Final Results 2020 RV Living Expenses and Financial Decisions

I was finally able to complete an analysis of our 2020 RV living expenses after staying home during the rainy days. If you are building your budget there are a few words of caution and planning to pass along. If you are looking for a quick figure without reading the remainder of this post then we spent $48,754 before taxes last year which is $4,062 a month. After taxes the annual expense was about $45,502 or $3,791 a month. We no longer pay state income tax as we domiciled in Texas which has no state income tax. I treat planning for taxes as important as living expenses and income. We had extra income last year for various reasons which I put into retirement savings for tax purposes and a little in our extra travel budget for emergencies or special circumstances.

I apologize if I’m repeating anything from a prior post. If you have been following this blog for a while then you know our style of RV travel. For those that have not followed the blog I’ll summarize a few points below with our top six expense items.

Introduction

We were debt free before we started on the road and remain that way. We sold our home and most of our possessions using part of the proceeds to pay a portion of our new fifth wheel cost. We saved a sizable amount from our home sale in a taxable account. Fortunately, our home sold for more than I expected, thanks to Karen’s foresight in pricing it. We both agreed with the amount we have saved for our next “home” after RV travel. We budgeted $500 extra per month more than our actual income for our first year of travel and that money remains in an account having not been spent. We saved that extra travel money before I left fulltime employment as well as established an account to equip our RV and truck to include some upgrades. We still have money in that account as well despite replacing our truck the first year on the road. After more thought, I will get around to posting about replacing the truck along with my list of other “bad” stuff that might make you want to stop living in an RV.

Some will obviously spend more or less based on their own goals and available income or savings. I kept a part-time job doing bookwork and estimating for a construction company. The part-time job prevents us from having to use retirement savings to support our monthly expenses. The job does not take away from our RV travel experience as I work about 12 hours a week with control over when I work those hours. That said, I still consider us to be on a fixed income as the job is on a salary which is combined with my pension income and Karen’s social security which she took at age 62. I left fulltime employment at 56, feeling it was not worth staying longer for a better pension at 62 or 65. I had not kept a detailed budget in decades, always seeming to have enough income to support our standard of living. Going to a fixed income required I keep a budget which I’ll do again for 2021. If we don’t change our lifestyle after another year I’ll probably stop keeping a budget. I’ll bet a top concern for most when making a decision to leave a fulltime job or if they can afford to travel in an RV will be health insurance!

Perhaps just like you, we drafted our first budget based on projected income and then researched the average budget of several other RVers. Here is a link to my first research with references. Another good resource are Lee and Tracy Perkins at Camper Chronicles Blog. Or buy their e-book for $5 or paperback for honest and complete information about the lifestyle. I’m not paid a reward for referring them….

Top Budget Categories by Percentage of Budget

Groceries 25% of Expenses: We spent about $1,000 a month on groceries, having started out thinking we would only spend $600. Yes we are cooking at home more with the pandemic. We also have invited folks over for diner and enjoy hosting family cookouts. We also discovered the wonderful variations for shopping to include excellent, although sometimes expensive, stores in the 16 states we have traveled. This budget includes beer and wine! Almost forgot, this includes the dog’s food and treats.

Camping Fees 20% of Expenses: We started out thinking we would spend $787 a month or $25 a night when we actually spent $828 or $27 a night. We don’t travel on “vacation” away from the RV such as going to Europe. Our RV is 34’11” long and 13′ tall where we can still find spaces in state and Corp of Engineer parks where the camping rates are sometimes more reasonable. We don’t mind spending a week or a month in one spot for the discounts, especially if the place is a destination spot such as the Black Hills of South Dakota or where we are now in St. Augustine Florida. Our budget/income does not prevent us from traveling to places we want to visit. We don’t own any of the major discount RV club memberships such as Thousand Trails. Nor have we workcamped for a free spot, utilities or laundry. We do pay annual dues for: Escapees which handles our mail service, Passport America for 50% off campsites which we rarely use unless the parks are on our travel route, we still have a Good Sam’s membership which we first got for the half off RV shows. None of the discount RV travel services we have are usable for weekly or monthly stays which are already cheaper than the daily rates. I’m finding that generally using the military veteran discount or senior discount at parks easily could replace Good Sam’s or any other 10% off discount club. So far, we do not boondock or stay places for free while traveling such as Walmart parking lots. Sometimes we stay longer at camping spots that exceed our nightly budget but often find the fuel savings by not traveling offset at least a portion of the extra camping cost.

Taxes and Insurance is 11% of our Expenses: This category excludes health insurance and other medical costs. It does include about $271 a month in federal income tax and $216 a month for truck and RV insurance (fulltime RV living coverage) which includes roadside assistance. The category also includes truck and RV registration renewals which were $276 for the year in Polk County Texas.

Extras are 10% of Expenses: I don’t track every dollar we spend so this category includes whatever is unaccounted for. And if you travel with a spouse it’s a good idea to have money each of you can spend without having to report it for the budget results. We have a bank account with Bank of America which is linked to a Merrill account for investing. We are preferred members because of our balance and therefore they refund all ATM fees regardless of where we use the ATM. We also travel with a little cash for cases where the RV park requires it or we want some quick spending money.

Medical Insurance and Expenses were 7% of the Expenses: A portion of the year included both using a high deductible Obamacare policy. Eight months later Karen was elidable for Medicare which is $243 a month with supplemental plans. I still use Obamacare which costs me $24 a month. We have money set aside in a health savings account to cover the deductibles in case of a medical emergency. Neither of us have any on-going medical needs. We don’t have eye or dental insurance. The current 2021 budget amount is higher than last year at $388 a month total. Also, our plans are not eligible for health savings account deposits but we can still use what is in the existing account. This category includes doctor visit fees and prescriptions.

Fuel for the Truck is 6% of our Expenses: Yup, 2020 had some low fuel prices. I think we traveled as much as we wanted despite the pandemic. Our average monthly expense was $228 a month. The 2020 budget was $550 a month which I lowered to $414 a month in the 2021 budget. By the way, as of today we have traveled 8,516 miles in our RV. I keep track for scheduled maintenance. Our big powerful truck overall averages 14 to 15 miles per gallon. Ten when towing. This category includes diesel exhaust fluid (D.E.F.) which I’ll estimate to cost about two cents a mile depending on towing conditions and D.E.F. prices.

We do not own a second vehicle but I could see that in our future if we stay on the road long-term. Karen does not drive the truck which restricts her movement. This can be an issue and I’ll presume a reason others eventually purchased a second vehicle. Especially when parked for months in an area. Years ago, RV Dreams did a study on the cost for a second vehicle versus driving a big truck everywhere. They claim savings from not driving the truck everywhere offsets the operating costs of their Jeep. They also wrote getting a second vehicle was their number one or two best decision. Of course their travel style may be different from ours. Personally I would think it difficult to have someone follow you all over the country in the second vehicle, pay an extra fee to park it at a campsite or even having room in a normal RV camping spot for the second vehicle. All this may be a reason some tend to get the second vehicle after first spending years on the road. Others park it wherever they end up spending the most time and then drive it back and forth on shorter camping trips from home base. When the spouse does not drive big trucks might also be a reason to get a motorhome and tow something smaller behind it. We are thinking about renting a car at times for Karen.

And Equal at about 3% each of our Expenses: Eating out (average $139 a month), Entertainment (averaged $96 a month during the pandemic) and RV/Truck maintenance (averaged $139 a month). We have a heavy 2019 fifth wheel and 2019 diesel dually truck which have required no expensive repairs. Our budget includes all the lubricants and spare parts it takes to keep a rig maintained. Having a new puppy and the virus thing sometimes prevents us from eating out, although we are discovering outside dining. Fortunately what we like for entertainment happens to be less expensive. We will spend on tours in scenic places, shows and fun activities we may never get back to in our travels.

I’ll also mention our monthly expenses for phone and TV entertainment is 1.6% of our budget. We do not have satellite TV nor miss it. My job pays for my cell phone. We have a hotspot for cell data and the Winegard on top of the RV does a good job of picking up campground WIFI signals when available. We stream with Amazon Prime and have a larger DVD collection or take advantage of campground libraries. We spent weeks on the high plains of Kansas with no local television reception and a slim data connection. I’ll bet most spend more per month than we do in this category which is why I mention it.

2021 Planned Expenses

First and foremost, I don’t plan to ever let finances be an issue when we are on the road. There is just too much else that can go wrong without making things harder. Sometimes you just have to throw money at a problem to fix it which can including booking that expensive camping spot near a great place because you can’t find anything less expensive. I am also not the type to worry about saving ten cents a gallon on fuel by finding inconvenient places to refuel.

After a complete review of our expenses for 2020 I’m anticipating they will be higher in 2021 and not just because the pandemic is letting up. So right now I’m expecting to spend $49,716 for the year or $4,143 a month before taxes. As the year progresses we may be able to cut some costs. Knowing where we spend the most money is a good place to consider paying more attention.

What We Have Spent So Far Furnishing and Upgrading Our Home

As a side note, unrelated to monthly expenses, I thought I’d share what we have spent in the last two years upgrading and furnishing our RV. So far we have spent $6,048. I’ve got a spread sheet of what we spent the money on. If you want a copy email me at mseneker@hotmail.com. I also have another $7,700 listed in that spread sheet for dream upgrades such as improved suspension and tires, satellite dish (doubt we will get that), bikes and bike rack, disc brakes and more. Best guess is we will only spend another $600 unless we decide to stay on the road for a much longer period, for a grand total of $6,648.

I broke down upgrades and furnishings into priorities with one being stuff we needed to get started or were adding the first year and four being dream world items. As time went on during our early months of travel I moved a lot of priority one items to priority two, thinking we should wait and see.

Don’t buy anything you can avoid buying when you first get started! You will be tempted for sure.

Custer South Dakota – Final Two Weeks

We finished our month long stay in the Black Hills of South Dakota. Ya got to love not having to race back home or to work! We are currently staying along the sandhills of Nebraska on our way back to Missouri to see family. We will arrive in the Kansas City area on 10/4/20, then central Missouri the week after and finally near Joplin MO by 10/18/20 to visit more family along the way. Then on to Texas.

As usual I’ve got an RV topic to go along with the details of our trip.

(Update on Budget as of 10/26/20) I made some changes to the budget section of this report after further analysis. We completed our first full year on the road in August.  Someday I’ll get around to an interesting post regarding our first year. From a budgetary standpoint we are averaging about $3,558 in monthly expenses which includes income taxes, health insurance and everything else it takes to live.  Note that our truck and trailer are relatively new and have required less maintenance costs than one might expect from an older rig. As you know, there are many unique variables to consider when drafting a budget. I’ll write about the topic after the end of 2020. I’m putting this out now in case it will help in your research. Our budget does not include depreciation cost of the truck and fifth wheel. Included in the monthly average costs are; campsite expense $801 ($27 a night), grocery $966 and diesel fuel $226 a month on average. This has been a unique year with the virus thing. We are staying at more expensive parks with full hookups, groceries are way over budget (probably because we drink too much beer:) but we are saving a lot in truck fuel as the prices are very low and we are not moving around as much as expected.

During this summer trip, due to remote locations, we have had no over-the-air television reception for more than two months.  We canceled cable television a couple years before we went fulltime while living in our sticks and bricks, deciding to stream shows from Amazon Prime or YouTube or wherever. And in our RV we have no satellite and no plans to get one. We do have a Winegard Connect (Togo Roadlink) mounted on our roof which receives AT&T cellular data as well as WIFI signals from a campground system. And we have data plans on our phones (AT&T and T-Mobile) which we can use as hotspots to include linking the Winegard to the phone. Before we moved into the RV I took all our CD movies out of their bulky covers and placed just the discs in a book with sleeves.  We also enjoy reading and various hobbies at home. I purchased a Sony Playstation 4 about eight months ago.  Plenty to do without TV. 

On to the good stuff – Activities and photos from the Black Hills

Hiking to Beecher’s Rock

We got totally lucky to have met some new bestfriends at the campground who were familiar with the area. Also, the owners at Arrowhead Horse and RV Campground have established GPS maps of trails in the immediate area to include those on federal lands.

Karen and I want to again thank the campground minister and wife, Frank and Mila, for the church friendship and time we spent together hiking. If you are reading this please make sure to post your contact websites in the comment section. Small world that Frank and Mila will later be about a mile from our daughter in Kansas City. Hope to see you then.

Beecher’s rock is on national forest land where cattle free range. We found you could just drive in. Make sure to close the gate.

Hiking Six Miles to Heaven

I’m not sure if the below location is officially known as Heaven or not. But that’s what they called the place at our campground. There are plenty of horse trails in the Black Hills to follow and this is one of them. This was our four month puppy’s first ever hike, three miles of which seemed like going up hill. Had we not walked past the horse trail the hike would have been shorter.  At the top we enjoyed a sack lunch with friends.  At 6,100 feet in elevation this is one of the highest points in the area. You get the feeling of standing in Heaven as you spin around 360 degrees to a view in every direction from a large flat and rocky hilltop.

Wyatt did great. Look at those floppy ears as he ran off-leach for his first hike. Wyatt likes to run from shade tree to shade tree. For some reason he does not like sitting around in the sun waiting for us to catch up to him.

 

Campground Minister – Frank Bravo.

 

Campground Minister – Mila Bravo. Thank you for the photos you took. I might have stolen a few for this post.

 

We were following behind Frank and Mila in our truck. I noticed a deer running out in front of them and their break lights come on. Mila took this once in a lifetime photo from the cab of their truck.

 

Fall colors were just starting to come out in the trees. And we get to follow the fall colors all the way to Texas! Not that I’m bragging.

 

Top the mountain on Hike to Heaven

Very short hike along the stream in downtown Hot Springs SD

You can spend days just visiting the small mountain towns in the area. We decided to stop at Hot Springs because it is one of the several popular towns and Wyatt needed to take a swim in the creek.  It’s also near another stop at the Mammoth Site. Pay attention to the mud wall where the waterfall is located. I was fascinated with the contents of the wall which consisted of small rock and other sediments from the times the stream was located far above its current location. The entire Black Hills region is a walk back in time with all its geological features spanning an estimated 2.5 billion years. It truly is amazing.

This is the mud wall next to the waterfall where the stream has eroded to its current location, well below its original location at the top of the hill. Look at all the rocks and debree. It must have taken thousands of years to form these layers as part of a creek bed.

The Mammoth Site – Hot Springs SD

Outside at the Mammoth Site is a walkway where on display are examples and explanations of the regions 2.5 billion year geological history. Inside a large building is the working area where staff are systematically removing debree from a hill to reveal ancient bones of animals. This area was once an ocean which receded. Then a sinkhole occurred where animals were trapped because the sides were slippery and they could not climb out after getting a drink of water. Then the earth was pushed up by the process of plate tectonics which formed a hill. In the 1970’s bones were found while excavating the hill for a subdivision. I asked a worker who said they have core-drilled the bottom of the pit down to an additional 40′ where more bones are located. As a side note there is RV parking at this site off U 385.

Mount Rushmore and Crazy Horse

The drive to Mount Rushmore was impressive.  We arrived early to avoid the crowds because of the virus thing. Nor did we go inside of any buildings. Dogs are not allowed past a certain point and we learned later there is a path behind the gift shop that leads to an open area for dogs.  Mount Rushmore is inspiring. There is RV parking at the site. The only cost is $10 to park. Although others said the Crazy Horse Indian Monuments is a better tour than Mount Rushmore, we decided just to stop on Highway 16 to take a photo. As you may recall we visited Crazy Horses’ place of death at Fort Robinson near Crawford Nebraska. 

Crazy Horse Monument as seen from Highway 16

Walking trail to an area closer to Mount Rushmore heads

Town of Custer South Dakota

During the pandemic it’s safe to get some take-out food and walk over to the city park in Custer SD. Lots to see along the street to include large buffalo sculptures. Grab a local brew and sit outside to watch the traffic. The place is surrounded by scenic views.

Karen and I began this trip west on July 26th. From the lands of the Pony Express across the high plains of Kansas, from Ogallala north into the hill country of beautiful western Nebraska and ending of course in the southern region of the Black Hills. I’ve never been closer to historic areas of American Indian history. Somehow being within the lands where events actually took place is more memorable than what I got from any book or museum as a child. I truly appreciate the opportunity to learn first hand about this part of the country. 

In case you are wondering what was my favorite place to visit in the Black Hills?  I gave this a lot of thought.  I’d say my favorite spot is at every turn in the road. Because, everywhere you turn in the Black Hills reveals yet another amazing landscape.  

Revised Budget for 2020

We are wraping up our stay in Livingston Texas and I’m working on a blog post regarding area day trips.  Now that we have been living in our RV for five months, and as it was the beginning of a new year, I took a look at our 2020 Budget.

If you missed the background information here is a link to the original three part series regarding budgeting which included general notes, living expense budget as well as the budget to equip the RV.

Based on feedback from others and my own observations I wanted to pass along a few important notes and then posted below are the numbers.

1. When you hit the road fulltime with a spouse you give up some privacy and independence. Your budget probably should include a line item for discretionary spending by each person. In Karen’s and my case we each have an income and decided not to lump it into one account. As was the case in our sticks and bricks house we both just assume responsibility for certain expenses and spend/save the remaining individual income as we please.

2. Spending is a matter of discipline and behaviors. In my case I do not plan to spend much time tracking the actual expenses. I generally know what we can spend on big expenses, such as looking for campsites in the $25 daily average range. Karen makes a list and knows what she can spend when grocery shopping.  I know our budget allows us to fuel the truck roughly seven times a month. The majority of our expenses are now placed on a credit card or paid online. The process of tracking expenses for me will be a quick look at the bank account to see if we are looking okay. It’s made easier by having a specific amount left in the account each month. If that leftover amount is lower than expected then I might look into it. As a side note I’ll mention a few line items in our budget are more annual costs spread out over 12 months and in some cases we will be moving that amount into our credit union account to spend later.  In the case of our medical expense budget we use our Health Savings Account.  Whatever we don’t spend each month of our medical expenses will be contributed to our HSA account to make use of the tax free income as well as to continue building the fund for medical emergencies.

3. We budgeted heavy for our first year on the road which may result in a need to supplement our monthly income. When first planning I expected the supplemental amount to be around $500. Now I’m guessing it’s closer to $125 and may end up being nothing. Before we hit the road we saved up the extra income requirement for a year and placed that in an account with our four month emergency fund and the money we have left from our RV/Truck purchase budget.

4. We have already experienced unplanned and sudden incidents on the road. I’ll write about that later. The point is there will be unexpected expenses such as a breakdown on the road. Sometimes “throwing money at the problem” fixes it best.  When emergencies happen you may not have time to shop around for the best price and the stress is far less if you are not concerned about the finances.  Before you hit the road I recommend having ample savings.

And now for the revised numbers and notes:

Taxes and Insurance (non-medical)- was 736.00 – Revised to $434

• We have not added the life insurance – less 126
  • This was to come out of 401K
• RV Insurance was $87, but came out at $80 – less $7
• Truck was $137, but came out at $97 – Less $40
  • Probably will go up after fender binder.
• Roadside Assistance was $12.50 but included in RV/Truck insurance – Less $12.50
• State and Fed taxes was figured at $331  – actual is  Less $117
  • Have to keep combined income under $32,000 to avoid paying income tax on Karen’s social security.
  • Having no state income tax is a big thing. I also figured our annual income higher than what is expected for the calculation of subsides received when using the Affordable Care Act for medical insurance. This might later result in a slight federal tax break that’s not included.

Camping Fees – was $787 or $25 a night. We are seeing on average about $20 so far but leaving it the same. We enjoy state and federal parks. We also tend to use weekly rates in other parks.

Medical – was $451 and keeping it the same for now, although so far our actual is way less.

• Currently $8 a month for health plan. – Yup you read that correctly!
• Keeping Dr. and Dental at $75
• Prescriptions are about $70 a month
• Whatever we do not use goes to health savings account (HSA) to replenish or towards annual contribution limit. Goal has always been to have HSA cover our max out-of-pocket costs in the event of a catastrophic illness.
• Medical comes out to about 12% of our budget which is a number in the range of what I’ve seen used by others

Fuel – was $550 a month to include gasoline, might go to $495 but leaving it the same for now.

• Maybe get 5 gallons of generator gas a month x $3 = $15
• We fuel truck maybe 1.5 times a week 32 gallons x $2.50 x 6 = $480
• But we have not traveled as much as we wanted so leaving the extra $55 in the budget for now. Which means we can fuel the truck up to 7 times a month.

Travel and parking – leaving it the same at $26 for tolls

Grocery – was $450. Karen says closer to $600

Eating out – was $150 – increase to $200

• $50 x 4 times

Entertainment – Leave at $241

Department Stores – leave at $30

• This is clothing purchases. We shop at thrift stores when possible.

RV and Truck Maintenance was $130 – Now at $100

• $130 a month was $1560 a year. Our rig is new and covered by warranty, going to $100 a month.
• Some say put what is left each month in an account to cover large repairs, especially if you don’t have an extended warranty. We already fully funded an emergency fund before we left on the road.

Utilities – was $40, now at $38

• We find ourselves using weekly camping rates rather than monthly. Historically monthly rates have an added electric charge. Right now, we could not see staying more than a month in one place maybe once a year at $75 for electric or about $7 spread out over 12 months. And then in the case of a monthly stay the camping fees are reduced and hence cover the electric surcharge.
• Propane usage this past winter, given the climates we anticipate traveling in so far have totaled about $105 over three months. And when not using the furnace my experience has been maybe $30 a month in propane for cooking which would be another $270 for the remaining nine months. Total propane would then be $375 a year or $31 a month.

Phone/Cable/Internet – was at $160 a month – now is $110

• We switched off to a Togo Roadlink which had an upfront cost for the hardware. The annual unlimited data through AT&T is $30 a month. We link the Togo to the campground WIFI when it makes sense.
• My part-time office job provides a cell phone which is through T-Mobile and offers unlimited data but is at a reduced speed in about a week’s usage.
• Karen’s phone is AT&T and costs us $70 a month. It has a 20-gig data plan that also reduces speed and otherwise is unlimited. She has never hit her data limit.
• We use over-the-air channels for TV or stream through a Roku stick. Streaming is through Amazon which costs us $125 a year or $10 a month.

Misc. – was $46 a month, now is $79

• Haircuts (for me) remain $18
• Memberships was $9 but is $21 a month
  • Escapees annual membership is $40 annual or $3.50 a month
  • Keeping Good Sam’s for now at $2.50
  • We already bought an America the Beautiful lifetime pass for 1/2 price camping at Corp of Engineer parks and free admission into National Parks.
  • We have Texas and Michigan state park passes but those costs are included in camping fee budget.
  • I’m a Mason and dues are about $7.50
  • Will probably add Passport America at $3.50
  • This year I subscribe to rvtripwizard.com for route planning at $3.50
• Laundry was $19. Karen does laundry about every two weeks for about $20 so new total is $40

Big Ticket Items – keeping it at $100

• We actually have money left in a separate budget used to equip the truck and camper. But for now I’m leaving the $100 a month in the budget that can, along with the maintenance budget, be used to replace expensive stuff later.

Mail Service – was $21 a month, revised to $16

• My part-time job employer helped cover some of the first year-start up fees. I have a slightly upgraded service because I get some work-related documents that are time sensitive and can be scanned by the service. Going forward, I’ll be paying for the basic service portion which is annually $95 a year plus maybe $100 in mail forwarding costs. Total is about $16 per month.

Extras – was $95, revised is $75.

• This was somewhat of an arbitrary slush fund amount. I believe in 2% variances in annual budget amounts, if that be spending 2% less or 2% more. So 2% of our annual budget amount would be $3,762 monthly x 2% is $75 a month.

This budget is $46,044 annually ($3,837 monthly) before taxes for our first full year of travel.

 

First Month of Fulltiming – Domicile State Selection and More

As part of planning for our future in an RV we toured local RV parks over the past couple years. I’d still be working for weeks after we moved into our new fifth wheel home and needed a longer term parking spot for camping. Our first 11 days were spent at a county park which is on a local Corp. of Engineer Lake and then we moved to a “long term” spot at Basswood RV Resort for the next five weeks.

Basswood Resort – Platte City Missouri. We are parked at the extreme opposite of the main office which is good for exercise.

We had time to complete some of the more mundane processes of moving to the fulltime RV lifestyle. We have also decided where we would be for the month of October which is in Southern Missouri. Then maybe in November and December we will move to northern Arkansas over to Mississippi and then down into Texas.

I have to say it has been wonderful to be parked in one spot for a five week stay, even this early in our move to fulltiming. I recommend a longer stay for those new to the lifestyle even if you are not having to stay in an area, as we are, waiting for a final day at work. It really helps with adjusting to the change. There is plenty of time to get to know your rig and finish up the final administrative tasks required for fulltiming such as mail service and domicile.

The kitchen in our 35′ home. Longer stays not only saves campground fees but gives you a chance to spread out and enjoy the RV.

In the final days of the rush to sell the sticks and bricks home I completed task based on priority because there was just to much to do.  Many of those tasks remained to be done after we moved into the fifth wheel. It’s sooooo nice to have time to take my time in completing this. Before we moved out of our stick and bricks house I went to the local post office and setup a PO Box. I’m not changing our address to the new PO Box as we are domiciling in Texas and setting up mail service there. I just needed a place to temporarily forward our mail. Had there been time I would have setup mail service in Texas two months before we moved out of our sticks and bricks and then started changing our mailing address as needed. But the PO Box has come in handy as a quick fix.

We kept our space where the fifth wheel had been stored for a few additional weeks. For now we still have Karen’s car, my work car and the truck. So the storage space came in handy for juggling cars in and out as most campgrounds did not allow for more than two vehicles.  Eventually a friend offered a spot to park the truck at his place so the storage space is now gone.  Karen’s car is to be sold but has came in handy as she has not yet decided to drive the truck. I’m hoping she does because not having a vehicle takes away part of one’s freedom.

I forgot to cancel the homeowners insurance but the agent dated the cancelation as being the same day we sold the house.  Got a refund from the insurance company. Cancelled a lot of other bills and I have to say I’m noticing a change in our bank account in a positive way. Even if this long-term RV spot is $680 a month to include electric.

As part of setting up our mailing address in Texas we had to swing by the bank to have a form notarized. I was aware that Bank of America had acquired Merrill Lynch, an investment company. So we sat down and opened an investing account at the same time.  Our remaining sticks and bricks house money is going into a well protected place (not the stock market) that’s FDIC insured with the best interest rate I could find. We have other funds already in the market. I keep enough in the checking account for monthly expenses and our slush fund at the local credit union where I can easily move it electronically to the bank account. This is a secure and flexible setup I believe. I should define “slush fund.”  This is an account that has our emergency fund of three month’s expenses, an extra amount for our first year of travel and what money remains in our budget for equipping the RV and truck.

Now, regarding domicile!  For those non-rvers domicile is simple a legal address you call home. The three most popular states for fulltime rvers are Texas, Florida and South Dakota. Lots of reasons for that which I’ll not go into.  We wanted to stay in the Midwest which is close to family and generally an area we plan to spend a lot of time in.  South Dakota would have been way easy to setup a domicile in because other than showing up in the state to get a driver’s license everything else can be done through the mail.  Each state has mail services you can pay for. Those mail services are a physical building where your mail is sent and a unique number is assigned for your mailbox. That number becomes part of your legal address. The Escapees Club is perhaps the premiere mail service. They have service for all three states however any mail sent to the Florida address or South Dakota address is then sent on to their main facility in Texas.

For us the health insurance decision became the deciding factor between South Dakota and Texas.  Karen will be Medicare eligible in a year. I’ve got a few years to wait. This makes a difference in which state you select. I’ve been corresponding with Kyle at rverinsurance.com. This is what he wrote about South Dakota regarding health insurance:

“Hello Mark, I am sorry I was not able to get to this sooner so we could talk on Friday the 6th. I would definitely consider TX instead of SD…health insurance options in SD are horrible. To even get short term medical you have to have a gap in coverage of 64 days now. Nonsensical rules there and ACA carriers will not take RVers nor will they cover you outside of SD even if they did take you.” 

I’ll get into our healthcare selection once it’s setup.  For sure I’m not taking COBRA benefits at work which are very expensive unless we have to. I’m also leaving the job the first of the month because I’m still on their insurance for the remaining days of the month! Short-term nationwide coverage is available for those with no pre-existing conditions and in Texas that insurance can be extended for a longer period of time. Again, more on healthcare later.

So I sent off our application for mail service to Escapees in Texas which is our next big step. Then we will eventually make it to Texas for our driver’s license, vehicle registration and more.  Here in a couple weeks Karen and I are attending an Escapees Chapter rally in Southern Missouri for a week.  Plenty of time to pick everyone’s brains for more advise.

What is MSRP – New Fifth Wheel Shopping

Everyone knows MSRP stands for Manufacturers Suggested Retail Price.  However, does the dealership use the same definition of MSRP as the factory?  Probably not…

I’ve been on the phone and emailing back and forth with dealerships in an effort to order our fifth wheel.  More on that later in a blog post once the deal is done.

As part of the process dealerships have been referring to MSRP within their price quotations. I started with three dealerships and added another after learning one was no longer selling the brand of fifth wheel we wanted. In all cases the dealerships MSRP numbers did not match other dealerships. Fortunately, I happen to possess the actual factory MSRP price sheet for our fifth wheel.  This document was not readily available but I happened to get it from a dealership and current owners on the forums or Facebook User Groups will provide it.  This document starts with a base manufacturers price plus line items for each option.  You total this up and you have the true MSRP as published by the manufacturer.

If you want a copy of the MSRP price sheet for the fifth wheel Karen and I are ordering just send me an email request at mseneker@hotmail.com. You can see for yourself how MSRP is actually figured.

What I have been discovering is possibly a method to cloud the deal, maybe not on purpose, by a dealership. By cloud the deal I mean confusing the customer.

I was asked outright what I was looking for in a deal and I was honest and said 30% or better off MSRP on a new custom ordered fifth wheel.  And an “out the door price” that includes all fees.

There have been other price figures to consider beyond factory MSRP when I asked for an out the door price. And those are shipping and whatever paperwork (referred to as dock or paperwork fees) added on by the dealership. They might also include fees for items not provided by the factory such as a second battery.

I’m not sure I’ll ever know the actual shipping cost but for sure think it’s fair I should pay for that to include a fair profit. And I truly believe a good deal ends with the dealership being happy with it as well as I’m happy with it – despite profit or whatever.

What I’ve discovered is dealerships sometimes include shipping and other fees as part of the “MSRP” and some don’t.  And mostly in whatever light makes their deal appear more favorable. Especially when a customer like myself is talking in terms of a percent off MSRP.  For example a dealership might quote MSRP as $98,000 and take X percent off without admitting their MSRP is loaded with other fees.  Then another dealership might use a figure that does not include shipping costs at a factory MSRP of $96,000.   So one dealership takes 30% off $98,000 which is $68,600 and the other takes 30% off $96,000 which is $67,220 then adds on considerable fees from there.

Of course the final number at the bottom of the page is in reality more important. And hopefully that number is an “out the door price” with no surprises.  But, as a tool to judge the honesty of a dealership – get a factory MSRP price sheet and know your true MSRP to include options before you start talking numbers with a dealership. You will quickly discover who is hiding fees in the “MSRP”.

I’ll also add if you receive an MSRP figure that is considerably lower than other dealerships you might want to make sure the quoting dealership has not made a mistake in adding up or including the options you specified for the factory order.

Finally, I’ll mention for me the price is not 100% all important. Selecting dealerships whom you want pricing from is a process all in itself. And that will be another blog topic once our deal is made.

It’s Only Business

I decided to write this post as a way of thinking through the modern system of business and how at times our generation has to adjust to it. Or maybe it’s just venting…

The business/customer relationships has been changing for years and surely is market driven. The consumer is behaving differently which caused the business to do the same. And in some cases, those that run businesses are attempting to show higher profits in the short term and not really caring about the future of the company they are fleecing in order to retain their unearned higher salaries. I could write a well informed opinion about Sprint (United Telecom) for example where it could have been the greatest. No worries, I just received my second early retirement check from them!

I’m of the generation that believes in long-term business relationships. I’ve had the same insurance guy for more than 25 years, been with only two banks in my lifetime and shop locally as much as possible for example. I’ve had the opinion a business deal has to be good for both sides. But know the customer is competing for the highest quality, best value product at the lowest price. While the business interest is moving the negotiation to at times providing the lest costly product or service at the highest sales price.  I get it and eventually that business will find it’s niche.  And I as a consumer I will discover that niche is exactly where I want to be in terms of value and therefore find that business and purchase from them.

But it’s a new world and in some products the tide is turning rapidly. I know it’s only business and I have to change my mindset when negotiating. Here is a recent and common example.

We all have those expenses were we have to review the contract on at least an annual basis.  Karen and I cut the cord with the cable company (Direct TV) and switched off to using the digital antenna I mounted in our home’s attic for free over-the-air channels.

A minor part of that savings was used to upgrading our internet service for increased streaming of movies and shows, netting a monthly savings of about $60. Yes, that savings is small. But if we viewed every expense as just small; compounded with other small expenses that total is large.  I view evaluating every monthly expense as being worth my time to review it.  And know several wealthy people who think the same way.

Well, it only took speaking with nine (9) customer service representatives to cancel the service. The first four customer service employees probably think I’m a jerk. I eventually learned their jargon and was able to explain what I was asking in their words. You see, Direct TV was bought out by AT&T so I was bounced back and forth to operators who handled different aspects of the business. I learned to tell each “I’m a legacy customer who wishes to cancel my service and want to know what my final bill is and where to send the equipment.” I even started off providing my full name and service address which turned out to be the question each of the nine operators asked regardless. This change in service came about as our bill was being raised 22%. The only negotiating they would do was a one time $10 rebate.

I would have preferred to stay with Direct TV and at price we could both live with. Heck, I’ve been with my internet provider for 17 years. But for sure I recognize the new majority of customers will jump ship in a heartbeat. They do it all the time with cell phone providers, insurance agents or whatever. Do you remember those days when we all had a home phone and for years upon years the monthly cost stayed relatively flat (thanks to telecommunications regulators I’m sure.) Kind of like utilities are today for those of us not in an RV.

So for me, I’m learning to be nice when I call a provider and if the negotiations do not go well, and I know there are other options, to just move to another company or cut the service all together. And I know those long-term relationships, if there are any, may go on in the form of I quit you today and hire you back in a year.

Perhaps on a more important note is the notion of making life less complicated. I’ll bet a few readers were thinking about that several paragraphs ago. I hear ya.  Cutting the cord with Direct TV will allow more flexibility once we hit the road in an RV in that I’ll delay the whole satellite TV decision and the equipment necessary to use it, or not, for awhile. And maybe that will cut down on the need to read an email or two for bill payment.

Several years ago, when I was a business owner I had one advertising service provided by again, AT&T. I paid that bill annually to reduce the amount of mail I received. Although the company continued to send a monthly bill showing I owed nothing. I called customer service and said they have two options as a business if they intend to keep me as a loyal customer, or words to that effect. Either stop sending the monthly bill, which I had to open to make sure it was not important, or cancel the advertising service.  Well we ended up canceling and I shifted the money to other forms of advertising.

Maybe this is a little off topic of spending time with family or planning for a future in an RV. I just really wish more businesses would recognize ease of doing business is just as important as price and product. Until I find those businesses, I’m making life simpler by firing them when neccessary.

Financial Decisions

Updating our financial plan annually has become much easier since the major overhaul in 2014 when Karen and I decided our future was going to be in an RV. It was encouraging to see in print where we had made quit a lot of progress over this past year. And there were a few decided and pending decisions I can highlight for your review and input. If you’re really into the topic, just go to the blogs financial category for past thoughts. I’m happy to report we are still on track for my “retirement” date of November 1, 2019. Actually, it might be the last day of October, so I can setup retirement benefits to begin on the first of the month. Here are a few comments regarding our plan as it stands today:

Be Conservative

Keeping estimates reasonable has been in our plan for not only estimated expenses, but also income and the value of assets we are selling. I know our current effective income tax rate is lower than what I’ve estimated. I’m still planning for federal and state taxes at the same rate as during our “working years”.  I’ve included state income tax among our expenses knowing we will domicile in a state with none.

Other examples of being conservative has been using the lowest Kelly Blue Book price for what our current automobiles can be traded in for at a dealership. Another is after selling property through Craigslist, or wherever, I know the price we get will be lower than we might think. To that end, I’ve estimated household goods very low (I think) to include tools, yard equipment, guns and electronics. And I’m betting most of our furniture, clothing, rugs, artwork and such is relatively worthless.

Make Decisions Earlier That Benefit the Future

We have sold off and banked the money for more expensive property as early as possible. Although their book value was not much, the extra truck and boat went sometime ago. Both were maintenance hogs and it’s nice not to be paying property taxes and insurance on them for what would be our final two years or so before moving on. Next to go, and soon I hope, will be one of our two remaining cars and a motorcycle. Months before any of the proceeds are used in buying our truck for travel.

We all know healthcare expense is the number one concern for us pre-Medicare retirees. Karen and I decided to max out the tax deferred contribution to our Health Savings Plan which is $6,500 annually in 2018. And we took advantage of the $1,000 extra you can put aside for those who are 55 or older. Hopefully we will have a decent balance in the account once we hit the road. Does not sound like a lot of money to some. But on my wages, it is. Because of reduced expenses elsewhere it was made easier. I even called the cable company and told them I’d be on a fixed income (someday) and asked it they had any deals. Saving $40 or $50 dollars a month here or there makes a difference over time. No worries, we are still enjoying life and really don’t have any financial concerns. Not because our income is way out there. We became debt free last January when the house was paid off.

Friends at work are retiring off and passing on what they learned. One figured out that our retirement plan is based, at least in part, on the two highest years of salary. So, he suggested to skip taking the overtime pay and ask for comp. time which we are never expected to use believe it or not. Being paid for all unused sick time and comp. time the final year will significantly increase the final years earning and hence, the amount retirement benefits are figured against.  Seems strange work will be paying for those hours I earned years ago at the much higher current salary rate.

Don’t Procrastinate When Big Decisions Have to be Made

It would be hard to tell that Karen turned 62 but she did.  And we decided it was best for her to start taking her social security benefit. I’d be happy to discuss the reasoning behind this with you in the comments section if you’re interested.

In August I’ll have to look at the pros and cons of receiving an early pension from a past employer. That decision is on my calendar for the day I’m elidable. We planned on taking it in November of 2019 anyway. But when one micromanages finances, even 16 months can make a difference in the decision process.

Not having delayed estimating what it will cost on the road I hope will prove to be beneficial. And perhaps even more importantly, knowing the cost could be higher the first year compared to years after. Karen and I decided to fund a travel/reserve account. In the past we called it our safety net in case we lost our jobs.  We decided to compromise between what she wanted to do and what I wanted to do. So we included in our financial plan to have the equivalent of four months expenses rat holed away on top of the additional $7,656 our first year of travel will cost compared to the second.  I’d suggest not waiting to decide what you need to save. Nor just assuming it should or could come out of the proceeds of something you sell – like your house. For us, it’s been a little easier to save as I have a part-time job that only requires 10 hours a week of my time. Not that the hours, on top of my day job, don’t suck. I’d not have the positive attitude about the extra work if it were not for knowing our traveling lifestyle is not far off.

For now, we also made the decision to purchasing a 10 year life insurance policy rather than taking a reduced pension that has surviving spouse benefits. I say for now because I’ve only shopped for term life insurance policies online. If the actual prices come out different I might change my mind. Again, that’s a big decision we can discuss in the comments section if anyone is interested. Simply put, the life insurance is cheaper per month than what we lose with a reduced pension benefit. And we have other assets should one of us croak earlier than the other.

Truck and Trailer Budget is Huge

I’ve kept our budget for the rig the same as it’s been over several updates to our financial plan. For those of us who are not “wealthy” the cost sure seems to be huge. Perhaps because as we get older it seems like stuff costs a lot more. It’s easy to overspend, thinking this could be the last ride of one’s healthy life. And when we first start researching it’s possible we think we need to spend more.

As our expectations of what we could or should spend have come down, the budget stays the same. I suppose this is another example of being conservative, believe it or not. I’d rather over-estimate and spend less. Just because the bank account will be fat from selling everything and increasing savings because our expenses are now less, does not mean it did not take a lot of effort and time to accomplish saving up that much. Not to mention the truck or trailer will be worth less than half of what you paid for it when you decide to sell it. Can’t get that money back without an honest job. Reading about other’s travel experiences in the RV lifestyle or meeting with them in person really has helped to gain a sense of what is important about it all. I’m planning to come in under budget which will perhaps be an excuse to have spent that much:)

Know-it-all’s Should Listen to Other Opinions

Thanks to Karen, our house is worth more.  At least more than business major/financial savvy me thought it was. No, we have not had a real estate agent appraise it’s worth. And no, we have yet to put it on the market where it could sit for months. The house is in a unique location and agents tell me they are having a hard time even getting enough houses to sell (listings). Karen took a look at what I’d valued the home at for the purpose of planning. She shot a new number at me that know-it-all me thought was at first ridicules. Then I found even more ridiculously prices houses in the general area that don’t have acreage to go along with them.  I know she will prove to be right. But, other than adding in the cost of a new sewer connection to the city system, I barely increased the estimated value in our financial plan just in case.  We will make sure and use something closer to Karen’s number than mine once we meet with our real estate agent. Damn, things just seem so much more expensive today.  Hay, another reason to justify the RV budget!

Do you have other opinions to offer?  Such as when is the best time to put it on the market? Should we allow the agent to expect 6% for the fee to sell when we are not buying another home afterwards? Fortunately, we have already completed a few major upgrades to the 16-year-old home. And Karen will finally be getting the new carpet she has wanted replaced 10 years ago. I’m planning to finish up the outside painting and landscaping this season. While next winter (our last here!) will be spent on inside repairs and heavy cleaning.

Plan Ahead – But Maybe Not Too Far

If you have been following this blog for long you already know our financial plan includes an exit strategy for when we come off the road. I’m still satisfied with the decision to estimate our time on the road to be six years for planning purposes. As well as our plan B for income which is to make use of retirement accounts or rely on being young enough to go back to work.

After crunching all the numbers again this year, I’m a bit more comfortable with the funds we are leaving behind for a new home someday. Maybe that number will be larger as Karen opened my eyes to the potential value of our current home! One thing for sure that has worked out was deciding back in 2014 to dust off an older financial plan and review it every year since. I know other’s have made the move to fulltime RV living with only a few months of planning. We will see how that works out for them. Or maybe without realizing it they amassed the funds to do so over more years or with a better paying profession. A couple blogs I am reading include some scary financial stuff I’d not be able to cope with.  But maybe those folks are younger and yet to move through the years where they can achieve their maximum financial potential. But spending your last X dollars from your 401K plan to continue the journey is, well, not to call names – stupid.

I took a look at the portion of our financial plan that included a timeframe beyond just simply what we had to spend once we come off the road. I actually started to consider how that money could be spent, such as renting a place while we wait for our truck and trailer to sell. Or maybe we could get a small loan to buy a new car, paying it off with my social security check. Well that’s also stupid. There are simply too many variables to consider that far out. I think I’ll just stick with the advice we were given by another RV full-timer. That is make a deal with Karen to give the other at least six months’ notice when they are ready to come off the road. Then we can plan the next journey from there on.

Buying Used vs 35% Off New MSRP

I’d like to cover a few topics in this post. Buying used vs 35% off new MSRP and cost of depreciation. Also buying a brand of RV that has less chance of going out of business than another.

What got me to thinking about this topic had to do with someday knowing we would have to buy a new home and the money we would have left to do so. After I crunched all the numbers I believe I came up with a relatively accurate figure as to what money we will have left to buy a new home. Hate to already be thinking about an exit strategy but the plan would not be complete without it. Karen and I talked briefly a few months ago about what that left over money would buy in a house today. Not nearly what we live in now for sure; not that we are ever going back to the same lifestyle/house. We took a look at the current houses that are for sale to get an idea of what we could afford later – scary.  I might have to build one..

Let’s assume you get 35% off MSRP on a new $90,000 fifth wheel. The selling price would be about $58,500.  After five years that “$90,000” trailer could depreciate as much as 55% off original MSRP and might be sold for $40,500.  That is about $18,000 less than you paid for it.  So, it cost you $3,600 a year or $300 a month to own it – or worse.  Now consider if you bought a couple year old quality trailer of any brand(add an extended warranty) for maybe $46,800. Then sold it five years later for the same $40,500.  You spent just $6,300 or $105 a month over five years for ownership excluding taxes, insurance and added equipment. And assuming the used RV market is not saturated with used units the baby boomers are moving out of.

It goes without saying the fix for trailer depreciation is finding an exceptional deal to start with.  But I still stand by an earlier view about RV depreciation which is I’m not letting that stop us from buying one.

I’ve been studying the 2015 and newer models for some time now.  One of the problems are new floor plans and our attraction to them.  If we stay more flexible we might be able to save a ton on our upfront costs and leave more for a replacement trailer or a new sticks and bricks once we come off the road.  At least this is how it works for those of humble means.  Some of our favorite floor plans were offered back in 2016 but far fewer than I’d hoped for.  Lack of a certain floor plan could have an effect on what trailer makes it as the one we finally decide to purchase – if we decide to buy gently used.  I’ll be plugging the numbers into my spreadsheet to figure out the value of any specific used trailer. I’ll bet a used one would easily come out ahead of a new one for value if we can find the same floor plan.  And I’d be asking for a lot more than 35% off original MSRP to make the deal.

Redwood Interior – Rated with 8,000 pound axle capacity, H rated tires, extra large brakes, all solid wood cabinets with soft closing drawers.   RV gas/electric fridge is an option! The 340RL comes in at just 36’7″ in length and was first built in 2017. With over 4,000 pounds of remaining cargo capacity.

It was only a few years ago when several popular brands for full time RV living went out of business. Some had been around a long time. Some models were reinvented where the brand had been bought out by another company. Lifestyle Luxury RV comes to mind.  As does the original fifth wheel which is the Hitchhiker. The list goes on to include trailers built by Newmar and Peterson.  You and I have been studying fifth wheels for a few years now. Bet you would be less likely to buy one that is no longer in business or built!  And some people may not have even heard of a once great brand they now find eroding on a used trailer lot at a fraction of the price it once sold for. This brings up the risk of buying a model today that is out of business or discontinued tomorrow.  That already happened to my once favorite which was the Augusta Ambition, replaced by the Augusta Luxe Gold and it’s laminated construction.  Oh well, it was out of our price range anyway and yesterday there was only one used model I could find for sale in a floor plan we are not interested in.

And what about getting service advise when something breaks, especially if the company itself is out of business? All those who bought new Lifestyle Luxury fifth wheels were left with a useless warranty and a much stepper depreciation curve as the used price dropped considerably.

The Redwood is our number one favorite when compared to others in our budget range.  Although it’s not at the top in terms of value or when comparing what it costs for the features we want.  The Redwood came out in 2010. Per Redwood, they decided from the start to build a full time trailer for the baby boomer generation. Well, Redwood has gone through some changes. For the best I think. However, at least here in Missouri the baby boomer generation peeks out in 2020 and starts to decline as a percentage of the total population thereafter.  I’m thinking that is why RV companies have begun focusing on the next big generation of buyers which are the millennials. Heck even the Escapees RV Club started the Escapers RV Club to focus on that next younger (and larger) generation.  Wonder if the millennials will have the same disposable income to buy fancy new Redwoods years before retirement?  Maybe or maybe not. And that’s what is worrying me about our most current favorite trailer that’s in a price point higher than say a base priced Montana, Cedar Creek or Bighorn level trailer.

2018 Montana 3120RL at 35′ in length. With many features of a 40′ rear living room! Pantry, front facing washer/dryer closet, usable kitchen and bathroom. And over 4,000 pounds of cargo capacity. Unfortunately the floor plan is brand new. They made some needed changes in the 2018.5 version by the way.

Anyway, hope that gives you a few more things to think about when it comes time for you to buy an RV. The other day Karen said she thought we had found the trailer we were finally sold on. It’s a Montana 3120RL. Well, need I remind her we are not done until we buy one.  Things change, and deals might be out there that are too good to pass up. Being able to spot a good used one is a benefit of having studied these things for the past few years. Now I’m just hoping there are no new 2019 floor plans we are more interested in😊.  Believe it or not some of the 2019 Heartland models starting showing up and other brands will follow as soon as March of 2018.

Bighorn 3270RS at 35’2″ with over 3,000 pounds of cargo capacity.  This brand has and will be around for a long time. The Bighorn is Heartlands top selling luxury fifth wheels and among the top three selling luxury fifth wheel manufacturers.

Congratulations to a reader of this blog David who found a heck of a deal on a gently used 2016 Bighorn 3270RS. A trailer that has routinely been in the top five for us as well. That floor plan was still being offered in 2018. Go to the bottom of this comment section for the dialogue. Or maybe David will post something in this blog post comments about his success?

Next weekend is the local truck/car show. I hope to be back with a post about our tour soon. I’m also considering a post regarding RV friendly clothing and laundry concerns.

One final point you might be interesting in hacking apart. Right or wrong I’m leaning towards starting negotiations for new fifth wheels at 35% off the dealerships MSRP. And even more of a discount for last years models as a new unit.  And for new dually trucks, I’m going to take a swing at 22% off MSRP to include promotional savings. And I’ve started to lean towards shopping on the internet as a way to negotiate upfront before I walk on a sales lot.  More on that later I’m sure. (update 3/3/18 – I am researching the merits of negotiating for a new truck from invoice price rather than MSRP while keeping an eye on factory incentives so I don’t give the dealer any of that money. ) A friend just bought a completely loaded 2018 Ford F350 dually lariat at about 13% off MSRP. And he is a tough negotiator.

 

From blog reader Peter who mentioned a couple products you might consider for your new RV. Added RV fridge safety shutdown – ARP Controller prevents fridge fires; see arprv.com, material cost $175. Add soft starter for air-conditioning (ramps amps up slowly) for single A/C when boondocking, called EasyStart; see microair.net, material cost $300.

Budgeting Part Three- First Year Draft Expense Budget

Thanks for following along for this last of a three-part blog series regarding budgeting for our future in an RV. I began the series with a few background comments of importance. The second post was regarding our fifth wheel and dually one-ton truck capital budget which includes the vehicle purchases, taxes and basic furnishings. This final edition is our draft copy of what we expect to be our first-year travel expenses.  We plan to move around more the first year than subsequent years which, judging by following other blogs, seems to be the norm. The bottom line number is $48,156 which includes income taxes.

I have a second-year budget outlined in our financial plan but I’m not ready to post that yet.  If you read back far enough you will find a few relevant details. One final note before I share the numbers. Estimating healthcare costs is a highly debatable topic. I’ve tried to cover my research in prior posts. However, we all know when you are providing your own insurance (pre-Medicare) the availability and costs must be looked at on an annual basis. It was interesting to find the 2018 federal subsidized healthcare plans (Affordable Care Act) reduced the premiums for many compared to the prior year. We will see what happens in 2019. And I’ve given up on finding a plan that covers you outside of network. Although I’ve heard you can get nationwide coverage out of Florida.  Let me leave healthcare with that said. Go to the Wheelingit Blog for more of your own research. Last week I read an article regarding RV Health.com which is worth looking over at some point.

The numbers for our anticipated first-year expenses.

 

 

Explanations by line item

Taxes and Insurance – Non Medical

• Includes Life Insurance at $126 a month.
  • To replace an income if one passes away
  • If I take a 50% survivor benefit on retirement accounts that would equal $101. But does not match my income or hers for non-retirement income. Hence, I’d rather secure the income with life insurance for 10 years and rely on retirement savings should one of us pass away after then.
• RV – $87 based off another’s cost
• Truck – $137 based off another’s cost
• Roadside Assistance – $150 annually or $12.50 a month.
• Maybe an extended warranty on truck and trailer – but would come out of initial RV/truck capital budget and not this expense budget.
• Federal income tax on earned income only (no state because of domicile)
  • Have to keep combined income under $32,000 to avoid paying tax on at least a portion of social security.

Camping Fees

• We may save additional because we will be workamping/volunteering at times for a spot but less in the first year. And we will most likely take advantage of weekly rates in great places during the season or monthly spots for winter at the least. We plan to keep overnight stops at the least price as possible and we are equipping our trailer for at least some boondocking.

Medical Expense

• Medical using high deductible plan per Health Sherpa recommended plan is $312. Livingston TX zip is 77351. So far, this is our first selection for domicle.
• Karen will have Medicare by August, I’m paying for my own and am basing this off the current Affordable Care Plans
• Doctor/Dentist/Eye – Using Howards from RV Dreams at $75
• Maybe a supplemental plan for hospitalization. I can get it at my current job and the price stays the same when we leave (about ½ off the open market price) at $64 a month. Or we may use this portion for telemed plan or local doctor who does not except insurance.
• Prescription drugs are included in the Affordable Care plan but may change after she gets Medicare D.
• Doctor’s visits are coming out of our Health Savings Account which I’ve been building up to include the extra $1,000 you can put in the year you turn age 55.

Fuel

• Diesel (truck) – For now just using what I’m seeing in budgets with same travel style and using truck for daily driver. At $500 a month that’s maybe 21,600 miles a year.
• Gas (generator) – guessing with moderate boondocking eight gallons a month

Travel/Parking

• For tolls and such based off another’s budget.

Groceries

• Using our current costs plus 10% because will be buying in unfamiliar stores and in markets that could cost more than here in Missouri.

Eating Out

• Just using Howard’s budget at RV Dreams of $150

Entertainment

• Just using an overall average from a few blogs I follow and your suggested plus another 15% because it year one.

Department Stores

• We buy most clothing at thrift shops now.

RV/Truck Repair and Maintenance  

• Will be less the first year. For now, just figure $30 for truck and $100 for RV

Utilities  

• Electricity and Propane

Phone/Cable/Internet and TV

• Current part-time job will pick up the cost of my phone and work data plan.
• We enjoy television, so a portable satellite is in order. Figured our current plan at $50
• Karen’s phone $60
• Data Plan (excludes what work provides) $50 for 8 gigs

Miscellaneous

• Memberships
  • Good Sam’s – $23
  • Escapees – $40
    • Because of mail service
  • Passport America – $37
• Haircuts- Based on our current costs
• Laundry – Averaged based on other’s budgets.

Big Ticket Items

• I’m not including anything that it takes to get started in new trailer or equipping truck with is part of our startup capital cost to purchase the truck and trailer.
• This could be a catch-all fund or just used to buy cool stuff we find others traveling with.

Mail Service

• I’ll provide our own for personal mail. In addition, and not part of this budget, is a part-time employer will pay for business expense as necessary such as scanning, higher annual. $215 to get started or $18 month
• Plus shipping which I’ll guess twice a month at $12

Extras  

• Include storage unit $45. At this time we anticipate keeping a small storage unit for items we don’t want to depart with. Also to store property we are not sure if we will want to take on the road or not.
• Gifts and all other $50

 

Final Thoughts

I suspect there will be changes to this draft budget with input from others.  I also included a little inflation as the budget is for the year beginning 2020. The healthcare portion is the scariest part of the budget and we have not yet decided on all our options. This budget exceeds our estimated annual income, so we are saving up for the difference.  Karen and I have agreed to maintain at least four months of expenses in our travel account. I’ve decided to keep most of our income sources private but am happy to discuss them offline.

I’ve definitely not liked this part of the planning process. We are good at not having to keep a budget while living in our sticks and bricks house. And we seem to be good at just living within our means.

Budgeting Part Two – Initial Start-up Cost for Trailer and Truck

This is the second part of three posts regarding our budget for fulltime RV living. You can hit the back button or go here for the first part. Thank you for the comments on the last post. 

And happy new year to all!  Karen and I are looking forward to 2018 for many reasons. One is the vacation time I’m able to store-up and roll into the following year is maxed out. Finally, in 2018 we will be taking all the vacation earned that year.  My fellow employees may not like it, but 2019 is going to be the year I’ll be able to take the equivalent of one week of vacation each month breaking in the future RV.

My first post on budgeting included a few comments of how we got to this point in the process. This next post is about the budget for initial start-up costs for the truck and fifth wheel. I’m working on the final post which is our draft expense budget. I’ve learned from others the first year on the road is most likely the most expensive time, so you will see I’ve planned accordingly.

I’ll be including just a few key points as explanations when writing about the truck and trailer budget.  

This budget includes purchasing the truck/RV, equipping it and all associated taxes, and licensing fees. At the advice of others, we are avoiding a few initial purchases for furnishings until we get on the road and figure out what works for us.

Earlier, I came up with a list of accessories to furnish the RV or truck. Landed a few Christmas gifts off that list. Thank you family!  But the real purpose was to establish a possible budget for equipment depending on how extravagant we might be. Here is a link for Items to Purchase in a spreadsheet you might want to purchase over time. Another blog post to refer to might be the summary as of May 2018 regarding the truck and RV purchase decision. Here is the link to that post. I should also point out, once a year I go back and look at our financial planning, which was first updated to include going fulltime to an RV in September of 2014. The plan includes our expected income at “retirement” and net assets. To get to what amount of cash we wanted to spend on a rig was a challenge. I suppose the best way to summarize that process is I came up with a conservative net worth, meaning I tried not to overestimate what we could sell stuff for and the return on our retirement savings accounts. I looked ahead to our retirement date and added on inflation costs for a truer picture of what it would cost to buy more stuff and how much less our old stuff would be worth. Karen and I had to talk – a lot – about how much we wanted to keep stashed away for when we eventually come off the road or whatever. I’ve had a financial plan since 2001 and have grown to trust the numbers.

I’ll get to the topic at hand. These numbers are accurate as of 3/2/17:

 Truck and Accessory Budget:  $65,000 for the truck and $1,700 for accessories.

• I’ll not get into it much as to why, but I’m leaning towards a Ram 3500 dually. With 4.10 gears and air suspension. Our max trailer weight will not exceed 18,500 pounds and this truck will also handle the pin weight.
• We hope to get the best transmission offered in whatever  brand truck such as the Ram Aisin. Ya, I know Chevy probably builds a better transmission even if their warranty is no better than Ford’s or Ram’s.
• You can refer back to the decision on trucks by going to this page.
• I’ve not given up on a Ford but generally believe the Ram is the best value when furnished the way I’d like it as a 2018 model.

• I’ve been shopping online for nearly a year, mostly to come up with pricing and typical availability. Same as others, I’m finding it hard to locate a truck within reasonable driving distance from home equipped the way I want it. Hopefully I’ll not need to order a new one. We are also not against buying one used if it has under 20,000 miles on it. These trucks hold their value, so we will have to consider the difference closely if not bought new.
• If we keep our color choices to a few and bend on leather vs cloth, the selections of what are parked on dealer’s lots increase.
• This time of the year and a bit earlier, I’m finding with incentives the new trucks are priced anywhere from around $8,000 to $12,000 below MSRP.  You might be able to save up to 22.24% off the original MSRP if you can find a one year old used truck with less than 20,000 miles on it.
• We are buying the truck before the trailer, maybe as early as next summer. Ford made major changes in the 2017 heavy duty. Rumor is  Ram is making major changes in their 2019 models, having already added few minor improvements in 2018. Maybe we can find a 2018 priced to sell just after the 2019s hit the dealers lots! Also Chevy/GMC made some engine upgrades in 2017.
• We are going to the February 2018 car show in Kansas City to check out the trucks in more detail. Yes Karen, we will also look at the cars. She is from Michigan and car shows are a big deal up there.

 

RV and Start-up Accessory Budget: $74,655 for the “luxury” fifth wheel and $10,000 for accessories:

• It took a long, long, time for Karen and me to come up with or short list. We continue to fine tune that list as new floor plans and construction details change at least twice a year.
• One of the tougher decisions has to do with what construction methods you prefer, especially for suspensions, tires, frames axles and more. Go here for my post on heavy vs lighter trailers.
• Another good way to eliminate fulltime trailers from your own short list might be to consider cargo capacity. For us, we are looking for 3,000 pound cargo capacity and above. Just remember, added options take away from cargo capacity so look for the sticker on the trailer that lists the actual cargo capacity. Often, you will find dealers post a photo of the sticker in their adds.
• Establishing a budget for the trailer is a big first step in deciding what price point you want to spend your money in. Unfortunately, this first step includes a ton of research and I hope being able to follow my own research has helped. As always, the details include what Karen and I want in a trailer, your expectations will be different.
• We remain somewhat open to a used trailer, maybe as old as three years. But are leaning more towards a new trailer in last years model. The new trailers are announced around February and arrive on dealer’s lots beginning around July or so. Prices start to drop on current year trailers in October or so according to my own online research.
• The new trailers announced in February will most likely have changes by the time they hit the dealership lots. And then more changes later in the year. For example, the 2018 Keystone Montana 3120RL is a recent new floor plan and just came out. That trailer caught our eye as a 35’ option that retains the same foundation construction as the longer units but with greater cargo capacity.

• I think we can reasonably expect a new trailer to be discounted 25% off MSRP. And if purchased as last years model, anywhere from 30 to 35% off MSRP. That’s my goal anyway. I’m not sure, but dealers may be able to manipulate the “MSRP” price so shopping around to get a better idea on starting price is a good idea. Either way, the deal has to be fair for both the seller and buyer.
• We have been hitting the local RV shows hard since 2015, often spending two days touring. In 2015 we used the show to decide on a fifth wheel because we want to be more comfortable when parked. If we planned to move a lot more and wanted to be more comfortable when traveling, we would have gone with a motorhome. Between the 2016 and 2017 shows (and dealership’s lots) we were able to finalize a floor plan which is the rear living room model. We also learned a few of our must have items.
• The 2018 RV show, considered a holiday around here, is next week. I’ve got my list of questions done by manufacturer. We plan to spend a lot of time checking the details such as do the kitchen and other storage areas work, shower size, electronics, seating and more. Thankfully our short list of brands to select from is down to a few and will most likely become even shorter after next week. All the brands we are interested in come to our local show other than one. A new RV friend toured that one for us earlier this year and reported back.
• We expect to buy as earlier as next fall. I’m open to holding off to early spring of 2019 as a last resort. We want to use the trailer for vacation before “retirement.” And to a lesser degree the trailer might become our go to home in the event our current sticks and bricks sells quickly once we put it on the market in the spring of 2019.

I’m looking at the RV and truck budgets as a sum total. We might save a little on the truck and spend it on the trailer. Or we might try and beat the budget and put the extra in our account for travel. Some might think this is too much to spend for something that depreciates and especially with a big chunk of one’s lifetime savings. I’ve come to believe RV living and travel is a calling. It’s something we got to do.  I’ll leave it at that.

Budgeting Part Three – Draft Expense Budget and Details by Line Item (coming soon)