OUR ROAD TO FULLTIMING
July 27, 2000: STEPS TO A FULLTIMING BUDGET
Every so often, someone on the Fulltimers Forum of the RV Club asks about the budgets of the fulltimer. How much does it cost to pursue this "life on the road"?? Is it as affordable as it seems?? What if there are still payments on the rig?? Everyone is different in their financial situation, but when Ron posed the question, "How much will it cost??", to me last summer, I went into immediate "research mode"!! As we are getting closer to our dream, I have been assessing and reassessing where the money goes in our household. Now, I would like to share how I am trying to figure this all out.
My first step was to assess where our money is going now, in a "House" and working situation. The way that the income is spent now will most likely be the way that the money will be spent in a "Fulltime" situation, with some exceptions, of course. I use Quicken to handle our finances, so it was easy to go back and generally track our expenses. Here are just some of the general categories that I used:
- Housing, including payments, insurance, utilities, and taxes
- Groceries, including pet food and cleaning products
- Rig, including payments, insurance, and DMV
- Miscellaneous, including
- Clothing
- Dining out
- Gas
- Gifts
- Health care
- Life insurance
- Office supplies
- Vehicle maintenance
- House maintenance
- Health care
- Miscellaneous
In comparing "House" expenses to "Fulltime" expenses, some of the categories change or are combined in a different way because of the different lifestyle. These are the categories that I've come up with after reviewing budgets from other fulltimers:
- The "Housing" category obviously becomes "Campgrounds".
- The "Rig" category stays the same.
- A new category "Communications" is established to include cell phone, internet, satellite, and mail forwarding expenses.
- "Fuel", or gas, becomes a separate category because of its importance.
- "Groceries", of course, remains the same.
- "Medical" becomes a category for health insurance, prescriptions, and co-payments.
- Instead of "Miscellaneous", the other expenses are divided into "Fixed" (expenses that occur every year) and "Variable" (expenses that will vary from month to month).
The next step is finding out from where, or figuring out where, your income will come from while on the road. Ron has been with the same employer for 32 years (something quite out of the ordinary these days), so he has a pension plan, even though he is retiring early (before 65). We consulted a financial planner in October 1999 who is familiar with his company's retirement plan. Initially, we were told that there would be no problem with what we are trying to do. That changed somewhat with a further consultation, but we have figured out what we need to do to accomplish our goals.
Everyone's situation is different, but in our situation, Ron has been contributing to a stock plan, along with his employer, which is tied to the 401K program. This account cannot be accessed until age 59½ , without a 10% penalty, which is true of any money linked with a 401K plan. (The stock isn't doing too well right now anyway!!!) His employer also has contributed to a "Special Benefits Account", which is a very unusual circumstance. This money can be accessed after retirement, according to the individual's specifications.
I have found from my research that the fulltiming lifestyle does cost less than living in a conventional home or apartment, but it still takes some careful planning beforehand. The bottom line is to assess your own financial situation by figuring out your "Net Worth". What do you OWN, and what do you OWE? The end result may be surprising. Then, ask yourself some of these questions: Are you old enough for, or already receiving, Social Security? Do you have a pension from a previous employer? Do you have stock investments? If you sold your home, how much would you net? Do you have other sources of income? Do you already own a "free and clear" RV, or do need a newer suitable rig? Are you willing to "workcamp" if necessary to supplement your income? All of these questions have a bearing on your own personal circumstances.
I haven't been specific about any dollar amounts for fulltiming costs because, as I stated in the beginning, everyone is different in their financial situation. Generally speaking though, I've found the median amount to be around $2400 to $2700 per month, with a moderate rig payment. The best way to lower that amount is to stay in one place for at least a month, taking advantage of the monthly rate at a campground and, subsequently, reducing traveling fuel costs.
Now, after listening to many "wannabes", on the Fulltimers list, telling of their preparations, we have made the following plans that fit our situation. The proceeds from the sale of our home should pay for the truck, although it is financed at the moment. Because our daughters don't want or need the majority of our furniture and artwork, we will have an estate sale after the house is in escrow. Those proceeds will go into an "emergency" fund, for the time being. At that time, we will also order the fifth wheel, which should be completed by the time escrow closes. We will be financing most of the cost of the fifth wheel, so as to have a "home interest" tax deduction. So far most things have been falling into place, albeit very slowly. Waiting for this new lifestyle to begin is really hard!!
I've tried to give some insight into the mysterious "fulltiming budget" question, and I hope that I have helped in some way. If you have any questions, or need more specifics, please contact me by email. I will certainly try to answer as best I can.
November 1, 1999 THE BEGINNING January 25, 2000 THE DOWNSIZING BEGINS February 6, 2000 RECEIPTS AND TAX RETURNS March 12, 2000 THE FIRST "DENT" April 27, 2000 DUMPSTERS, DOCTORS, AND TRUCKS May 24, 2000 OUR TRUCK DECISION July 2, 2000 BITS AND PIECES July 21, 2000 MEDICAL CONCERNS August 8, 2000 OUR TRUCK DELIVERY SAGA September 15, 2000 AN UPDATE ON OUR PROGRESS October 2, 2000 SIX WEEKS TO GO!!! October 15, 2000 MORE HURDLES CONQUERED November 14, 2000 ALMOST THERE!!! December 21, 2000 ELKHART.....FINALLY!!! December 21, 2000 LET THE COMEDY BEGIN!!!