How we prepared our finances for full time RV living
Just getting one’s finances in order to begin with is a challenge for many. But preparing to uproot your family, sell everything, move your family into an RV and gallivant all over the country is another level of financial challenge.
Do you already have a plan?
If not, let’s look at some of the financial challenges you’ll face living full time in an RV. And also, some of the expenses you’ll face preparing to live in an RV.
- Avoid a new rig at all costs. Used is the way to go, period.
- Make sure you budget enough money to take the first couple of weeks off from work (at a minimum). It’s overwhelming enough without having to work. And you’ll appreciate the additional time to get acquainted with the new lifestyle.
- Keep $10k at a minimum set aside for emergencies and rig repairs.
- If you don’t already, start tracking your finances several months before leaving.
- You will spend more money in the beginning than you expect. Once you have the lifestyle figured out, it’s easier to reign in the expenses.
- Set up at least three accounts to keep specific funds separate in case one is compromised.
- If you can help it, get rid of the debit card and only use a credit card.
What Are Some Unforeseen Expenses (And Some Of Our Expenses) Prior To Full Timing?
- Servicing the engine on the RV or Tow Vehicle before departing (varies, but not cheap)
- Having the hitch professionally welded and aligned for the tow vehicle and trailer ($160)
- Backup battery source ($1100)
- Water Filter System for Rig ($200)
- Additional water storage system. We like Scepter jugs ($100)
- Organizational/Rig Necessities ($700)
- Portable air compressor for tire maintenance ($200)
- Topping off the propane tanks at Tractor Supply ($30)
- Stock up on pharmaceuticals (Varies depending on your insurance coverage)
You Need A Financial Plan
Bottom line, a financial plan for full time RVing is a necessity. But it’s not rocket science.
Whatever you currently spend now on your monthly budget will be close to what you spend full timing if you move infrequently.
But move every few days and your fuel expense will exceed your old mortgage or rent.
Of course, if you finance your rig and toad/tow vehicle, your expenses are going to escalate quickly. I don’t recommend this as an option unless you have a stable income on the road.
Whatever type of budgeting or planning system you use is up to you. But, without a plan and tracking system, you’ll “accidentally” blow through funds quickly.
So, if you haven’t already, start tracking your finances now.
Debt Free Is The Way To Go
I get it. That’s the goal for most. And starting out on the road may have to be preceded by living with family while paying off your debt.
And again, try not finance a brand new RV to go full time. Buy something used you can afford with money left over for emergency maintenance. Even if you’re sitting on a pile of money with a high salary, it’s still senseless.
When my business was making us a lot of money, I was far more cavalier about expenses. But even then I would not have accepted such a rapid depreciation (on a liability).
Besides, the lessons we learned with our used rig have been priceless. And it’s better built than most new rigs. I’m definitely a fan of ORV!
Takeaway: Avoid a new rig at all costs. Used is the way to go, period.
How Long Do You Plan To Travel?
Give yourself a definitive quantified timeline. Then set your budget to that timeline. You don’t have to stick to it, but you need a starting point and an arbitrary end for calculating finances.
If your funding is low and you have no income, shorten your trip, so that it fits into your budget.
It’s astounding the opportunities that present themselves while you’re on the road. If you’re between jobs, it’s also eye opening to see how other people make a living.
Ideas and opportunities present themselves when you clear your mind with camping. That’s my stand and I”m sticking to it!
Can You Work During The First Part Of Full Time RVing?
Don’t count on working at all if you’re trying to get somewhere far away quickly. This is especially true if you’re new to the RV lifestyle.
Even if you stay close to start and move every few weeks, there’s still a steep learning curve. You can only spread your energy so thin.
Takeaway: Make sure you budget enough money to take the first couple of weeks off from work (at a minimum). It’s overwhelming enough without having to work. And you’ll appreciate the additional time to get acquainted with the new lifestyle.
What Will You Maintain As A Monthly Income?
If you already have a mobile job with a fixed salary, this is easy. The complicated part is acquainting yourself with the new lifestyle while working. And securing reliable internet in your rig.
It can certainly be done, but the financial barrier can be steep initially.
We’re getting better at finding public WiFi and using a VPN to do our work. It’s funny how the clock no longer dictates when we work. Access to WiFi determines that time frame for us.
If you’re living off savings while building a business, sticking to your weekly/monthly budget is crucial. To state the obvious, divide the non-emergency fund savings by the total months of travel.
Then stay under that number each month. Make sure you build in money for excursions and a few treats. You’ll go nuts if you don’t!
And you’ll likely still do those things even if it’s out of your budget. So, build it into the budget. I’m just being realistic!
How Much Should You Keep In Your Emergency Fund?
To maintain peace of mind, I would not have less than $10k in an account already budgeted for rig/auto repairs or medical emergencies.
It’s as simple as that. That money is not to be used for anything else, period.
If you never use it when you finish, invest it and keep it as an emergency fund. There’s a lot to be said for being prepared.
Takeaway: Keep $10k at a minimum set aside for emergencies and rig repairs.
What Does Your Family Currently Spend Each Month For Everything?
We addressed this earlier. But if you don’t currently track your finances, it’s time to start.
I like using open source software, but if you’re a fan of Quicken or some of the more popular software, that’s fine.
I used QuickBooks for my business and Quicken when I lived in a sticks and bricks home.
I currently use GnuCash for both the online business and personal finances. If you don’t have any experience with bookkeeping or accounting, there’s a learning curve. But the price is right!
Takeaway: If you don’t already, start tracking your finances several months before leaving.
Any Expenses Can You Trim To Take More Adventures Instead Of Buying Stuff?
There are a lot of blogs and vlogs from full timers suggesting all kinds of great gear. Seriously, take it with a grain of salt.
Just because they recommend it, doesn’t mean you need it (whatever it is). There are ways to acquire all kinds of things on the road.
Pack less and wait a few weeks to see what you really need. Then use the saved funding to do fun things! You’ll also appreciate less weight in your rig. I can’t stress this enough!
What’s The General Consensus For Monthly Expenses On The Road?
Other blogs state $2-4k a month depending on the family size. I’m in agreement.
Our first month was more expensive because we moved frequently to escape the cold. In fact, we spent $360 in fuel the first week alone from towing daily. Diesel adds up fast!
You’ll Spend More In The Beginning Than You Think.
Your initial destination plays a role in your expenses. For instance if you’re trying to escape hot or cold weather, you’re likely going to drive daily. And let me just say, moving your house every day is exhausting.
We fast-tracked it to Florida to escape the cold averaging 250 miles a day. Our fuel expense added up very quickly.
If you’re not careful with your groceries store trips, you’ll spend more than usual. Because you can’t store as many groceries, you’ll go more frequently.
And it’s easy to spontaneously buy things you don’t need, just because you’re there. Oh and keeping up with store coupons is near impossible.
I’m not a fan of Walmart, but so far, it’s the least expensive place to shop.
Every time I shop there, all I can think of is Adam Sandler smashing a canned good on the floor and saying “Microsoft stock is down kid, we gotta save money.” A bit extreme, but you get the point.
Takeaway: You will spend more money in the beginning than you expect. Once you have the lifestyle figured out, it’s easier to reign in the expenses.
Where Should You Keep Your Money?
Set up several accounts to separate what you’re keeping, spending on the trip and emergencies.
If one account is compromised, you have others to make up the difference while you’re recouping any damage.
I keep two months of funds in one checking account. There’s an additional checking account for the emergency funds. And finally everything else stays in a savings account connected to the investment portfolio.
I move money into the travel checking account as needed.
It goes without say that all of these accounts should be mobile friendly.
Takeaway: Set up at least three accounts to keep specific funds separate in case one is compromised.
Should You Carry A Lot Of Cash?
Absolutely not! It’s not worth the risk. Keep some cash for small expenses or boondocking fees.
Otherwise, use a credit card. It’s safer and easier to track your expenses.
It pains me to say this as someone who owned a small business, but the rewards on credit cards help when you’re on the road.
Credit Card or Debit Card?
Don’t even get me started. I don’t believe in using debit cards, but unless you bank at a national bank, walking in and withdrawing cash from a teller is not an option.
So, use your debit card as an ATM card. Otherwise, make all of your purchases with a credit card. If it’s compromised, it’s a lot less of a hassle. And you haven’t lost your money in the bank.
If you use a debit card, only keep a small amount of money in that account and transfer in as needed.
It’s a pain until it’s compromised and you don’t have the necessary funds to travel. In other words, it’s a pain that’s worth the effort!
Takeaway: If you can help it, get rid of the debit card and only use a credit card.
There are several important takeaways from the article. Primarily, it’s to track your finances! What method you use is moot, just do it.
Secondly, keep your money in separate accounts in case you are compromised. It also helps to prevent you from spending your emergency funds.
Third, inflate your perceived expenses by at least 10% on the road. Money evaporates if you’re not careful!
Forth, avoid using a debit card for purchases and stick to a credit card. It’s safer.
Lastly, stay under your monthly budget. After several months, you’ll have additional funds for saving, investing or doing something fun.
Isn’t that the whole point of uprooting your family and going full time in an RV?
How do you track your funds and stay on budget on the road?