Our waterfront campsite at Foscue Creek Corps of Engineers Campground, Demopolis, AL, 09/05

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Financial Considerations In Pursuing The RV Dream

You are excited about the RV Dream, but you have questions about financial considerations.

  • How can I possibly pursue the dream with my current financial obligations?
  • How much does it cost to live on the road?
  • Can I earn my living expenses or at least a portion of them on the road if necessary?

    We will attempt to address the first two questions on this page. Earning income on the road is addressed on the Earning A Living page.

    A Few Notes About This Page

  • Now this is a very long, very detailed page. I have considered dividing it up into multiple pages numerous times, but I think it works better as it is if you have the patience to stick with it. Print it out if it works better for you. :)

  • Also, keep in mind that this page is written from the perspective of someone going from a steady corporate paycheck to no guaranteed income at all. The page was developed keeping in mind those with similar circumstances. Things are much easier if there is a fixed income that will be there during full-timing.

  • Finally, we don't like debt and recommend against financing anything even if you have a guranteed income that will support payments. However, if you must finance to live the RV Dream, do what you have to do. Just please be careful!

    How can I possibly pursue the dream with my current financial obligations?

    The quick, easy, some may even say smart aleck, answer is to get rid of those financial obligations. My best advice is to get yourself in position where you have no debt and no major expenses that will have to be financed in the future.

    Easy? No. Doable? Absolutely!

    What are the obstacles to overcome?

    We firmly believe that most people will never follow their dreams because they are lured into living above their means by societal influences and slick advertising. Why do we have to have the biggest house we can afford, the nicest electronics, the private schools for the kids?

    So many people (my estimate is about 85%) are one significant event in their lives from bankruptcy or home foreclosure. An unexpected death, injury, accident, illness, job loss, or divorce can bring families crashing down financially.

    Now I am not a pessimist by any means, and dwelling on these possibilities keeps us from living. However, foregoing some of the instant gratification in our lives and being in financial position to easily withstand tragedies allows us to live easier, with less stress, and more capacity to concentrate on the important things.

    Oops! Sorry for that little tangent. I don't mean to preach. It's just that I am passionate about people being in control of their lives and being able to make decisions to pursue dreams. Everyone gets caught in these traps and we don't even question it, so it seems normal.

    So my goal is to get you thinking that you don't want to be normal anymore. I want you to want to be weird - have no debt, never buy on credit, save money, pay cash for stuff. Then you will not be tied to having to keep a job you hate or tolerate just to make payments, and you can follow those dreams whatever they may be.

    How did we get in the position to follow our dreams?

    There is a very simple financial program that Linda and I have been following for years. It is based on the Dave Ramsey Financial Peace series of books and workbooks and the subsequent updated versions ("Financial Peace" was originally self-published in 1992 and I read it about that time).

    The gist of the philosophy is that the borrower is slave to the lender and cash is king.

    Borrower is slave to the lender means that we work for our mortgage company, car finance company, bank, credit card company, etc. Because we finance everything, we don't work for ourselves and our family. We spend too much time, both literal and emotional, paying our debts.

    Cash is king means that you will spend less if you use cash to buy things. Even if you pay off your credit cards every month (you are rare if you do), statistics show that credit card and even debit card users spend more than cash purchasers. There is something psychological about paying cash. It is somehow more precious and you try to hang on to it longer. Now, with that said, we are almost exclusively debit card purchasers. We get $200 in cash about once every three months.

    Dave does address saving and investing for college and retirement, but he professes a series of “baby steps” to establishing an emergency cash fund and getting out of debt first. Following the "baby steps" using a "debt snowball" is not easy and takes what Dave calls "gazelle-like" intensity. It's work, but those that cherish their families and their financial security do it all the time.

    In addition to work, it takes sacrifice, but thousands of people are following the simple plan and calling into Dave’s radio show to announce their freedom from debt every Friday.

    Sure there are other programs and books on getting out of debt, but I have been listening to Dave for years (and still do as we travel down the road) and it is the simplicity and common sense of his philosophy that helped us get to the point of having zero debt except for the 15 year mortgage on our prior home by the time we were 40. And once we sold our house to live our RV Dream, that debt was gone too.

    This is the plan that has allowed us to overcome our stupid financial moves. It is the plan that allows us to pursue our RV Dream with a sense of tranquility. These are the reasons why I am comfortable promoting a system that will help you to your own financial peace, whether you actually ever live on the road or not.

    Below you will find links to a few of Dave's easy to follow, common sense, financial books. Please, for the sake of your sanity and your family, just get started!!

    What is your financial situation?

    You first have to understand your current financial situation down to the penny. You may already know it, and if so, moving forward will be easier. But you may be one of those people that just wants to make sure the bills are paid and not really have a clue what money is coming in and what is going out of your household.

    It is crucial that you understand your own finances and how to create and stick to a simple budget. Unless you are wealthy enough to go on the road without a financial care in the world, you will be faced with financial decisions that will have an affect on your enjoyment of the full-timing lifestyle.

    Trust me on this. Get all of your records together - pay stubs, checking account statements, monthly bills, savings account statements, retirement statements, etc. Sit down with your potential traveling companion (for simplicity I will use the term spouse from this point forward), and list all of your income and all of your expenses.

    You will be shocked by where your money goes, but you must understand it in order to prepare for your dream life on the road.

    Getting your financial bearings for the road.

    Once you have compiled your income and expenses, start eliminating.

    Eliminate the income that you will be giving up by going on the road. If you have some fixed income from retirement, investments, a trust, etc., great!! If you actually love your job and you can take it on the road, great!! However, if you, like us, have to give up that steady paycheck to live out the dream, you need to figure out what your actual income stream will be the day you quit.

    Now eliminate the expenses that you will not have on the road. Don't worry at this point about the expenses that will result as part of being on the road. Your goal here is just to be left with your current obligations and necessities that you will have no matter what.

    Let's see if I can help with our own example. First, we sold our home, so we no longer had a mortgage payment, homeowner's association dues, homeowner's insurance premiums, gas bills, electric bills, water bills, local and long distance phone bills, internet connection and internet service provider expenses, trash collection and recycling bills, real estate taxes, security system bills, cable bills, housecleaning expenses, landscaping and grass cutting expenses, or general maintenance expenses.

    Fortunately, we did not have car payments, but if we did, we could eliminate those plus the personal property taxes, licensing fees, maintenance, and gas. Again keep in mind we will have to replace some of these expenses, but don't worry about that yet.

    We could eliminate our country club dues (and the extra money we spent at the club just because it was convenient). We each belonged to a gym, so we could get rid of those monthly fees.

    Well, you get the idea. By going through this little exercise you are probably saying to yourself "Hey this RV thing is starting to sound really great - we don't need any money at all."

    Hold on there! Don't get carried away. We now have to add back expenses that you will have on the road that replace many of those above.

  • Mortgage Payments are replaced by Campground Fees (and RV Paymets if you financed)
  • Homeowner's Assoc. Dues are replaced by RV Club Dues or Campground Membership Dues
  • Homeowner's Insurance is replaced by RV Insurance
  • Utlility Bills are replaced by Hook-up Fees and Propane Costs
  • Phone Bills are replaced by Cell Phone Bills
  • Internet Expenses are replaced by Wi-Fi, Cellular Broadband, or Satellite Internet Charges
  • Trash Collection is not replaced
  • Real Estate Taxes may be replaced by Personal Property Taxes
  • Security System is replaced by RV Security System or Security Devices
  • Cable/Satellite TV is replaced by Cable Hook-up Fees or Satellite TV Charges
  • Housecleaning is not replaced
  • Landscaping is not replaced
  • General House Maintenance is replaced by General RV Maintenance
  • Car Payments may be replaced by Payments on a Tow Vehicle or Vehicle to Pull
  • Fuel is replaced by More Fuel (maybe)
  • Vehicle Licenses are replaced by RV Licenses (and Tow Vehicle Licenses or Towed Vehicle Licenses
  • Vehicle Maintenance is replaced by Tow or Towed Vehicle Maintenance
  • Vehicle Insurance is replaced by Tow or Towed Vehicle Insurance
  • Vehicle Taxes are replaced by Tow or Towed Vehicle Taxes
  • Food is Food
  • Clothing is Clothing
  • Entertainment is Entertainment

    Now the trade offs in the total amounts of expenses are going to be quite significant and some expenses listed above as "replacing" current expenses will be optional. But the point is that you understand the full-time RV gig is not a pauper's way of life.

    Now let's put some numbers to the RV Dream life.

    How much does it cost to live on the road?

    Since I like to look at this from a monthly budget standpoint, we will take expenses one at a time on a monthly basis and attempt to create a moderate budget.

    Campground Fees
    While on the road you have to park somewhere every night of your life. The fees to overnight range from $0 to $50 per night and even much higher in warm areas during the winter.

    It is unlikely that you will find free parking every night (although there are some out there that cringe at the thought of paying for overnighting). It is also unlikely that you will stay in a $50 a night RV resort every night ($1,500 a month).

    So we will use a $25 a night average which is $750 in a 30 day month.

    RV Payments
    Now if you follow my advice, you should not have any RV payments. You will have either saved enough money to pay cash for your RV or used the proceeds from the sale of your house and stuff to pay cash for your RV.

    Therefore, you are on your own in including any RV payments in your budget.

    RV Club Dues and Campground Memberships
    There are numerous RV clubs that provide members with various levels of benefits. I will discuss these and campground memberships in more detail on the RV Clubs page which you can access through the Preparing To Full-Time page.

    These dues and memberships also vary greatly from less than $50 per year to several hundreds. From my research I will presume that you will join 2 - 3 RV Clubs at a cost of about $100 a year or about $8 per month. These clubs will more than pay for themselves in discounted campground fees, other discounts, resources, and friendships developed.

    RV Insurance
    Insurance costs vary widely depending on the type of RV you select. Another factor is the state you select as your domicile. I really want to help with this insurance price question, but it varies so much from state to state and rig to rig. Let's include $100 a month in your budget for RV insurance (ours is around $75). For more information go to the Insurance Considerations page.

    Hook-up Fees and Propane Costs
    Most campgrounds include water, electric, and sewer (if available) hook-ups as part of their fee. In rare cases some, however, charge hook-up fees in addition to the base site rental charge. These hook-up fees generally run a couple of dollars a night when they are separate. Or, especially in the case of monthly stays or longer, your electric might be metered.

    Propane or LP (liquid petroleum) costs will depend on usage (RV tanks & propane bottles for grills, lanterns, etc.), but will generally run $25 or less a month unless you do a lot of cold weather camping. If you hang out in cold weather a lot, that figure could run over $100 a month. So let's assume some cold weather camping and budget $50 per month for propane and hook-ups in our moderate budget.

    Cell Phone Bills
    As necessary as cell phones have become in our daily lives, they can be an invaluable tool for full-timers. Whether just for peace of mind in emergencies, to keep in touch with loved ones, or to make campground reservations on the road, a cell phone, while not absolutely necessary, is a tool that we are not willing to do without.

    I personally like the national plans that have roaming and long distance included. The fewer surprises on the monthly bill the better. It appears that Verizon Wireless, AT&T, Sprint, and T-Mobile are the only four national coverage players anymore. All have similar national plans with the big difference, in my mind, being coverage.

    All four have holes in their coverage in rural areas where some RVers want to be. But Verizon seems to have fewer holes than the other three. But don't take our word for it. Check out this article on the RV Mobile Internet Resource Center: The Four Major U.S. Carriers - Which Is Best For RVers?.

    For numbers sake, let's add $80 a month to our budget to take into account taxes, etc.

    Internet Hook-up Fees or Satellite Internet Charges
    Internet costs are largely dependent on how often you need to be connected and the performance and convenience you need to be connected. More and more campgrounds are offering Wi-Fi. Even some public campgrounds (state parks, city parks, etc.) are adding Wi-Fi. Many commercial campgrounds at least have dial-up connections from a general area.

    If your need for internet is occasional, you can get by on virtually nothing. Local libraries generally have free access as do many campgrounds.

    At the other extreme, if you need almost constant access due to work, the maintenance and monitoring of a website, or you just want information at your fingertips, satellite internet may be for you. The speed and convenience of having a satellite connection in your rig is not without a healthy price, however.

    There are very few satellite internet options out there right now and it may cost $5,000 or more to install one with a monthly access fee of $80. For now let's add a moderate $70 per month to our budget for internet which will cover a cellular or satellite broadband connection.

    Dump Station Fees
    If you have read any of the RV books that I have recommended, you now know that there are fresh water, gray water (kitchen, vanity, shower drain), and black water (toilet) holding tanks that need to be emptied. This is one of the most unpleasant things about full-timing. But it has to be done - you will no longer take for granted how easy we have it in our modern plumbing system stationary houses.

    The good news is that many campgrounds have sewer hook-ups, so your rig can be much like a conventional house once you hook up. However, you cannot avoid dump stations forever. Almost all are free and can be found at campgrounds, at interstate rest areas, and some truck stops.

    However, I will caution you that many people have abused dump stations. These slobs dump things that dump stations are not meant to handle. They do not follow proper procedures and make unbelievable messes that are obviously very unpleasant to clean up. Some places starting to eliminate their dump stations or charge fees due to the few idiots that ruin it for the rest of us. So, be sure you learn the proper way to take care of your necessary disposal.

    Believe it or not there is a website that can help you locate dump stations across the United States. It is RVdumps.com. This website offers dumping tips as well as station locations. You can also order an RVer's road guide in book form, on CD, or ebook form that can be downloaded.

    Again almost all dump stations are free, but there will be times when a campground may charge a fee (especially if you are not a registered guest). We will not include anything in our budget for this, but be aware of the possibility.

    Personal Property Taxes
    In most states you will have to pay personal property taxes OR annual registration fees for your RV and tow vehicle or towed vehicle. Some states charge both. Registration fees are usually flat annual fees while personal property taxes are based on the value of the RV or separate vehicle.

    The range on these fees and taxes varies widely from state to state. This is one reason full-timers are very selective about becoming "residents" of particular states. It could mean the difference between a few dollars a month or a few hundred dollars a month in your budget.

    Let's assume you choose a state that has personal property taxes just to be conservative. We will include $50 a month in our budget as an estimate. If, for whatever reason, you have to maintain residency in your state and its personal property taxes are not favorable, it could mean the difference between being able to go on the road or not. Do your research.

    RV Security System or Security Devices
    I put this category here just to remind you to consider security. You probably will not have a monthly expense for security, so we will not include one in our budget. However, you may want to budget for some up-front security system or security device expenses.

    These can range from a security light or small alarm for less than $100 to a full scale security system that may cost up to $1,000 installed. Security is an issue on the road for some, but your most important defense is caution and awareness.

    Most of my research indicates that you will be much safer as a full-time RVer than you are in your own home. However, if you want that extra peace of mind, spend the money - it will be well worth it.

    Cable Hook-up Fees or Satellite TV Charges
    I hope that being on the road out in nature and running from the winter cold, will help with my TV consumption. I am sure that I will not be able to give it up completely, however.

    If you just cannot live without your TV, you have some options. Of course you can use your basic antenna and signal booster to pick up local feeds though they may be fuzzy in some areas. But many RV campgrounds near urban areas have cable TV hook-ups for a small fee. However, if you plan to be in more rural areas, satellite TV like DirecTV or Dish Network may be your only option.

    Let's budget $70 per month for TV access. Keep in mind the installation fees up front for your satellite or costs to run cable wiring in your RV if it is not already built in.

    General RV Maintenance
    I have said it before and I will say it again - I have virtually no maintenance skills. I am sure they will develop, but I have to have some budget for maintenance and repairs for the things I cannot do myself.

    Your monthly budget for maintenance may depend on your skills and the age of your rig. I am going to include $50 a month in our budget. That should be a reasonable starting point - $600 per year. Hopefully, it will be less than that, but it never hurts to plan.

    Payments on a Tow Vehicle or Vehicle to Pull
    Once again, if you take my advice, you will not have these payments. Your lifestyle will have much more flexibility and enjoyment without them. If you have to finance a vehicle, make sure it is in your budget. But we will not include such payments in our budget here.

    You will have gas costs. How much depends on how many miles you expect to travel each year, how long you expect to stay at stops, your gas mileage, and of course, gas prices.

    What you may find surprising is that you will probably travel fewer miles in a year than you do now, and your gas expenses could very easily go down (especially going from a two or more car family to one vehicle). Yes, even at $3.50 a gallon and getting 8 miles to the gallon.

    Most full-timers do not want to drive that much, and they don't want to have to break camp every day or two. I have read about many that will never drive more than 100 miles on a day they decide to move. We try to stay in the 150 - 200 miles range on travel days and stay at least four days in every campground.

    Let's assume we get 10 miles per gallon and we want to travel 1,000 miles per month. That would take 100 gallons and $300 at $3.00 per gallon or $350 at $3.50 per gallon or $500 if things get really crazy at $5.00 per gallon.

    We are going to include $400 per month in our budget. Adjust depending on your gas mileage, how much you want to travel, and gas prices.

    By the way, there are several websites that give up to date average gas prices by state and that can help you locate the cheapest gas/diesel in your area. Also, Flying J, an RV friendly chain of gas stations, maintains an up to date web page of gas prices by state by location.

    Tow or Towed Vehicle Maintenance
    Let's include another $50 per month for maintenance/repairs for the tow/towed auto. Again, this expense may depend on the age of the vehicle and your skills as a mechanic.

    Tow or Towed Vehicle Insurance
    Auto insurance also varies by state. We will include $100 per month in our budget to be conservative (ours is $60 for our pick-up).

    Tow or Towed Vehicle Taxes and Registration
    These are more expenses that vary by state. We are going to include $30 per month in our budget which will cover $360 per year taxes and/or registration for just the tow/towed vehicle.

    This is a tough category to put a number on. I have a friend that says she would "rather eat to live, not live to eat." However, food and its taste are very important in a lot of peoples' lives.

    I have seen monthly budgets for food (dining out and groceries) in the $100 - $200 range and also in the $1,000 - $1,500 range. Some full-timers never cook and others never dine out. Keep in mind that $20 a day per couple turns into $600 per month. If you are dining out, $20 a day does not go very far.

    I am going to include $450 a month in our budget. I believe that $350 a month in groceries is reasonable. The other $100 a month gives some flexibility for at least one splurge a month for a nice dinner out and covers all those quick fast food stops and purchases at the snack shack at the attractions you visit.

    Clothing, Laundry, Hair Care, & Grooming
    Due to space concerns alone, you will be able to reduce your clothing purchase budget when you go on the road. However, you will probably find you wear the same comfortable clothes over and over, so they may wear out faster.

    Also, you will still have to wash clothes - either with a washer/dryer hook-up in your rig or in a campground or public laundry. Here is a link to our Forum for a discussion of the pros & cons of a washer/dryer in the rig: Washer and Dryer in the Rig? If you choose not to have a washer/dryer in the rig, you will have to budget for laundry expenses. We don't have a washer/dryer in the fifth wheel, and we average about $30 a month for laundry.

    You will also be able to reduce your grooming expenses because you will be more relaxed about your appearance and because your options will be a little more limited on the road. You will probably opt for the $9.00 haircut rather than the $30.00 salon cut (we purchased a $30 clipper set and Linda cuts my hair).

    But you will still have to buy shampoo, toothpaste, soap, etc. You can include these items in your grocery budget since that is most likely when you will pick these things up.

    So, for clothing, laundry, hair care, & grooming let's include another $75 per month.

    By entertainment, I mean admissions to parks, movies, and other attractions as well as costs to attend plays, shows, and concerts, and costs of books, magazines, newspapers, and costs of golf, fishing gear, hiking gear, photography gear, etc. These can add up quickly.

    Let's include another $200 per month in our budget for entertainment. As much fun as it is to sit by the campfire and talk, you will need some additional stimulation once you have been at the full-timing thing a while.

    Health, Dental, and Life Insurance
    Before we total everything up, we have to look at one last major expense - insurance for you. Again, this is a tough one because it varies so much with the individual and by state.

    However, these expenses must be addressed because they may be the difference between going on the road or not. Many full-timers have actually decided to be without insurance so they can go on the road. That is not an option I would recommend, but I can see why it is a path taken.

    If at all possible, I would recommend having health policies with as high a deductible as you can stand to keep your monthly premiums lower. (By the way, the same goes for RV and auto insurance.)

    For our purposes, I am going to include $500 a month in our budget for insurance premiums. Many of you (especially with Medicare) will be able to do much better than that, while others would jump at the chance to only pay that amount. I think it is a good middle of the road figure. Our monthly expenses for insurance are $245 ($155 Health, $80 Life, $10 Umbrella). So why am I using $500 a month? Because we are younger than most and in great health, so our rates will be lower than most - for now. Also, we are self-insuring for dental and will pay as we go.

    That is a lot of expenses! Let's look at the final tally.

    The total of all of our expense items for our budget from above comes to $3,033 per month or $36,396 per year. Depending on your circumstances you are either saying to yourself "There is no way I can live on that paltry sum" or "There is no way we can afford to go on the road full-time."

    Before you jump to any conclusions, keep in mind that this is what I would consider to be a very moderate budget. Many line items can be tweaked up or down depending on how you need to live your life as a full-timer.

    There are full-timers out there living on $1,000 per month by being extremely frugal - we have met two. There are many others that would not go on the road with a budget of less than $5,000 per month.

    We fall somewhere in the middle. We are averaging about $2,333 per month ($28,000 per year) in pure living expenses. However, we have spent more than that for various one-time expenses like upgrades to our rig and special things for our lifestyle that we didn't realize we would want before we started. I think we can get by on about $2,500 per month ($30,000 per year) pretty consistently, although $3,000 a month ($36,000 a year) gives a little room for unexpected items, emergencies, and income taxes.

    If we decided to volunteer or workamp year-round, we could get by on even less. With free campsites and less travel, we could actually get it down around $1,500 a month ($18,000 per year) fairly easily.

    I hope that we have provided you with some valuable information. I can see why the question "How Much Will It Cost?" is not answered very well in the RV literature. Each line item can vary so much depending on you and your circumstances.

    To see the budget in table form go to the Sample Budgets page. You can compare three budgets - Thrifty, Moderate (established here), and Money Is No Object. You will at least have much more information on the cost of living on the road than we had when we started. Good luck!