Last updated on October 13th, 2023
9 Financial Preparedness Strategies for Full Time RVers
Many people often romanticize the idea of living in an RV full-time. And it’s true, the allure of making your rules, not being tied down, and the chance of enjoying the splendor and beauty of nature is irresistible.
However, if you plan to switch your life to a nomadic lifestyle, you must make several financial preparations. Proper financial planning is key, especially if you don’t want to get stuck in the wilderness with no house and cash.
In the guide below, I’ll share some important financial tips to make before settling for a full-time RV lifestyle.
Saving beforehand is paramount, and I can’t emphasize the importance of saving before switching to a nomadic lifestyle enough.
Way too many people often make the mistake of taking off on a whim. They take on debts to buy a new rig and finance their RV lifestyle. That is, in my opinion, the wrong way to hit the road.
Of course, while it’s still possible to do that, saving first is wise. Have some reserve cash on you before you plan to make the switch, and I can assure you this will make traveling more enjoyable and less stressful.
2) Pay your Debts
I think that one of the big secrets of full-time RV living is setting out debt free. The problem with RV living on debt is you’re likely to get burdened financially. If you start your RV living free of debt, you can fine-tune the rest of your budget as you go.
When thinking about your debts, there’re things that you do check-to-check, and there’re debts you settle strategically over the long haul.
Regarding check-to-check debts, I suggest you first pay your 401 (k) or IRA. Then clear all your credit card debts, student loan debts, and anything accruing an interest rate.
Try to clear your credit card loans every month, and then work out on the bigger loans.
3) Establish State Residency
Full-time RV living is all about exploring new locations now and then, but it’s still important you establish state residency.
It’s important because you’ll need to pay taxes, and every state has different rules. For example, the way it works in California is you’re supposed to pay taxes on money earned while in the state.
The good thing with RV living is you can choose a different state, other than where you’re currently residing.
A major requirement, however, is to have a mailing address. If you don’t have a house, you could use that of a friend or family member. The other crucial detail is you must have a valid driver’s license and registration for that state.
Now, choosing a state residency for your RV registration is crucial because some states have more financially appealing policies than others.
For example, Texas, Florida, and South Dakota are the most popular states for RVers to set up domicile because they don’t have residency or state income tax.
If you’re unsure what state to register your RV residency in, I suggest South Dakota. The state is supposed to be just a 1-night stay, and PO Box set up to get residency and for low taxes.
SD also has no vehicle inspection or inspection, and this is great if your RV isn’t in a so good condition. However, while the state is great for legal residence, the property and sales taxes are pretty high. It’s perfectly fine for diginomads.
Escapees has good guidance on what is required and will provide the best information on the state residency subject.
4) Don’t Sell your House, Yet
Many RVers planning to switch to full-time RV living usually make the mistake of selling their house and using the money to fund their lifestyle on the road.
Selling your house isn’t entirely bad, but it doesn’t make financial sense. Real estate can be an appreciating asset, depending on location and economy, but with an RV, it’s a depreciating asset.
So, by selling your house, you’re trading an appreciating asset for something that drops in value very quickly, especially if it’s new.
The other thing is if you move into a camper and don’t have a house, you’re literally and figuratively homeless, at least in some states such as Colorado. You’ll be required to pay campground fees or be forced by authorities to move.
In my opinion, I’d say don’t sell your house to buy a camper. A place to call home is a great asset and will provide you with plenty of freedom and stability in the long run.
However, if you must sell your house, consider renting or living somewhere else away from your house for at least six months, and rent out your house.
You’ll understand that living in an RV full-time is a huge change and a lot of work.
Of course, many people like to romanticize the idea of full-time RV living, but it’s usually a lot of work. Speaking as someone who lived in a 36″ RV for several years, I can tell you living on an RV sounds great on paper, but a different animal once you try it.
So, test the water first before committing and selling your house.
5) Have an Income Stream
Unless you plan to live off your savings, you must have a way to make money when living full-time RV living. The answer to sustaining your RV living is being smart with your time and money.
Find a job that requires you to be in front of a computer and doesn’t require in-person meetings. In short, consider the freelancing and remote tasks that will require you to work online and in the comfort of your RV and the wilderness.
Some remote tasks you could consider for full-time RV living include copywriting, software development, account management, customer service, etc.
If you don’t have any skills, be patient, save and develop a good skill set, whether interpersonal, computer, or handyman skills.
Next, create a work plan and strategically decide where you want career-wise in the coming years.
6) Create a Budget
Creating a budget is among the important financial preparations before full-time RVing.
Many people often assume RV living is “free.” It’s not as “easy” and “cheap” as it might initially seem, which is why you need to create a budget.
I can’t be specific on the RV living budget, but there’re plenty of maintenance costs and fees associated with RV living, including repairs, utilities, insurance, dumping fees, parking, etc.
The important thing to do is to track all your expenses in a detailed spreadsheet and develop a plan to minimize the expenditure.
While RVing can generally be done on a budget, what I know is if you’re able to support your lifestyle on your current income currently, RVing won’t be that different. What you spend now is likely what you’ll spend then. RV living cost is simply trading the expenses you’ve now with others.
And it’s not like you could RV full-time for much less. From experience and after closely tracking my expenses, it turns out that the true cost of RV living is sometimes “whatever you’ve.”
For example, if you’re a fan of boondocking, living on a cheap-ass van, and eating Ramen noodles, you could live off several hundred bucks a month.
On the other hand, if you’ve a family and like RVing in the resort parks and going out to high-end restaurants for dinners, plans for thousands of dollars a month.
7) Be Smart and Cut Down the Costs
As I previously mentioned, RV living on a budget can be done. There’re several costs involved, but you can always cut them to the bare minimum ad spend on the essentials.
For example, you could save on camping fees by boondocking. Staying in the parks is expensive, but you can live for free in the boondocks.
You could also choose to chase the weather and the sun. Rather than spend a huge chunk of your budget winterizing your rig and using a ton of propane, you could shift to locations where the climate is more favorable.
8) Think About Retirement
Many RVers aspiring to be full-time RVers often make the mistake of planning for short-term financial goals and don’t think about the future.
Consider a retirement plan if you’re looking to live in an RV for the foreseeable future. Creating a savings account is a good start. You could also create a supplementary retirement account.
Also, ensure you develop sustainable habits that will make your outdoor stay less draining. For example, consider RVing in free parking spots, staying in a single location for longer to avoid repeated deposits, and regularly maintaining your RV to avoid constant mechanical breakdowns.
9) Consider your Health Insurance
Finally, you must take responsibility for your health. A financial concern many RVers usually have when living in their RVs full-time is securing and paying for their health insurance.
The good thing is there’re several options available. For example, you could consider Medicare if you are older than 65.
There’re also a couple of healthcare exchanges you get for RVers, courtesy of the Affordable Care Act.
These are, in my opinion, the most important financial preparations you must take before full-time RV living.
Consider each of them, and you’ll have an enjoyable and self-sustaining RVing experience.