Well, here we are at the end of 2015 with our very first annual financial summary. Although we did some research when we started, many of our budget categories were wild guesses and I was so pleased by how many were at least close to our projected numbers. I can’t stress enough that the costs in Year One will probably be higher than in subsequent years, but it is also fair to say that we were trying to be careful with our money. Our operating costs were $49,409.98 and many of our friends who were out the first year were also spending about $4K a month. (This summary does not include all of the one-time expenditures, for more information on that please see the First Year By the Numbers post.) Let’s put that into context; we were living on more than twice as much when we were in a sticks and bricks, and more importantly, as soon as money came in it went right back out again. What matter the most to me is that we landed only $2,590 over our estimated budget for the year, which is awesome, and frankly somewhat miraculous. The great thing about Year 1 for us was I still had my corporate job so that gave us tons of breathing room. Year 2 will be much leaner as we rely on the income we can make on the road. Our stance next year will be putting money in and taking money out of our $30,000 in savings. If we spend down to $10K we will have to stop and get serious about making money for awhile, but it feels great knowing we have easy access to 6 months worth of costs. This lifestyle for us is an adventure and many other wonderful things, but it is also an experiment. Can two people with good health and good skills make enough money on the road to cover their costs AND continue to live a life full of enrichment? Next year will be the real test without a guaranteed source of income, but I feel so much better about the probability of our success after seeing these numbers. So let’s dive in!
Campground Fees – We budgeted $750 a month and only averaged $434 a month!!! What a great story, and largely due to work kamping, staying in state and county parks, and using our discount memberships. And for the record, we only had one Walmart stay and one Cracker Barrel stay in the entire year. I am going to reduce these costs in the FY16 budget, you can see the detail below.
Groceries – We budgeted $600 a month and ended up spending $701 a month. Anyone who reads the blog knows how we have struggled with groceries. Small, pricey rural grocery stores along with inadequate meal planning and eating joint meals with friends led to higher than expected costs. We have taken several major steps including meal planning and reduction of waste to help keep these costs down. We are also going to track this category in more detail in Year 2 separating food from non-food items and adding alcohol as a separate category as well. So I will be keeping the overall budget at $600 a month just splitting the money between the three categories. I will say though that we ate well and Lee lost 15 pounds this year. I have rediscovered my love of cooking and now we eat mainly fresh and local foods. Yes, we could eat cheaper tomorrow if I was willing to give up those fresh ingredients and meals with friends, but I am not. Let’s see if we can eat well and stay in budget in Year 2. As a side note Ellen asked what we spent in a sticks and bricks. That was about $800 a month or more so this is definitely progress.
Dining Out – We thought this category would be our biggest challenge and it was. Our budget is $150 a month and we spent $247 a month. Early on we started looking at eating out in two ways. Fuel (when we just need to eat) and experience (want to try the local cuisine, or go out with other people). Later in the year we tried, mostly unsuccessfully, to pack more lunches or to schedule our sight-seeing around meal times. This had some effect, but those only seeing things before noon or between noon and 6 is hard to do, especially since we like to take long day trips. Since most of the year we were packing everything in on the weekends, I am hoping this gets a little better. I will say this is WAY lower than it was in the sticks and bricks. We were spending hundreds a month in this category so it’s a major improvement. We have done an excellent job of not just picking up the check for everyone and that was really hard for Lee, but split checks is now the norm. We had a major struggle with drinking water instead of soda (at an extra $2.50) per meal and we are doing much better on that. Also, you see major spikes when we are around our family. On the positive side we did a great job when hanging with friends and although that hit us a little harder on the grocery side we definitely saved money overall. I am not changing the budget amount on this one. We simply have to do better.
Truck/Relocation Fuel – I am absolutely thrilled at this category because we ended up $500 to the good in aggregate. Unfortunately for the 2016 budget I had a company car with free fuel for the first 9 months and I am already seeing these costs rise. Our “hub and spoke” approach to traveling keeps our relocation costs down but adds to our “local” fuel expense. I am leery about using the numbers from the last three months only to set next years budget, but I am also aware we are traveling up to Alaska from Tennessee in May which will be a big fuel hit. But, we will be staying in one place from Mid May to Mid September, so hopefully it will balance out. Plus the cost of diesel has been very low most of the year and we can’t necessarily expect that to continue in 2016. So I think I am going to combine the categories into one Fuel cost and raise them a little. Unfortunately it’s going to take at least another year’s worth of data before I feel comfortable with what these costs will be.
Entertainment – Absolute home run, spending $375 less than our budget. We did really well in this category by focusing on free or near free activities. See my Things to Do under $10 page for more details. Occasionally we splurged but mainly we consistently stayed in the budget in this category. I am not going to change the amount for 2016, but I hope to see further savings in 2016. Truly, its all about the nature to keep this category low, but since we also like to experience other activities we sprinkle those in to keep it fun. One of the keys is to remember you can go back and you don’t have to do absolutely everything in an area.
Storage Unit – We kept a 10×10 for a few of our things and our two daughters. Starting in March we will be splitting the cost three ways with our daughters (every little bit helps) and then our plan was to get to New Hampshire to empty our piece and take it to my mother-in-law’s basement. I also need to get a physical so I originally thought I would do all that at once, but with Alaska I’m not sure what we will be doing there. In any event, I don’t regret this in the slightest. $840 was a small price to pay for not having to purge everything all at once and I am fine with letting it sit until I can deal with it.
Cell Phones/Internet/TV – To many this budget amount is ridiculously high and there is some fairness to that. We took advantage of an ATT double data deal right before we went on the road and have 80 GB of data available each month, and we use every bit of it every month. Plus we have added a second Verizon phone with 1GB of data for those areas where ATT doesn’t work, just so we can always have phone service. Every time we talk about changing this up we decide not to yet because we are mobile workers who rely heavily on the internet. Yes, there are some grandfathered unlimited plans out there, but we have a friend who works at Verizon and she was very clear that they put you in the slow speed traffic lane with those plans. Lee has had some success using free WiFi at libraries, coffee shops etc, but the bandwidth of those places is very hit and miss. Part of his video business is uploading huge files and we simply cannot always be someplace where there is free wifi or wait the 8 hours it might take on slow bandwidth to upload a file. We also tried Direct TV, absolutely hated it, and now we just download any TV we watch. We love this “on demand” approach and since we have been many places where we got no antenna television it continues to be important. So after much discussion we are going to leave this one alone, just change the budget to include the Verizon phone. We are always on the lookout for a truly stable internet solution, but until something better comes along, it is what it is. The good news is we can write-off 40% of these costs for business expenses which is a good thing.
Home Improvement – We spent $314 a month in this category. If Lee ever gets our Mods page done I could show you all the cool stuff we got for that and then maybe you would nod your head and think “not so bad”. Keep in mind this is parts only as I am lucky enough to have free labor with Lee. It is almost all modifications or enhancements to our living situation and every single one of those purchases made my life easier. So I struggle with this one as usual. What do we set it at for next year? Lee feels we have done most of what needs to be done but I do not agree. There is always new stuff you can do and Lee likes to tinker. It makes him happy. If we had plenty of revenue I would say screw it and raise the budget, but that’s probably not going to be the case, so we may leave it alone at $200 a month and see what happens.
Truck Insurance – This ran us $1505.56 and was worth every penny. When Lee put regular gas in the diesel engine Putting Regular Gas in a Diesel Engine and we lost our engine we filed a claim and ended up getting a new engine for the $1000 deductible which was a savings of $18K for the engine and a months worth of rental car fees. I don’t know yet if they will be raising our rates for this year but I am extremely happy with the service we received from Allied Insurance which is a policy we got from Miller Insurance company that specializes in full timers. Since this is the first claim we have filed in the 25 plus years we have carried our own car insurance I don’t feel bad overall, but since we were relatively new with Allied when we filed the claim unless their prices become extremely unreasonable we will be staying with them for a long time to come.
RV/Truck Maintenance – We had $600 dollars for the year here and ended up going over by $831 for the new front tires and alignment we needed on the truck. We had two great maintenance plans with Ford and everything including oil changes is covered, but tires and alignments are not. We believe that the truck tires were not aligned properly from the factory (since the wear was even on both front tires) and hope this was a one-time occurrence. The other money we spent was on my mobile office equipment in the truck and on putting Lee’s tools in the truck, also one time expenses. We will probably leave this at $25 a month though for windshield wipers and fluid, DEF outside of our schedule oil changes, and other incidentals, but hopefully it comes in under budget next year.
Gifts – Despite Lee giving me a hard time about this category I only spent $1055 or $88 a month on average and we used to spend that on Christmas alone. Still I was definitely over budget by $505. I have settled on just buying for nieces and nephews and our girls and their spouses. I am also buying my parents a mothers day and fathers day present. So I will budget that out and maybe add a little extra for the very occasional unplanned gift such as a wedding or special birthday. This is my Home Improvement category because I think all gifts are good all the time. But we don’t have an unlimited budget so will need to try to do better. Honestly though I am not trying that hard.
Electronics and Software – We spend $10 a month on Microsoft Office (which is tax deductible) and this includes music and games money. This category made me nuts in the beginning because there is nothing concrete to show for it, but really for the year $400 isn’t that much for all things software. I will adjust the budget to reflect the $400 a year as I think that is a fair dollar amount.
RV Registration – We are Florida residents and RV registrations are always in December so this is actually 1-1/2 years of registration. VERY reasonable compared to other states. For example, New Hampshire was around $1400 the first time we registered. If we would have registered in North Dakota we would have had to pay a one time tax of $2500 ( because we bought the RV in a no tax state). So really overall I was happy.
RV Insurance – We have a Full-Timers policy with $30K in personal items insurance, so I feel this is a very reasonable price. Thankfully we haven’t needed to use it, but well worth the piece of mind and although you might be able to find a cheaper policy, having one that knows you are a full-timer was really important to me. Again the Insurer was Allied and we purchased through Miller Insurance out of Oregon.
Tolls and Parking – Once we left Florida this pretty much stopped being an issue, but we did spend quite a bit in the Florida area.
Truck Registration – This was more than we expected, but the bulk of it was a one time transfer expense and again this was way higher in our prior home state of New Hampshire.
Clothing – At $1400 this was much higher than we thought but around $500 was clothing purchased for Katy’s wedding. Some of it was normal clothing expenses, but mostly it was T-Shirts from the places we went. I have this idea that I am going to make a quilt out of all these shirts some day, plus I like the two shirts which are clothing and serve as a memento. I think the original amount of $600 a year was fair, and if you take out the big dollar purchases for special events we are probably close to that.
Laundry – Thrilled that we only spent $70 in laundry this year. We love our Splendide and use it for almost everything only going to laundromats when we are boondocking for long stretches or the laundry has piled up to the point that we need to do several loads at once. Work Kamping often provides free laundry facilities or full hookups so the laundry expense has been a nonissue for us. I am going to adjust this down to $10 a month next year.
Propane – We spent a ton of money in Glacier on propane and with the rain and cold in Quartzsite are spending more again here. Generally though we use very little and with the free propane in the Redwoods and the propane credit from Susanville we actually only spent $16.81 total!! I am going to leave this at $10 a month though for next year.
Membership Fees – This included our $100 for our annual Amazon Prime membership, our American Express card, the current cost of my blog website, our Escapees membership, and Passport America. $551 seems like quite a bit but we feel the extra AmEx points, free Amazon shipping, and campground discounts more than made up for most of it it. I am going to adjust the budget to reflect what we are actually spending.
Income Tax Prep Fee – Since we had a house sale last year and we are filing a Schedule C this year for the first time, I will be using a professional for the time being. This year I plan on using Travel Tax who specializes in people who work in multiple states and will increase the budget to $300.
RV Loan Payments – We are now totally debt free except for our $400 monthly RV loan payment. Obviously it would have been better to have no loan and we did talk about staying in New Hampshire and living in an apartment for an extra year to pay off the camper, but if I had to do it again I would do exactly the same. Getting a one year jump start on this life is so worth the payment and I don’t think the $400 will make or break us. If it was $1000 yes, I would say to stay and pay down that debt first, but I can live with one “house payment” plus the interest is tax deductible since this is our primary residence.
Miscellaneous – This included some of the one-time costs for the year but certainly not all. I didn’t take it out though because it also has some uncategorizeable expenses and it really wasn’t that much money in the grand scheme of things.
Mail Service – Mail service includes any money we spent on shipping or postage, and was much more than we anticipated at $800 for the year. Much of that were one-time priority mailings associated with house closings, becoming new Florida residents, and me quitting my job and we do not think those will occur again. You also need to be careful about mail services, because they do really charge high fees for priority mail, so some of this was a learning curve as we understood how the process works. Next year we did increase the budget to reflect more priority shipping because when you are moving frequently you need to pay extra for 2 day shipping sometimes. Oh, and we do everything online that we can, but don’t kid yourself. There is still lots of stuff out there that is only sent through regular mail.
Cigarettes – This was by far the most exciting story as we went from $600 a month in a sticks and bricks to $120 a month on the road. We simply could not have afforded this lifestyle with that big of an expense and rolling our own makes it work. I get a lot of questions about this category because it varies so much from month to month, but basically, when we are someplace that the prices are good, we pre-buy as much tobacco and tubes as we can and store it. Tobacco costs vary significantly from state to state. I promise if I quit smoking I’ll let you know, but in the interim a zero for the month in this column simply means we are using what we’ve stocked up.
Personal Care – This is haircuts, nails, waxing etc. I was routinely spending $100 a month alone in this category before and starting out at $50 a month for both of us was too aggressive. Then I adjusted to $100, but it turns out we spent $63 a month on average. I am going to put this at $75 and see what happens, but this is not an insignificant change for most women. To acheive this kind of budgets I do my own nails, only got 2 pedicures last year, and pretty much stopped getting my hair dyed. It hasn’t been a huge sacrifice or anything but it did require some changes to how I thought about things.
Healthcare – I did NOT include healthcare in my budget numbers last year, but it ended up I was spending about $368 a month as subsidized by my company. That subsidy is gone in March and COBRA jumps to $1K a month. Yes, that is not a typo. That is definitely not going to work so I put in a $150 placeholder in the budget below. We don’t really know how much money we will be making next year so it is really tough to tell what our costs will be. We decided we would underestimate our income and pay the lesser amount because we believe there is no penalty. As soon as we settle into the Affordable Healthcare coverage we will let you know. We also have $12K in HSA funds available to us so thankfully we will have no additional out of pocket expenses unless something catastrophic happens.
So we are still looking at $46K next year and that is assuming very low health care costs. That number is not so scary though if you look at it a couple of ways. Lee and I are both able bodied, so we would just need to bring in $23K each to make that worth. Plus, this is in no way a bare bones budget. There are several areas where we could trim the fat, the question becomes do we want to? There is a tipping point between working so much you don’t enjoy your life and not having enough money to have a quality life. Where that point is every individual person needs to decide, and it could change over time. What I thought was an absolute requirement a year ago, is different than how I feel now and I expect next year I might feel differently again. I do know that I will keep talking about it in the blog next year. I will keep reporting our expenses, talking honestly about what the life looks like for us on a budget, and let you know what is working and what is not. That is what Howard from RV-Dreams did for me and ultimately his honesty gave me the courage to try this lifestyle. The least I can do is pay it forward a little bit, but please please remember: your mileage will vary. This is our truth, and yours will ultimately be what you make of it.
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