Michelle’s quick note: Today, I have a great guest post from Brooke and Buddy Baum. As you all know, I absolutely loved RVing. However, it’s not for everyone. So, when I had the opportunity to hear this RVing story, I jumped at the chance to share it with you all. Enjoy!
We’re Brooke and Buddy Baum – digital nomads, bloggers, travelers and nature lovers. We recently ended a year-long stint of RV life that taught us so much about life, marriage, travel, freelance work … and the importance of making smarter financial decisions. If you are looking into RVing, we hope our story helps you make a better plan than we had!
We spent $43,486 to RV for just one year. Ouch.
We threw up in our mouths a little just typing that out. That’s no small number, especially when you take into account that RVing was a budget move for us. And this total doesn’t even include normal life expenses. It is only RV-related costs, including the down payment, RV payments, insurance, campgrounds, fuel, and the loss we took to sell it.
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- Common RV Questions – Yes, I Even Talk About What We Do With #2
For many RVers – especially those in the millennial age range – living in a motorhome or travel trailer is a way to save money while having more opportunities to travel. And while many succeed at this, it is surprisingly easy to end up spending the same amount you would have in your sticks-and-bricks home without careful planning.
In hopes to help others avoid similar mistakes, we’re going to share everything we did wrong financially. We’ll even include real numbers from the initial budget we created before beginning RV life, and what we actually ended up spending. RVing can be a wonderful way to live and/or travel if you have realistic expectations for it – which definitely includes an accurate idea of what you’ll spend.
(Please note: we are in no way shape or form financial advisors. You will need to make a plan that fits your needs and budget if you decide to live in an RV. This is just what we did and what we learned. Anything we suggest is only our opinion. Please do what works best for you regardless.)
Our Plan to RV
Before starting our search to find the perfect RV for us, we were both working full-time desk jobs and were basically miserable with the “success” we had achieved. We wanted out, but weren’t sure what our options were, then entered RVing. This was a topic that came up many times since our two-week campervan stay in Iceland in 2015. We knew it would be a huge change for us, but it seemed like the perfect drastic leap we needed to leave our jobs, as well as avoid the high cost of living in the Denver area.
We spent nearly six months researching and planning before finally finding the perfect rig. When going into RVing we gave ourselves a minimum of two years, regardless of if we liked it or not. We had a full budget in place, and money in the bank to last us a year while we figured out how to work remotely, based on that budget.
While we made many mistakes financially when it came to RVing (which we’ll share later), by far the biggest was buying a new RV. If you have plenty of money, go new – they are super fancy and clean and nice. But if you are trying to make the most budget-savvy decision possible or aren’t sure of your commitment level, learn from us and rule out new as an option.
New vs. Used
When you are looking for an RV, one of the first decisions is new or used. This is something we read many articles on and chatted with many RVers about. We ruled out the really well-used RVs immediately. Neither of us are mechanically inclined, and we didn’t want to deal with an older RV that may break on us often – especially being brand new to RVing, as well as trying to build new income streams. We had enough on our plate.
As we compared RVs that were brand new vs. a few years old, we struggled with the small difference in monthly payments for a motorhome that didn’t include a warranty. So, we decided on new, mainly because we wanted something reliable and a good warranty. The monthly payments would be much more manageable than Denver rent, so we felt it made a lot of sense for us.
We also decided on a motorhome because we didn’t have a vehicle to tow a travel trailer or fifth wheel. Adding a truck payment onto a TT payment wasn’t in our budget.
Since we were also quitting our well-paying jobs shortly after moving into the RV, we weren’t sure if we would be able to ever get financing again. So, we just went for the best one we could find in our monthly payment price range! But after RVing for a year, we have realized this was one of the most costly mistakes we made.
We purchased a brand-new 2017 Winnebago View 24V. We wanted this for Winnebago’s reputation in the industry, their drop test, customer service and for the Mercedes Sprinter Diesel Chassis. Our rig had almost everything: diesel generator, solar, full body paint, navigation etc. It was amazing and never failed us once in the year we had it. It was just a bad financial decision for us.
We paid $109,761 before taxes, and $117,103.63 after taxes. This was no little investment. This is a huge decision. Since we financed the RV, we were required to put 10% down, so we paid $12,000 in cash, which put a good dent in our savings. This brought our financed cost down to $105,103.63, which set our payment at $688.59 per month.
With our interest rate (4.890%) over the life of the 20-year loan on the RV, we would have paid $60,157.97 in just finance charges. This is extremely high for an item that has 0% chance of appreciating in value.
So, the day we picked up our RV we were down $12,000, not to mention the instant deprecation once we drove off the lot. And we knew all of that. We weighed the options and felt that it was worth it. Had RVing worked out better for us, maybe we would have been okay with that. But looking back now, it was a really poor decision.
Top purchasing mistakes
1. Getting too excited (i.e. impatient) and making rash decisions.
We saw RVing as our ticket out. It represented absolute freedom. So, we just wanted to make it happen as soon as possible. We looked around for months, but got frustrated and just decided to pull the trigger so we could hit the road.
This led to us not working very hard to negotiate the price. After having so many bad experiences at dealerships, and having a great one at Kerrville RV, we decided the price was fair enough and didn’t haggle much at all. We were purely looking at the monthly payment and even shaving off a few thousand didn’t make a huge difference in the payments. We were just exhausted and ready to be done.
Looking back, we were kind of in this crazed, determined, eye-on-the-prize phase where we were desperate to make this lifestyle happen for us. If this is you, take a step back and breathe before making any big financial decisions. You’ll make much better choices.
2. Not knowing all our options for buying used.
Our main reason for ruling out a used motorhome was because we were afraid of being stuck with its issues. While we knew brand new RVs often had problems during the “shake-down” process, we felt good about a warranty that would cover anything.
However, now that we know RV inspections are a thing, we probably would have felt much better about buying used. These are similar to house inspections, but for an RV. (This video by our friends Kenny & Sabrina explains their great experience using an inspector. Too bad we saw this too late!)
We could have found a 1-to-2-year-old used unit for probably $20-30k less than we paid. This would have minimized our down payment as well as our monthly payments and insurance. There would also be less of a loss when we sold the RV, as we wouldn’t have taken the deprecation hit once we drove it off the lot.
Had we considered used, we would have saved a ton of money up front. Although we would not have gotten the warranty included, there are aftermarket warranties available.
3. Never testing out RVing.
Aside from Buddy sleeping in his Grandpa’s trailer in the driveway as a kid, neither of us had any RVing experience. We just decided this was what our best option was and went for it. We didn’t even test drive the dang thing. It HAD to work (as mentioned in #1 – we were a bit crazy at this point).
Although our View was very comfortable, we realized early on that it was hard for us to be productive without our own separate, dedicated work spaces. Sitting in bed together on laptops was uncomfortable and distracting – especially when one person likes to have background noise and the other wants complete silence to concentrate.
We knew rentals were out there, but didn’t see the point in spending a grand to rent out an RV for a week that wasn’t even the same model we were interested in. But now we know about peer-to-peer RV rentals where we could have rented the exact one for way less than traditional RV rental companies. Even $1,000 would have been worth it to make better decisions.
Estimated RVing Budget vs. Actual Spend
We spent many hours over many weeks figuring out a budget. We researched blogs, chatted with people, and looked at what our travel might look like. Unfortunately, no matter how much we planned and read, we underbudgeted almost everything in regards to RVing. We only overestimated two items in our budget: health insurance and RV payment.
Our monthly budget, based on all of our research, was $1,837. This would be a huge savings for us and we thought it was reasonable. But our average spend per month in one year of RVing was $2,449! Oops.
Here’s the breakdown:
Estimated: $712 vs. Actual: $689 ($23 under budget)
As you can’t get preapproved on an RV loan like you would a house, we weren’t sure what our interest rate would look like, so we aimed a bit high.
Estimated: $100 vs. Actual: $172 ($72 over budget)
This is another one where we couldn’t get a decent quote until we had a VIN number and were purchasing our RV. Based on some research and digging, we budgeted $100 per month for insurance, which seemed logical, as we wouldn’t be towing. However, upon looking further, most places don’t insure full-time RVers, or if they did the price was much higher. We ended up getting a full-timer policy through Progressive which covered everything including our personal effects 100%. The cost of this policy was $72 over budget, but it really wasn’t bad for the coverage we had.
Oil Changes and Other RV Items
Estimated: $50 vs. Actual: $81 ($31 over budget)
We knew we would have some maintenance, so we tried to calculate that in as best we could. Oil changes on the Sprinter are every 20,000 miles. So, we figured one oil change at roughly $400, plus $200 of additional things per year. We pretty much had the oil change price right. However, we didn’t calculate the other RV items well enough. This is anything from toilet paper to RV washes, and cleaning supplies.
Diesel, Propane & DEF
Estimated: $200 vs. Actual: $459 ($259 over budget)
We severely underestimated fuel. There are many things that went wrong with this estimation. First, based on our travel plans, we knew we would travel a bit, so we planned for 15,000 miles a year. After looking at fuel economy on the Mercedes Sprinter, we assumed 17 MPG was our average. This meant we needed about 882 gallons of diesel, which we priced at $2.60/gallon. This put us at our estimated diesel cost of $192 per month. We then added in another $8 per month for DEF and propane.
Our mistakes here came from undervaluing the cost of diesel, which ended up averaging out at $3.09/gallon. Diesel in Canada, even after the conversion rate, ended up costing a bit more than our average. Spending three months in Canada really added up.
We also ended up driving 25,000 miles in our first year, which was 10,000 more than we had planned. This is mainly due to not knowing where the heck we wanted to go for 75% of the year and driving around aimlessly.
To top it off, while 17 MPG is a good estimate, if we were in a windy area, among other factors, we could easily see 11-13 MPG. Prior to selling our RV, the average MPG we had over our 25,000 miles was 14.8, which isn’t bad, but still is not the 17 we planned.
Our propane and DEF costs only came to $21.62 a month, which was only a little more than we budgeted.
Estimated: $150 vs. Actual: $378 ($228 over budget)
This is one we blew big time! Our plan was to boondock as often as possible to save money. After all, we did have solar and a diesel generator. We feel like we still did plenty of boondocking, however, our measly $150 budget for camping each month was extremely low.
One of the issues is that we moved around a lot, so we hardly ever stayed anywhere for more than a few days, which meant those weekly or monthly rates we based our budget on didn’t apply to us for most of the year.
We also had high hopes to never stay at a campground, but finding free camping each night got exhausting fast. For the last couple months of the year, we were staying almost exclusively at campgrounds – for at least a week, or a month in some cases.
It is also worth noting that we spent most of our time on the east coast, since our summer goal was to explore Atlantic Canada and most of our family is spread out from the Carolinas to Florida. Boondocking in this area of the country is possible, but WAY more of a pain.
While our monthly average of $378 might seem low to some, when you look at the breakdown of where we stayed it isn’t an ideal number. We ended up not paying for a total of 193 nights, which is 52.88% of the year. This means over half the year we didn’t pay to camp.
- 49 (13.42%) nights boondocking (Bureau of Land Management, National Forests, etc.)
- 30 (8.22%) nights at Walmart
- 78 (21.37%) nights with free campsites (for volunteer trade, hosted blog-related trips, etc.)
- 36 (9.86%) nights at Harvest Hosts*
*Camping was free with our $49 per year Harvest Hosts membership, but we did purchase goods as part of the agreement. For those stays, we managed to keep our average spend down to $12 per night, which isn’t bad by any means, since we generally ended up getting some wine.
Normal Life Expenses
Estimated: $150 vs. Actual: $14 ($136 under budget)
Insurance was another one we had no idea about, as we were moving from our typical corporate insurance to something we set up ourselves. We estimated our monthly Health Insurance would run $150, but due to our income guestimation for 2017, we only had to pay $14/month. This was $136 under budget, but for very minimal coverage. Not working for a few months actually paid off in this area!
Cell Phones and Internet
Estimated: $175 vs. Actual: $248 ($73 over budget)
We already had Verizon as our cell carrier, so we knew we would stick with that, as it generally has good signal most places. We wanted a backup and ended up being able to pickup the AT&T Rural Plan with 250GB of data, which was amazing. Our original plan was to get rid of one of the cell phones off the Verizon plan, as we would always be together there would be no need for a second phone. However, due to some contracts and taking on other work, we ended up keeping both phones. Cell phones and internet are hard to budget for, due to constant changes in the mobile market place. However, if you need to be online, be sure to have multiple carriers.
Estimated: $250 vs. Actual: $283 ($33 over budget)
Going into RVing we knew that our food storage might be an issue, so we would need to grocery shop more often than we would with stationary living. We looked at our prior months spending and decided on a budget for $250 for groceries. For some this might seem pretty low, but it is easily doable when planning meals in advance. Our total groceries averaged out to $283.31, which is only $33.31 over budget. It is worth noting that this figure also includes, snacks, vitamin supplements, and alcohol.
Estimated: $50 vs. Actual: $125 ($75 over budget)
Eating out is something we wanted to really only do on special occasions, however, we did find ourselves eating out much more than we had planned. We budgeted only $50 to eat out each month, which is one, maybe two meals out.
The thing we didn’t realize about RVing is that we would often end up near friends or family, which generally meant we would go out. We also would find ourselves near some amazing restaurants that we really wanted to try. While we could have probably stuck to our budget, it would have been hard to always tell people we can’t go out to dinner with them. So, we ended up going over budget.
Selling the RV
As mentioned in the beginning of this article, we planned to RV for at least two years to make the cost of purchasing it worth it. But, life happens. Our cat passed away unexpectedly about eight months in. We were already struggling to make RVing work for us and she was one of the main reasons we RVed (so we could travel without leaving her all the time). The only thing that made sense to us at that point was to sell the RV and do something different.
When we finally made the decision to sell the RV, which was a hard one, we knew we would take a loss. We ended up posting the RV on RVTrader, which cost $130. When we finally sold it, it was actually through a Facebook group. The selling price? $93,000! But we still owed slightly over $103,000, which meant we had to pay $10,130 just to sell the RV.
This is where buying used again would have saved us. Had we bought used, we wouldn’t have taken the depreciation hit upon buying the RV. Or if we would have negotiated the purchase price down a bit that might have actually saved us a few thousand as well.
Do we regret RVing?
We learned a ton about ourselves during our year on the road. And we were able to find enough freelance work to pay the bills as a direct result of our interactions with other RVers. Now, we have skills to help us never go back to soul sucking desk jobs again! We also saw a ton of the U.S. and Canada that we had never explored before and fell even more in love with travel.
But, overall for one full year of RVing, we spent a total of $51,526. This includes our $12,000 down payment, $10,130 to sell the RV, and all our spending in between. That total is much higher than we planned for, possibly higher than if we just decided to stay and live in Denver.
This made us sick to put in writing. And we’re going to have bruises on our foreheads for how many times we’ve face-palmed while looking back at all of our mistakes. Not to mention our bruised egos. But, we thought it was important to share this – as hard as it is to admit our mistakes – for anyone in that initial researching phase of RVing. It is also worth noting that we originally planned to RV for at least two years to manage these costs better, but life happened and we changed our minds.
Our best tips are to really have a realistic budget and know what you are getting into financially before beginning RV life. If you are also planning to find remote work while learning to RV, just know it will likely be extremely stressful to manage both. This is a huge lifestyle change that takes some time to adjust to.
Our Next Adventure
While we wish we had made better decisions financially, RVing was a great learning and travel experience that we don’t regret at all. However, we are working hard to keep our current living costs as low as possible.
We’ve actually become full-time house/pet sitters now. By not having housing or other overhead costs, our bills are extremely minimal. This decision already suits our personalities much better than RVing did and we look forward to the savings and extended travel it will allow for.
But, RVing will always have a special place in our hearts. It is a unique way of life that can be the best decision you ever make. But, it isn’t for everyone and it isn’t necessarily a budget decision – that one’s really up to you. If there is a chance you may not love it as much as you think you will, or that your life will change in a way that makes a rolling home impractical – we highly recommend starting with the least expensive option you can find that still suits your needs. At the end of the day, you have to do what is right for you and your family. You’ll likely make mistakes as well, but don’t be too hard on yourself. It is all part of the adventure!
Author bio: After achieving the traditional view of “success” and hating it, Brooke and Buddy Baum decided to start over by quitting their well-paying, 9-to-5 jobs, selling almost everything they owned, and buying an RV. Although their experience as RVers only lasted a year, they learned a lot during that time and are now continuing to travel full-time as house/pet sitters while doing freelance work for various companies – including Brooke’s role as Editor for Winnebago’s blog. They also share their travel adventures and nomadic living tips at TrailingAway.com.
Are you interested in traveling more? What questions do you have for Brooke and Buddy?
The post We Spent $43,486 To RV For One Year – How to Spend Way Too Much Full-Time RVing appeared first on Making Sense Of Cents.