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Can you save money by full-time RVing?


I think that for the most part the answer to that question would be a yes. However, it might depend on where you start with your economic situation. For this discussion I will assume that we all have been working for a living and are either retired or about to retire.

What brought this idea to my mind, was two articles that I recently read. One of the articles was from Trailer Life Magazine talking about what it cost to go full-time in your RV. The other article was from the Houston Chronicle that was written by Scott Burns, a syndicated writer for Universal Press Syndicate.

My wife and I are not full-time RVers but we have, from time to time, discussed the possibility of becoming full-timers and what it would entail. We have gone through the thought processes of whether we would lease the house or sell the house. If you lease your house, you always have a place to come back to if the concept of full-timing doesn’t work out. However, if you lease, you still have to pay taxes, insurance and possibly a few other items. From a pure economic standpoint, it would be better to just cut the umbilical cord, sell the house and make a clean break.

So, if you make the move to full-time RVing you have to sit down and get a handle on what it will cost to live in your condo on wheels. It will be much less expensive than living in a house but it will still cost. You will give up expenses like, taxes, lawn maintenance, homeowners insurance, cable TV, maybe a second auto and other expenses associated with running fixed living quarters. You will obviously carry some of your expenses with you to your full-time adventure. There will be nightly, weekly or monthly campground fees, food, gas, electricity at long term campgrounds, insurance on your RV and tow vehicle and clothing. You will need a phone, as in cell phone, possibly satellite and maybe a fee for mobile Internet. There will also be a certain amount of eating out. You can’t expect the wife to cook every night!

Obviously the money that you will have to spend will come from your savings, retirement accounts, such as 401(K) or pension and your social security. If you had a house to sell, then you can also use that money to pay off your rig or invest it for more monthly income. Other funds can come from work camping while being a full-time RVer. We have talked to a lot of people who work camp while living full-time in their camper. Whether you work camp or not depends on your financial situation or if you just need something to do.

So what does this have to do with the second article written by Scott Burns. In his article Scott introduces what he calls Life Capital Decisions. These are decisions that we make in regards to how we spend our money. He says that these decisions should be made early in our lives but they become more important as we near retirement. He then proposes a new measure for these decisions and calls it Lifetime Savings Equivalent. His article quotes statistics from the Employee Benefit Research Institute on the percentage of people who have adequate or inadequate retirement savings. By making certain financial decisions you can come up with and equivalent amount of money that you don’t have to have in retirement. He states that every $100 a month not spent eliminates the need for $30,000.00 in retirement savings. Another example he uses is of a person who might have a social security benefit of $750.00 per month at age 62. If that person delayed taking his/her social security until age 70 he/she would have a benefit of $1,320 per month. This would be the equivalent of having an additional $171,000.00 in retirement savings.

The example that is really relevant to this blog is when he talks about decisions related to shelter. Scott Burns has coauthored a book with economist Laurence J. Kotlikoff (“The Clash of Generations: Saving Ourselves, Our Kids, and Our Economy,” MIT Press). In the book they show that a retiring middle income couple can have lifetime discretionary spending – spending after income taxes, Medicare premiums and shelter – of about $15,000.00 a year if they stay in their home. They can increase it to $28,600.00 by selling their home and becoming renters. They can boost it to $38,800.00 by becoming full-time RVers.

Just the difference from owning and renting, $13,600.00 a year, is the same as adding about $340,000.00 to their savings. If they really wanted to “go the distance”,Scott Burns says that becoming full-time RVers could be like adding $590,000.00 to their savings. To see how they derive those numbers would be worth reading the book.

Everyone’s situations is different. The figures above look very enticing but there are other things to consider. For many people, looking at it like Scott Burns does could be the tipping point.

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