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Last Updated on November 20, 2024 by Paul Clayton
Table of Contents
9 Financial 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 own rules, not being tied down, and the chance of enjoying the splendor and beauty of nature is irresistible.
Key Takeaways
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- Save Before Transitioning: Prioritize building a financial cushion before switching to a full-time RV lifestyle. Avoid financing the RV lifestyle with debt to ensure less stress and more enjoyable travels.
- Eliminate Debts: To avoid financial burdens, start RV living debt-free. Focus on clearing high-interest debts like credit cards and strategically plan for long-term loans.
- Establish a State Residency: Choosing a domicile state for tax benefits and compliance is essential. States like Texas, Florida, and South Dakota are popular for RVers due to their tax policies.
- Retain Your Home Asset: Avoid selling your house prematurely. Test the RV lifestyle first, as transitioning can be challenging. Consider renting out your property for additional income.
- Ensure Income Streams: Develop remote income-generating skills such as freelancing or digital tasks to sustain your lifestyle on the road.
- Create a Realistic Budget: RV living is not inherently cheap. Budget for maintenance, parking fees, insurance, and other essentials. Track expenses to stay financially sound.
- Minimize Costs: To reduce living expenses, utilize boondocking and travel to areas with favorable climates. Cut unnecessary costs while focusing on essentials.
- Plan for Retirement: Secure long-term financial stability by maintaining retirement accounts and cultivating sustainable spending habits.
- Secure Health Insurance: Explore health insurance options suited to RVers, such as Medicare or plans available via the Affordable Care Act.
However, if you plan to switch 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.
Read on!
1) Save
Saving beforehand is paramount, and I can’t emphasize enough the importance of saving before switching to a nomadic lifestyle.
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. In my opinion, that is 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
One of the big secrets of living a full-time RV 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 are things that you do check-to-check, and there are 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 clearing your credit card loans monthly, 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 establishing state residency is still important.
It’s important because you’ll need to pay taxes, and every state has different rules. For example, in California, you’re supposed to pay taxes on money earned while in the state.
The good thing about RV living is that you can choose a different state from where you reside.
A significant 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.
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 where RVers set up domiciles 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 a PO Box is set up to get residency and for low taxes.
SD also has no vehicle inspection or inspection, which is excellent if your RV is in poor condition. However, while the state is great for legal residence, the property and sales taxes are high. It’s perfectly fine for digital nomads.
Escapees have good guidance on what is required and will provide the best information on state residency.
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 wrong, but it doesn’t make financial sense. Real estate can be an appreciating asset, depending on location and economy, but it’s a depreciating asset with an RV.
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.
I’d say don’t sell your house to buy a camper. A place to call home is a great asset that 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 home 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 that living in an RV sounds great on paper, but it’s a different animal once you try it.
So, test the water first before committing to selling your house.
5) Have an Income Stream
Unless you plan to live off your savings, you must find a way to earn money while living full-time in an RV. The answer to sustaining your RV lifestyle 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 for full-time RV living include copywriting, software development, account management, and customer service.
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, so you need to create a budget.
I can’t be specific about the RV living budget, but there are plenty of maintenance costs and fees associated with RV living, including repairs, utilities, insurance, dumping fees, parking, etc.
It is important to track all your expenses in a detailed spreadsheet and develop a plan to minimize them.
While RVing can generally be done on a budget, I know that it won’t be that different if you can support your lifestyle on your current income. What you spend now is likely what you’ll spend then. RV living costs are 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, 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 have 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 is possible. Several costs are involved, but you can always cut them to the bare minimum and 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 spending a considerable chunk of your budget winterizing your rig and using a ton of propane, you could shift to locations with more favorable climates.
8) Think About Retirement
Many RVers aspiring to be full-time RVers make the mistake of planning for short-term financial goals without considering the future.
Consider a retirement plan if you plan to live in an RV for the foreseeable future. Creating a savings account is a good start, and you could also create a supplementary retirement account.
Also, 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, it would help if you took 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 that there are several options available. For example, you could consider Medicare if you are older than 65.
You get a couple of healthcare exchanges for RVers courtesy of the Affordable Care Act.
This video has been included to clarify the topic. Credit goes to Today is Someday
Wrap Up
These are the most essential financial preparations before living in a full-time RV.
Consider each, and you’ll have an enjoyable and self-sustaining RVing experience.
