devastated. I’m not proud of my level of attachment to this dream of mine, but, that’s the reality of it.
2) Numbers are Scary
I grew up in a family where money wasn’t talked about – it was yelled about. Neither of my parents is particularly good with money, and, while I’m getting better, I did use to follow in their footsteps. There is something about putting hard numbers on paper that makes me nervous. Some people would probably love the accountability that comes with sharing their savings plan for a big goal.
But, I know myself pretty well and I will be guilt-ridden and feel like a failure if I ever don’t meet my savings projections. In my mind, if I never make it public, I can never fail.
I also know a plan is something I need. I need to to know the financial reality I am in. Seeing where my timeline puts the tiny house dream will help me determine if that’s a timeline I can live with or if I need to amp up my savings game to fast-track the timeline.
My Tiny House Savings Plan
Going back to April of this year, I’ve been contributing $250 per paycheque (or $500 a month) to the tiny house fund. This is in addition to the $500 a month I’ve been contributing to my RRSP. This works out to 35.8% of my take-home pay. Which, for reference, is under $40,000 a year. That’s really not too shabby and I am grateful that I have the ability to save as much as I do. I know that isn’t everyone’s reality and I certainly don’t want to take my ability to save for granted.
Our tiny house budget is $50,000. With $11,000 already in the bank and a monthly savings contribution of $500, it will take me 78 months to reach my goal. That’s a lot of months, 6.5 years worth, to be exact. That means I won’t have the funds to buy or build a tiny house until at least 2022 (when I’m 32).
That’s a major reality check. And, kind of a major bummer.
So, I’m left with two options. Either I can accept the timeline and look forward to 2022, or, I can increase my contributions to accelerate the timeline.
Option 2 Please!
Since I do not want to wait 6.5 years to make the tiny house dream a reality, I’m going to have to increase my contributions.
I’ve run the numbers (which I won’t bore you with here), and it looks like I’m going to be able to double my monthly tiny house contributions. Double. From $500 to $1000.
Well, it’s not like I’ve increased my earnings or found a bunch of change in my couch cushions.
The first part of this equation involves rerouting $100 per paycheque ($200 a month) from my RRSP contributions into the tiny house fund. It’s obviously not ideal to reduce my RRSP contributions, but, it is only temporary. Plus, I make less than $50,000 a year, which tends to be the point when most financial experts suggest you start contributing to an RRSP (for the tax deferment benefits).
So, with that extra $200 a month, my tiny house contributions increase to $700 a month.
The last $300 will come from the surplus left over after my non-negotiable expenses are covered (rent, phone, insurance, groceries and Netflix). Even with the increase in savings, I’ll still be left with an almost $300 safety buffer. That’s a buffer I think I can live with, in case of unexpected expenses.
With these new numbers, I’ve cut the timeline in half. Now, instead of having to wait 6.5 years (or until 2022 for the tiny house), I’ll only have to wait 3.25 years (or until 2020). This also brings my savings rate up from 35.8% to 46.5%. It’s no Half Banked, but, it will have to do!
So, there you have it. I’m going to put $1000 a month towards my tiny house dream. What a scary thought. I’m not entirely sure how this is going to go. There will almost certainly be growing pains. This is obviously just a plan. And plans can be broken or tweaked to better suit my circumstances. If I find $1000 is too tight for me right now, I will lessen it until I can live with it and not feel unnecessarily deprived in other areas of my life.
But, I know I need to try to contribute the maximum for at least a couple of months.'A tiny house has been my dream for years. It's time my finances start acting like it.' Click To Tweet
What do you think? Is my plan too ambitious? Not ambitious enough? Are you saving for something in particular right now? Let me know in the comments!
Image Credit: Tiny Ambitions