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.
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 email@example.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.