June 20, 2024

Millennial Money is a weekly submission-based series that provides financial advice to millennials. Read the full series here.

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?

“I’m in a unique position. Although it’s not a conventional house, it’s still an accomplishment that many millennials aspire to,” Michael Bartz said. “I’m walking the talk when it comes to environmentalism … I think a lot of millennials would resonate with my story.”

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. “I also sold anything I didn’t need to raise money,” Bartz added.

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. “All cash. No loans or debt went into the house,” he said.

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.

“During harvest we were very busy, but winter is very slow. Around that work, I apply to casting calls, audition for roles, and go to various film and theatre bookings,” Bartz said. “Sometimes that means one afternoon of filming a commercial, but other times I might be on set for weeks at a time.”

The podcast for Bartz is also a big focus at the moment. “I’ll be reaching out to guests, recording interviews and promoting the show. Part of my work is also applying for grant funding for the various projects I have on the go,” he added.

In terms of living expenses like food, Bartz and his partner are also very frugal. “Making lunch at home is the norm. If I’m out and about I almost always bring a lunch, usually a sandwich and some fruit,” he said. On the extremely rare occasion they go out to eat, they’ll grab pizza or sushi.

On set, Bartz generally gets catered meals, but on a recent gig he found himself covered for only lunch. “Most of the cast ate at a cute little cafe in the town we were staying in, but I opted for hard-boiled eggs, which I cooked ahead of time, and oatmeal heated on my little camping stove, and some fruit,” he said.

Dinner is where Bartz’s frugality gets to “epic levels.”

“I’ve gotten my dinners down to $1 per meal, with the dish including carbohydrates, meat protein and plenty of vegetables. This is accomplished by cooking in bulk,” 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.

Before Bartz became an artist, he worked at a post-secondary institution. “I have a small pension from them and some savings I was able to tuck away while I worked there,” Bartz 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. Their experience can give others ideas about how to do the same.

The fact they can make a $1 dinner that includes carbs, meat protein and plenty of vegetables is pretty impressive. Cooking in bulk like they do also saves time. By cooking 10 portions for $10 and freezing the bulk of it, they have meals that are mostly prepped and save all kinds of money on their grocery bills compared to most families.

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. A lifelong or long-time Canadian resident is entitled to $642 per month currently — that is $7,707 annualized. The pension is indexed quarterly so generally increases slightly every three months to keep pace with the cost of living. If Michael and Sara can currently live off $12,000 per year, their OAS pensions will likely exceed that in the future (adjusted for inflation). However, there could be future costs like repairs to their tiny home, new cars, and especially health-care costs in retirement that make living off OAS in retirement a difficult feat to achieve. After all, a tiny home may not be the ideal place to live as they age and their mobility becomes more limited.

Regardless, their story is a good one to prove it is possible to live frugally and happily. Their methods may be extreme, but could give others ideas about how to better budget if that is something they need or want to do.

Results: He spent less. Spending in week 1: $200. Spending in week 2: $99

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 compared to the previous week wasn’t that different.

“It similar to last week. I spent a little on groceries, but that’s about it,” he said.

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.

“My frugal strategies are worth sharing, and could help people live like we do, or just be in a better financial situation,” he said.

However, he does recognize that the long-term viability of living in a tiny house is something people must consider. “If in 30 years we don’t want to live in a tiny house, or for health reasons we cannot, then we need to plan for what that might look like and what other expenses may present themselves,” he said. “Medical costs is a great example.”

It’s why he recognizes that having more savings, even when he’s not paying rent or a mortgage, can be beneficial. “It will obviously make the transition easier.”

Finally in terms of his pension, he found it “very helpful” to get a clear breakdown of exactly what they’re saving. He’s now starting to think more long-term to make sure they can tap into resources if they need to.

“I know it’s easy to put off retirement until it’s right around the corner. Thinking about it now, and contributing regularly, is a good practice, regardless of your income level. Even if it’s a small amount, I will start contributing to my TFSA again,” Bartz said.

Overall, he is happy to live in this unique situation.

“My “extreme” frugality is mostly out of necessity to pursue the creative endeavours I find important, and is hopefully a temporary state. I would be more than happy if over time I had a more comfortable income from the arts. But if that’s not the case, I’m fine to live this way for the long-term.”

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