1. Small, enclosed spaces allow the inhabitant to define their world.
Tiny houses satiate our evolved instinct to make a nest. Little kids naturally build forts and other nests. Small, enclosed spaces feel calming because the walls form a defined world. Making a small world within our larger one is very calming.
2. Living your values.
Building a tiny house is an identity statement. It tells the world you're living your values of simplicity and kindness to the planet. It reinforces a positive self-perception of being independent and resourceful, but also being a little quirky and coloring outside the lines.
3. Simplicity and limited choices.
Having limited 'stuff' (and limited room to accumulate additional belongings) reduces willpower drain from organizing, managing and making decisions about a large amount of stuff. Everything from what to wear, where to sit, and what appliances to use to cook dinner is simplified.
In a tiny house, everything tends to have a designated place where it lives when not in use. Less time is spent looking for missing items etc.
Space-saving requirements often mean the houses contain clever and aesthetically pleasing design elements, which can be a source of pleasure and calm.
4. Enjoying the fruits of your labor.
Many people who build tiny houses design and/or build the house themselves. In doing so, they get to enjoy the psychological benefits of a quest, and taking their project through all the stages of idea, plan, and execution.
5. Portability and freedom.
Many people build tiny houses on trailers that can be moved anywhere. Although tiny houses are physically small, any sense of being constricted is offset by the freedom of much lower living costs (not feeling like you're working only to pay for your home and associated bills) and being much more mobile.
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