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Millennial Money:

Artist making about $12,000 a year owns the tiny home that he built. How can he sustain this long-term?

In our Smart Money series, #MillennialMoney, the Star’s Evelyn Kwong asks people to record every penny they spend in atypical week. Then, using tips from a financial adviser, we challenge them to cut their spending the following week so they can save more money. Will they fail or succeed?

At 34 years old, this Canadian millennial is debt-free, owns his own tiny home and is earning just $12,000 a year.

How is this possible?

Michael Bartz and his partner, Sara, live in Lethbridge, Alta., in a tiny home that he built, situated on a farm where they don’t pay rent or a mortgage. In exchange for their living arrangement, the two work as casual farm hands.

To build the tiny home, Bartz saved $25,000 toward the build and did all the work himself when he was still on a salaried job. Over the four years it took to get the tiny home together, Bartz invested an additional $15,000 to get his spot up to speed.

Aside from mowing lawns, pruning trees and doing odd jobs on the farm, Bartz is also a part-time actor and podcast host and producer promoting environmentalism.

In terms of living expenses like food, Bartz and his partner are also very frugal. “Making lunch at home is the norm,” he said. On the extremely rare occasion they go out to eat, they’ll grab pizza or sushi. Dinner is where Bartz’s frugality gets to “epic levels.” “I’ve gotten my dinners down to $1 per meal,” he said. In terms of weekend activities, Bartz will go hiking, which he admits does cost some gas money. Still, “it’s pretty cheap entertainment,” he said.

So, what are his saving goals? “Currently I’m prioritizing living as an artist, and as my income varies from month to month, I try to save as much as possible just to keep my lifestyle going,” he said.

Long term, if he’s able to keep saving, he hopes to buy land of his own.

To get a better idea of Bartz’s day-to-day life, we asked him to share a week of expenses.

The expert: Jason Heath, managing director at Objective Financial Partners Inc., on Michael’s future.

Michael and Sara have carved out the life they wanted by building a tiny house and living off the grid, doing the work that fulfils them.

Michael saved up the cash to build his tiny home. If you build a tiny house on land you own, you can probably take out a construction mortgage. In their case, the tiny home is located on land they have arranged to use in exchange for work, so traditional bank financing would not likely have been available to them.

It sounds like Michael and Sara are not saving right now but have savings from past jobs. If they were able to put away a little extra, their incomes are likely too low to benefit from RRSP contributions that are better suited for saving tax at higher incomes. TFSA contributions would be best.

Michael has a pension from past work that will help with retirement income. They will not be accumulating much Canada Pension Plan (CPP) entitlement because this pension is based on contributions tied to your income. But Old Age Security (OAS) pension is based on residency in Canada.

Their methods may be extreme, but could give others ideas about how to better budget.

How he thinks he did: Having lived in a tiny home, being as frugal as possible about daily expenses, Bartz said that his Week 2 spending wasn’t that different.

Take-aways: Receiving the advice and hearing that the adviser was “pretty impressed,” Bartz’s main takeaway from this exercise is how his way of living could help others reconsider their housing situation.

However, he does recognize that the long-term viability of living in a tiny house is something people must consider.

It’s why he recognizes that having more savings, even when he’s not paying rent or a mortgage, can be beneficial.

Finally in terms of his pension, he found it “very helpful” to get a clear breakdown of exactly what they’re saving.

ARE YOU A MILLENNIAL LIVING IN TORONTO OR THE GTA WHO NEEDS HELP WITH SAVING YOUR MONEY? BE A PART OF #MILLENNIALMONEY AND EMAIL EKWONG@THESTAR.CA SCAN THIS CODE TO READ PAST EDITIONS OF MILLENNIAL MONEY.

BUSINESS

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2022-01-17T08:00:00.0000000Z

2022-01-17T08:00:00.0000000Z

https://torontostar.pressreader.com/article/281809992263848

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