Hopefully the below details might provide a little research assistance for others and perhaps solicit more feedback. I’m breaking the topic of budgeting for fulltime RV living out in three blog posts. This first part provides a little background on how Karen and I progressed through the process. The second part will include our anticipated start-up costs to purchase a trailer and truck. The third post will include our anticipated first year expense budget by line item with comments about each expense item.
Part One – Background Comments of Importance
Our budgeting process started on September 10, 2014 when Karen and I decided to spend our future in an RV. Back then, we planned to take off in 2023, but like so many others, moved the date up. For us to leave earlier required taking a closer look at finances and placing a degree of faith in what others had been experiencing on the road in terms cost.
A month later, in October of 2014, I had completed a search for fulltime RV budgets. Anyone that has researched the topic for more than a few hours quickly learns there are many styles of travel and each has its associated costs. I discovered RV forums and found many new friends willing to share information. Karen and I talked and came up with what we think will be our form of travel. Over the years we have somewhat fine-tuned our expectations. Today, our plans would look like this; Spend the first year moving around more often than in future years and not lock ourselves in, budget wise, to volunteering or workcamping to reduce expenses. After the first year we might “settle down” a bit. This seems to be a common theme. You have to start somewhere and for me that was reviewing Howard’s years of actual costs over on the RV Dreams website. I also found Kirk and Pam over on the Escapees RV Club forum. Averaging their budgets became the starting point for ours. Since then, like others, I read blog posts for current actual costs and comment back and forth on blogs and in forums for more specific questions.
By November of 2014 I began taking a closer look at more detailed financial planning which mostly considered income sources. It did not take long to discover that healthcare expenses would be of greatest concern and I’ve been reading everything I can regarding the subject. When we move along in our future RV Karen will be eligible for Medicare about nine months later and I’ll be providing my own health insurance. Today, healthcare cost remains a big concern and fortunately we both currently have no big medical issues.
Finances became the guiding light in establishing our new take off date of November 2019 and required we save to retire early. A side benefit of taking years to plan was for the most part we stopped buying anything we could not easily sell, use in an RV, throw away or give away. That really helped reduce expenses. I also kept a side job for added income which became a job I’ll be taking on the road and requires about 10 hours of my time weekly.
I decided to budget two ways. One for initial start-up costs and second a budget for annual expenses.
Coming up with a budget for our RV and truck start-up costs has really helped reduce the number of trailers we considered and is a great starting point in your own search. I included everything in the RV and truck budget that makes up these start-up costs to include sales tax and licensing. So those will not be part of our first-year expense budget. Over a year or so, I modified the RV and truck budget to meet our expectations once we had a better idea of what these things cost at the price point we found ourselves drawn to.
A long time ago a wise man, who was the budget officer of a major corporation, told me there are two words that make up a budget. And as one goes along they may find themselves adjusting the numbers for good cause. He said that’s why they call it a “budge it.” Of course, these revised estimates had to become part of our financial planning as the money does not appear out of thin air, especially if one wishes to remain debt free. For those not overly concerned about being debt free on the road and earning there way as they go, check out the Camper Chronicles blog. I’ve been following Lee and Tracy Perkins since January of 2015. So far, they are proof it can be done. Although their form of travel (lifestyle) is not ours, their example surely does provide one of many backup plans.
All I’ve written about so far has to do with our budgeting plans leading up to the day we take off. The picture is not complete unless I mention an exit strategy once we decide to come off the road. Yes, I know planning that far out cannot be done with 100% accuracy and there is much that can and will change. If we were able to make this lifestyle a permanent change the planning would be easier but that’s not practical. In comes having remaining finances to make a big change later. So, I decided to use six years as our expected time on the road. Sure, our time on the road could end earlier and sure it could end later.
Regardless there will be major expenses to consider, such as buying/renting/financing a new home whether that be a replacement RV/truck or not. For us, we found a way in our financial planning, for the most part, to leave most of our retirement savings alone and a chunk from the sale or home. The sacrifice will be having to work on the road or volunteer at times for a minor portion of our expenses. Planning takes the fear out of the unknown. So we have a plan A, B and C. Things change and having backup plans we are willing to do has taken the fear out of this for me and Karen. Although for the most part she trusts my opinion and lets me figure out the financial portion on my own. Karen and I have talked about what each of us wants in our future lifestyle. There are no compromises that we are both not willing to take together. We both appreciated a comment from Sharon and John of the On the road of retirement blog. They both agreed that if one or the other wanted to come off the road they would give six months’ notice. We met with the bubbly couple here in Kansas City back in June of 2016.
Thank you to everyone we have meet over the past three years in-person and online for all your advice and friendships. You are good people and set great examples of how to make the fulltime RV lifestyle work whatever one’s expectations might be.
Part Two – Initial Start-up Cost for Trailer and Truck
To complete the budgeting process I think it will be appropriate to explain what has become our needs and wants out of a trailer and truck. I’ve posted several times in the past on the subject and over time changed our financial planning to meet the changing budget. There are so many ways to get started on the road and a lot of opinions to go with it. I’ll give you the background and the reasons we are using in this next blog post.
Part Three – Draft Expense Budget and Details by Line Item (coming soon)
In following other’s examples, the last portion of this three part series will include our detailed first year expense budget and plenty of comments about each line item. I’ll do my best to draw from earlier blog post or research to cover some of the thought processes that went into each expense item. Hopefully helping other’s out that are just getting started and soliciting comments from them or those more experienced.
There are many sources out on the internet that provide a template to get started. For me, I decided to copy, buy, borrow other’s work as a starting point. I’m handy when it comes to spreadsheets. But decided to purchase John Hinton’s work from the On the road of retirement Blog. Budgeting for the Full Time Rv’er ebook comes with his spreadsheet. John writes about expense categories and included them in the spreadsheet.