Frugal Living By Taking The RV Route
Are you interested in traveling across the US? Have you ever thought about just selling everything you own and spending the rest of your life traveling? I know a few people that have done it. They sold their house and most of their possessions and bought a recreational vehicle, which I will refer to as a RV. They spend their time traveling across the country and stopping along their way to visit friends and family. It is an interesting life, if you can manage it. It is definitely frugal living once you get used to it.
Do not get me wrong, the RVs of today are not like the ones that you remember as a kid. Many of them are upscale and luxurious, but still, it is a life style that takes some getting used to. If you are interested, keep on reading and I will explain more about living or vacationing a little more frugally in a RV.
What Is An RV?
A RV is typically the same thing as a motorhome. You may hear or use those words interchangeably, but there are some distinctions between the two. The term recreational vehicle is used to describe anything use for recreational purposes, such as a trailer, motorhome, or something similar. A motorhome is a vehicle that has equipment, such as a kitchen, beds, and storage, inside so that you can live in it. You are able to drive the entire vehicle, so that it is not towed behind you with a truck. It is essentially a house on wheels. Ok, maybe more like an apartment on wheels that you can take with you wherever you go.
There are benefits and negatives to RV living. In some ways, it is a more frugal living. However, you can buy some really luxurious and expensive RVs, which may make them a little less affordable.
Are There Different RVs?
There are many different types of RVs. I am going to spend a little bit of time explaining the differences to you. This is important to know if you are considering packing up all of your belongings and taking them on the road. You might consider a different type of RV if you are interested in spending a few weeks at a time in it versus the rest of your life.
In general, there are three classes of motorhomes. They do not have fancy names. They are simply known as Class A, B and C. Class A is the biggest RV you can buy. The upfront cost may not lend itself to frugal living, but it sure is luxurious. This motorhome gives you everything you can possibly need in a home on the go. They are anywhere from 26 to 45 feet long and have a good bit of space. And they are fairly heavy, anywhere from 13,000 pounds to 30,000 pounds so they are not great on gas. They will not get many miles to the gallon, but can hold a lot of people.
Class B motorhomes are the smallest type of motorhome you can buy. These homes are intended for no more than two people. They get way better gas mileage than the Class A models. They tend to be much cheaper, too. Class Bs are only 17 feet to 23 feet and weigh only 4,000 pounds to 9,000 pounds. These motorhomes do not have much storage space and will not come fully loaded like the Class A models.
Class C motorhomes are a combination of the Class A and B. It is a mid sized motorhome with plenty of storage space and a fair amount of extras. They tend to be between 20 feet to 30 feet. They are pretty lightweight at between 10,000 pounds to 13,000 pounds and tend to give you much better gas mileage. Since they are a medium size vehicle, they can hold a decent amount of people. In many cases, a Class C has a bunk over top of the cab. It is the only style motorhome that uses that space in that way.
Can I Live In A RV?
You can absolutely live in a RV, if that is the type of frugal living you want. There are certain details you need to embrace if you want to live in a RV. You should consider that RV living is not the best way to live when you have children or pets. And you must be comfortable with living in limited space so you must make sure the motorhome you select has a living space that is big enough for your needs. You also want to make sure your motorhome has everything to meet your needs. Consider obtaining an all weather motorhome to make sure it can withstand various temperatures so you can remain comfortable no matter the weather or location.
Some details you should keep in mind about each of the different models of motorhomes. Class A motorhomes come equipped with perks such as kind size beds, washers and dryers. They can even hold cars under the unit, or you can tow a car behind the motorhome. One downside about a Class A model is you cannot park it everywhere. They are large and many places cannot accommodate their size and hook ups.
Class B models are often referred to as campers and are often basic, especially when compared to a Class A. You can add extras, like bathrooms and extra sleeping compartments, to make it more comfortable. The base camper can be a Mercedes Sprinter, Ram Promaster, or Ford Transit. They often come with four wheel drive and can fit into a parking space. You can park them in most places and are easy to drive. Class C models tend to have slide outs to make them more spacious. They have separate bathroom space, but tend to be too small to tow a vehicle behind it.
Can I Vacation In A RV?
Perhaps living in a RV is not the lifestyle for you, but spending a few weeks at a time may be appealing to you. Maybe you are not ready to give up the comforts of your main home, or do something drastic like sell all your possessions and forward your mail. All of the motorhome classes still apply, even if you are only considering renting one. Instead of home on wheels, you can have a hotel on wheels, as long as you do not mind driving your hotel. No matter if you are planning a short trip for the weekend, or a longer drive across the country, a RV could be the answer for you. You are in complete control of where you go and how long it takes you to get there.
Renting a RV for travel is also a great way to travel and have a frugal living, as you can automatically cut out the cost of a hotel. You have to get used to a smaller space, but that is a small price to pay. Todays RV comes with an onboard generator, a washer and dryer, bathroom facilities, including a shower, air conditioning, a refrigerator, a microwave and a gas cooktop. You can get upgrades in your RV such as an ice maker, advanced home theater systems, and more storage.
There are a large amount of vacation spaces where you can stay in a RV. There are spread out throughout the country. When you are planning your trip, make sure you have RV resorts planned out where you want to stop. Many resorts where you can park a motorhome have a lot of perks. You often have to pay to get into the resort or park and may have to pay a daily rate for space, but the cost is usually reasonable. Many RV resorts have areas for dogs to run and play. They have gyms and outdoor dining, along with fire pits. Often resorts have events with live music and areas for activity. Some resort areas have swimming pools and clubhouses.
What Is The Average Cost Of A Vacation?
If you have traveled anywhere recently, you know that it can be an expensive endeavor. It is possible to maintain a frugal living and still enjoy regular vacations. There are ways to save money while on vacation, but it takes planning and research. If you just get on a plane and go to wherever you are going, you may spend a lot more money than you need to. Speaking of plane tickets, it costs about $1,200 for a family of four to fly. This is only if you are going somewhere close to home because this allows for $300 for a ticker per person.
If you allow $70 per person per day for meals, then it would cost $1,960 for a family of four to eat out for an entire week. Allowing $70 per person per day may mean that you have to carefully choose where you eat. A hotel can cost $180 per day for the entire family which equals $1,260 for an entire week. So far, you have spent $4,420 and you have not done any activities. Those can cost about $350 per person for an entire week, depending on where you go.
If you go somewhere like Disney World, it will most likely cost more than that for an entire week. Renting an RV could cut the cost of your vacation in half, depending on where you go. If we say the activities cost $500 per person for the week, that adds $2,000 to the trip bringing your total up to $6,420.
Can I Save Money With A RV?
I mentioned above that you can travel on a frugal living and cut your costs in half if you rent a RV. Let me highlight what I said by showing you the numbers to prove it.
It can cost you $250 a day to rent a RV, then you should add $50 per day for insurance, which costs you $2,100 for a week. It may cost you $5 to get into the RV resort or park, then $25 per day to rent a space and have hookups. That brings the cost for staying at the resort to $180. So far, your total is $2,280.
Since you are cooking your own food in your RV or on a grill, that brings your food costs down to $40 per person per day, making the total $1,120. Your total has gone up to $3,400. An additional cost that comes with a RV is gas. Motorhomes get fairly low gas mileage, so I am going to have to use some averages to highlight this number. If the motorhome gets 10 miles to the gallon and gas costs $4.00 a gallon and you drive 250 miles, the one way cost is $100. If one way cost is $100 then it will cost $200 to drive both ways.
Your total cost is now $3,600. If you do not leave the resort area, you should not have any additional activity costs, but you should account for souvenirs or other rental costs. If you account for $50 per person per day, the total is $1,400. That might be a little high, but I padded the cost because it is better to over budget than to over budget. Now, your total cost is $5,000. You save yourself $1,420 by renting a RV.
What Is A Recreational Vehicle Loan?
While living in a RV can save you money in the long run, they can be expensive to purchase. You may need to take out a recreational vehicle loan, or maybe even used RV loans. If you want to start on your way to frugal living, you may need to spend a little more money up front to save a lot of money in the end. You may hear of RV loans referred to as travel loans, or motorhome loans, but they are all personal loans. A personal loan is when you borrow money from a lender. The lender can be a bank, credit union, online lender, or even a friend or family. When you borrow the money, you make the promise to repay with a regular monthly payment.
The lender charges you a fee, called interest, for allowing to borrow money from the lender. The interest rate that the lender charges is based on your credit score. Typically, the lower your credit score is means the higher your interest rate may be. This leads to a higher monthly payment for you. I am sure it goes without saying that the more expensive the RV costs means that your loan amount is higher and so is your monthly payment. It is important that you understand how much your monthly payment is going to be so that you know if you can afford to pay the monthly payment amount.
The Benefits To A Recreational Vehicle Loan
Aside from being able to live a frugal living, there are many other benefits to obtaining a RV loan. As long as you can afford the monthly payments, obtaining a RV loan is a way that you can get a RV even if you cannot afford to pay for it all at one time. You may be able to get a loan to buy a RV that is similar to a loan you get to purchase a car. That means that the RV may become collateral. If something happens and you cannot afford to pay your loan, the bank can take your RV. This may help you obtain a loan if you do not have the best credit.
You can use a RV loan to pay for repair and maintenance. RVs require a lot of maintenance, even when you take the best possible care of your RV. It will always need some type of care and maintenance. The costs can be high and you may need some quick money to pay for the repairs. You may need extra money to pay for a park and storage. If you travel often or live in your RV, the park fees add up quickly and become expensive. If you do not use your RV as a home, you need to consider storing it, especially if you do not have space in your driveway or in front of your house. Storage fees also add up quickly, especially if you have a larger sized RV.
Make sure you go to a credible lender for your loan. The last thing you want to do is get scammed! Loanry helps you find reputable lenders and makes the application process a bit easier. Our partner Fiona selected some lenders you definitely want to consider:
How Does My Credit Impact A Loan?
Your credit score impacts your loan and just about everything else in your life. If you are attempting a frugal living, you want to make sure that you maintain a good credit score. If you think that your credit score does not have a huge impact on your life, think again. You credit score impacts your ability to get a loan, a house, insurance and even a job. Credit scores range from 300 to 850 points. A credit score of 700 or more is considered a good credit score. Once you start to fall below 650, you are getting into the fair to bad range.
The average person’s credit score is between 600 to 750. It is hard to get and maintain a good credit score. Unfortunately, it only takes one or two mistakes for your credit score to begin going down. The reason for most credit scores dropping is late or missed payments. Having more knowledge about your credit report and credit score makes it easier for you to get the loan you want.
You are entitled to a free copy of your credit report. You should look at it every year and verify the information contained on it. Your credit report shows a listing of all of your credit activities. It shows your payment history, current and past debts, and indicates how you use your debt. Also, it lists late or missed payments, as well as any on which you have defaulted. It helps lenders decide if they should let you borrow money.
What If I Have Poor Credit?
While having poor credit is not great, it is also not the end of the world. Before you start thinking the worst, is it possible to get RV loans for bad credit. It may be a little more challenging, but it is not impossible. I will tell you that if you have bad credit, you may be forced into frugal living because you might not be able to get loans you can afford. If you already know that you have bad credit, you are armed with some knowledge. Knowledge is always a good thing because the more you know, they better able you are to make educated choices. If you are trying to get RV financing for bad credit, it is helpful to be honest with any potential lenders. Many of them are willing to work with you, but you have to be upfront with them about your situation.
If you know you have bad credit, you should work hard to improve it. It is possible to improve, but it does take consistent effort. Since one of the top reasons your credit score could be low is due to missed or late payments, you should make every effort to make all payments on time moving forward. Once you make six payments on time, you begin to see an increase in your credit score. That may seem like forever, but that is what it takes consistent work. You should make every effort to decrease your debt because that increases your credit score and helps relieve stress for you. You may want to consider getting a part time job or a side jobs to bring in more money to pay down your debt faster. This can also help improve your debt to income ratio, which can also increase your credit score.
Do I Need A Budget?
It does not matter if you are attempting a frugal living, or not, you should always have a budget. I already know you do not like it. I can hear your muttering under your breath all the way over here, but seriously, it is one of the best things you can do for yourself. Honestly, there is not reason why you should not create a budget for yourself. It really is not that difficult to do. There are a ton of websites and apps available to help you. Use one of them and put together a budget for yourself.
The simplest way to do it is list all of your expenses in one column. Do not leave anything out. Now is not the time to try to hide things. You are only hiding it from yourself and it will not do you any good in the long run. So, list out every single expense and if you are not sure how much you spend, look at your bank statements. Try to be as accurate as possible because that is the only way you will benefit. Once you have listed all of your expenses, then in a separate column, you list all income you receive. Add the columns together and then subtract the expenses from the income. Hopefully, you have more income than you do expenses, but if you do not, then you need to start cutting some expenses.
How Do I Save Money?
When you outline all of your expenses and find out you spend more than you earn, it is a tough moment. It should be eye opening for you when you see all the places you spend money. You probably spend more money than you realize. The best way to begin frugal living is to cut spending. But, what if you say that you do not want a frugal living? Maybe you do not, but if you are spending more than you earn, you need to make some changes. If you do not make changes, you will find yourself drowning in debt.
The easiest place to start cutting is cut out the items that you do not use. That gym membership that you have, but you have not stepped foot in the gym for over 6 months is a great place to start. Cancel that membership right now. If there is anything else you pay for that you are not using, cancel it immediately. And if you have subscription services, do you need use and or need them? If yes, do you need them as frequently as you get them? Maybe you can reduce the number of shipments you receive. These are some quick ways to cut spending and work towards a frugal living.
Maybe you really do not want a frugal living. Maybe you just want to buy an RV to travel across the US. No matter what your goal really is, you need to have a clear idea of it. You need to make sure it is your goal and that it is achievable for you. Most of us are willing to work hard for the things we really want.
Julia Peoples is a long-time business manager focused on providing decision making assistance to the public. She works with people at key points of their lives who are making important retirement and financial decisions. She has had many articles published that educate the public on sound financial decision making.
Julia writes for those who are working towards financial freedom or a better understanding of how finances work. She has shared her financial insights with individuals on a one on one basis for years.