The Power of Financial Planning in Tiny home Living
These fictional stories celebrate the triumphs of tiny living and the financial independence that could be gained with the help of professional financial planning.
Liz: “The New Chapter Traveler”
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The Harrisons: “The Small Barndominium Family”
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Bob and Linda: “The Retired Trailblazers”
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Liz:
“The New Chapter Traveler”
Liz is embarking on a newly-single chapter of her life and is both excited and a little anxious about her idea of selling her home and seeing new places with a tiny house on wheels. She is in her late 50’s and no longer sees value in having a larger home with so much upkeep. Her children rarely visit her there, and finding someone to help her when something goes wrong has become a big hassle. Liz has also recently contemplated starting her own consulting firm after years of corporate dedication. She has given a lot of her focus to her career in management but is feeling unfulfilled and would like to be able to do some consulting while getting involved in a non-profit organization that she cares about. She also wants to be able to be part of her adult children’s lives even as they move around for work or when and if they expand their families.
Seeking Independence and Connection
Liz’s desire to be both self-sufficient and also involved in the lives of her family members led her to the idea of tiny living. She is not alone. 55% of tiny home owners are women. This choice allows women to downsize to a more manageable footprint while also prioritizing important relationships wherever they are. It is enabled by remote or hybrid work and reduces the financial burden, allowing for a rebalancing of priorities in middle age.
Navigating So Much Change at Once
Liz found that whenever she thought about all the changes happening on top of each other, she felt anxious and unable to execute on her plan, despite it sounding so perfect. She was unsure how much cash she needed on the side to make the career transition, how she could buy her tiny house before selling her home, and what people might think if she made so much change immediately following her divorce. Despite all of the confidence she has built through her career, she finds herself in uncharted financial territory, unsure of how to navigate toward the lifestyle she wants.
Traditional Financial Planning Wasn’t the Answer
Liz was working with a financial advisor provided by her corporate employer, but she felt that the advice she often got was only about money management. She needed a financial planner who could help her feel confident enough to take action and who would guide her steps as she embarked on this new chapter.
The Solution: Hire a CFP® Professional
Recognizing her unique needs, her new CFP® financial planner stepped in to create a customized financial roadmap for Liz. Her new financial planner undertook several strategic steps:
She conducted a comprehensive analysis of Liz’s net worth, including savings, investments, and home equity.
She determined the amount and best source of cash for Liz’s career transition ramp-up and tiny house purchase.
She developed financial projections, allowing Liz to feel confident that her next chapter would allow her to remain financially self-sufficient.
She pointed Liz toward resources like tiny home builders and parking planning.
She offered strategies for supporting Liz’s career transition, like business tax and accounting, health insurance, and networking.
Financial Security and the Confidence to Change
By partnering with a qualified financial planner, Liz was able to secure the following results:
She overcame her anxiety and got excited about this opportunity to create a new chapter that she loved.
She transitioned her career from corporate to consulting without having to take jobs that didn’t align with her core competencies.
She found the ideal size tiny house on wheels and planned an agenda for her travels between family and other places she wanted to explore.
Her long-term financial security was reaffirmed and Liz started to envision a larger impact with a leaner cost of living.
With her life change concerns addressed and her future secured, Liz can now schedule her time based on her priorities: her family, her career and making an impact without having to compromise.
Note: We protect our clients’ personal information. This hypothetical case study does not involve an actual The Tiny House Adviser, LLC client. No portion of this content should be construed by a client or prospective client as a guarantee that he or she will experience the same or a certain level of results or satisfaction if The Tiny House Adviser, LLC is engaged to provide investment advisory or financial planning services.
The Harrisons:
“The Small Barndominium Family”
Tom and Kate Harrison were living the traditional suburban dream with their two school-aged children. Tom, a 42-year-old corporate executive, and Kate, a 39-year-old part-time teacher, had spent years building a comfortable life. However, they realized that the dream was starting to feel more like a hamster wheel. They were tied to a mortgage that would take 26 more years to pay off and a lifestyle that left them little time for what they truly valued—outdoor adventures with their kids. They made the decision to change course and choose an affordable and lovely barndominium outside of town as their new home after learning that 55% of tiny house dwellers have more savings than the typical American.
Early Retirement and Entrepreneurship
Two main objectives drove their decision to downsize. First, they wished to make work optional much earlier than traditional retirement age. Second, Tom wanted to quit his corporate job and start his own business, a dream he’d held for years. The freedom of a work-optional lifestyle, combined with the personal fulfillment of entrepreneurship, was an enticing prospect.
The Financial Quagmire of Transition
Despite their clear vision, several obstacles stood in their way. Their current lifestyle was tied to a hefty mortgage and the financial stability of Tom’s corporate job. Tom’s decision to leave his job meant losing their primary income source and their health insurance—a significant risk with two children. Moreover, they needed to fund the purchase of the barndominium and set up Tom’s business. The transition seemed fraught with financial challenges.
Traditional Financial Advice Fell Short
They sought financial advice from traditional sources, but these were designed for conventional lifestyles and retirement timelines. The advice lacked the flexibility and creativity needed to realize their unique vision. The Harrisons needed someone who could understand their specific needs and develop a tailored financial strategy.
The Solution: Hire a CFP® Professional
Understanding the Harrisons’ unique goals and challenges, their new CFP® financial planner provided a multi-faceted solution:
She assessed their financial situation to streamline expenses, freeing up funds for their transition.
She guided them on obtaining health insurance outside of a traditional employer plan, ensuring the family's health needs were covered.
She developed a financial strategy to fund the purchase of the barndominium and the setup of Tom's business.
She established a robust savings and investment plan to jump-start their financial security.
She created a work-optional retirement plan, providing them with the flexibility they craved.
Financial Freedom and a New Lifestyle
The Harrisons achieved remarkable results through their partnership with a qualified financial planner:
They transitioned to the barndominium, freeing them from the financial and time constraints of their previous lifestyle.
Tom successfully launched his own business, achieving his long-held dream of entrepreneurship.
They established a work-optional lifestyle, providing them with more quality time as a family.
With their financial worries addressed and their new life in full swing, the Harrisons are now enjoying the freedom and fulfillment they had envisioned. They have more time for hiking adventures with their kids, and they have peace of mind knowing their future is secure.
Note: We protect our clients’ personal information. This hypothetical case study does not involve an actual The Tiny House Adviser, LLC client. No portion of this content should be construed by a client or prospective client as a guarantee that he or she will experience the same or a certain level of results or satisfaction if The Tiny House Adviser, LLC is engaged to provide investment advisory or financial planning services.
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Bob and Linda:
“The Retired Trailblazers”
Bob and Linda, both in their late 60s, are part of a unique demographic of retirees: those who have already made the transition to tiny house living. This baby boomer couple, formerly school teachers, are among the 40% of tiny house owners in the U.S. who are over 50. Their primary goal was to navigate their retirement years comfortably in their tiny house, ensuring they managed their healthcare costs effectively, stretched their retirement savings, adjusted to a fixed income, and planned for long-term care without using home equity.
Sustaining their Retirement Lifestyle
Their golden years were meant to be a time for relaxation and the pursuit of hobbies they loved. However, they realized that managing their finances would be the key to maintaining their chosen lifestyle. They wanted a financial plan that would allow them to live worry-free in their tiny house for the long term.
Managing Finances in Retirement
Though Bob and Linda had already embraced the tiny house lifestyle, they were faced with the challenge of managing their finances effectively in retirement. Their fixed income, healthcare costs, and the need to stretch their retirement savings were all sources of concern. Additionally, they needed to plan for long-term care without relying on home equity, a common fallback for many retirees.
Traditional Financial Planning Wasn't Enough
Initially, they tried to navigate these issues using standard retirement planning methods. However, these approaches were not designed to address the unique financial concerns of retirees living in tiny houses. Traditional solutions seemed to fall short, and they needed a plan customized to their lifestyle.
Solution: Hire a CFP® Professional
Their new CFP® financial planner brought a tailored solution with her ongoing financial planning service, during which:
She developed a sustainable financial plan to ensure their lifestyle could be maintained on their retirement income.
She optimized their investment strategy to provide a reliable income stream.
She worked out healthcare management strategies customized to their unique circumstances.
She created a plan for long-term care that didn't depend on home equity, ensuring their ability to age in their tiny home.
A Worry-Free Retirement
With their qualified financial planner’s guidance, Bob and Linda achieved their financial goals.
They have a sustainable financial strategy that ensures their lifestyle will be maintained throughout their retirement.
Their optimized investments provide a steady stream of income.
They have a comprehensive plan for long-term care.
Now, they can fully enjoy their retirement, secure in the knowledge that their financial affairs are in order. This freedom allows them to focus on enjoying their passions and living out their golden years with the peace of mind they have always desired.
Note: We protect our clients’ personal information. This hypothetical case study does not involve an actual The Tiny House Adviser, LLC client. No portion of this content should be construed by a client or prospective client as a guarantee that he or she will experience the same or a certain level of results or satisfaction if The Tiny House Adviser, LLC is engaged to provide investment advisory or financial planning services.
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