The Economics of Cruising as a Lifestyle

So we have committed to cruising in an RV for the foreseeable future.  But now that we are retired and have no regular income except for Bill’s social security that began last month, some cash from rentals of our properties, and inflow from the sale of Bill’s business (we do not want to touch his IRA and my social security from the Philippines isn't much), we often wonder whether we can sustain the cost of living of this lifestyle, what with the galloping cost of fuel! But, guess what?  We are getting pleasantly surprised that it can actually be a very affordable way to live if you know how!

The major expenses of this lifestyle are 1) fuel, 2) vehicle depreciation and maintenance, 3) campsite fees and other utilities, 4) food and other household expenses, 5) entertainment and other recreational expenses, 6) insurance and property taxes and, due to our age, 7) health maintenance.  Depending on one’s state of wellness, the last can be the largest expense.  Fortunately, for us it isn’t!  Let us now tackle each of these items in the two phases we know of, sightseeing and seeing/relaxing, in comparison to the more common lifestyle, of living in a house.

EXPENSES FOR FUEL

 It averaged about $4.50 per gallon during summer in Canada.  Most expensive was at $5.40 in Eagle Plains, the only campground before the Arctic Circle.  Next was $5.25 in Chicken, Alaska, right before the Top of the World Highway.  In Mexico, with the nationalization of the oil industry, gas was a constant low at $2.50. In the US we have often looked at gasbuddy.com to find out where is the cheaper gas nearby since the variance is wide (currently, the lowest to highest state averages in the US are $2.706/gal for Colorado and $3.597/gal for Hawaii with just a little less in Alaska.  We have also found that there is some savings when you pay cash, especially at outlets like Sam’s, Costco, etc.

During Phase 1 our fuel expenses ran from about $1,500 to over $2,000 per month.  Back then we were using Star, our class C motorhome, to go to different places and stay only 2-4 nights at a place. We used Vino, our scooter, for going around nearby towns or around a campground.  Now in Phase 2, when we stay for 2-3 weeks at a place, even with two vehicles, we are at much less than half that (which comes down to practically the same expense as when we lived in a house)!

VEHICLE DEPRECIATION AND MAINTENANCE 

I have told you that we bought a new tandem, M’A ‘turn, (a Mountain Aire by Newmar and a Saturn SL1 dinghy), for this phase of our lifestyle.  Unlike houses, RVs do not appreciate in value.  They are homes on wheels that are regularly subjected to the rigor of the road.  So buying a brand new one did not make a lot of sense to us.  Like cars, their values take a deep dive in the first few years.  We would rather let other people take that hit so Star was a 1996 model and M’A is a vintage 1997. 

Star had a few problems when we started:  the fuel pump issue in Provo, Utah ($870), exhaust manifold in Calgary, Alberta, Canada ($1195), transmission in Fairbanks, Alaska (speedometer sensing unit in the instrument cluster-$270).  M’A, on the other hand, had practically none (kudos to Lazy Days!).  All in all, our monthly cost of ownership (depreciation + maintenance) for our home on wheels will be around $350 should M’A last us ten years and double if five.  Not bad for a space of about 350 square feet (translating to about $1 per month per square foot, the same cost for rented living space in Kent, Washington, where our condos are).   However, those condos will be there for our children when we die but M’A is not expected to have any salvage value for them by then.

CAMPSITES AND OTHER UTILITIES

 During Phase 1 Bill and I only had a Camp Club USA membership which gave us 50% off for campsite fees on the first day or so.  Being a senior, Bill also had a Golden Passport which gave us a 50% discount at national park campgrounds, too.  So, our campsite fees ranged anywhere from $10-35 a night. One of my routine tasks was to look for the best value campground we could find near the places we wanted to visit.  Frequently, that would include a night’s stay at a Wal-Mart parking lot.  They are smart because although we did not pay for a night’s stay, we bought most of our groceries and household needs there.  With all of these, our campsite fees averaged $350 a month.  

When we decided to take up the RV cruising lifestyle full-time at the end of 2009, we purchased a membership with the Thousand Trails system of parks which included Thousand Trails, NACO, Outdoor World, Mid-Atlantic, and preferential access to all Equity Lifestyle Properties (owners of the system).   The membership allows us 21-day stays at each of the 75 parks nationwide for free and we can go park-to-park.  This gives us, effectively, a campsite expense of a little over $3 a day, or nearly $100 per month for the next thirteen years.  If we used the facilities for only half the time or six months a year (we plan to be out of the country six months a year), then the expense would double at $200 a month

Costs of cell phones are the same except when we are out of the country (Canada and Mexico).  Internet access is more expensive since we want it even when we are on the road (we are using Verizon’s mobile broadband card).  Now that is erased by savings on cable communications which are sometimes free for some campgrounds or just $3 a night if we wanted (and we have not since watching movies has become free and tv broadcast is always available!).  And, since electricity is generally free (except for 50-amp service), even expenses for propane (heating and cooling) is eliminated.   

FOOD AND OTHER HOUSEHOLD EXPENSES

Now you should know that Bill wanted me to add one word to the title of this blog:  Generation Z. Cruising in an RV Frugally.  So our food and household supply bill is small, approximately $400 a month, especially since we do not eat out a lot (I just started cooking six years ago when I retired and looooove it so much still that eating in is always my preferred option). When we do, it is mostly courtesy of gift cards from children and, if not, it is usually a split burger or dog from a fast-food chain or a street vendor in a flea market.

 Variety comes from joining potluck dinners at campgrounds, getting invited (or vice-versa) to the RVs of campground friends for shared dinners, going to cook-offs, or to Costco (on weekends, they have free food samples from 1-5 pm).  We also noticed that our food bill goes up when we visit family and friends because we either cook for the whole family or take them out to special night outs.  Other household expenses include normal household supplies except for RV toilet paper which breaks down more readily.

ENTERTAINMENT AND OTHER RECREATIONAL EXPENSES

I told Bill when we were going to do this that the only thing I would not give up is watching American Idol, Dancing with the Stars, tennis opens, and DVDs on TV.  So we fitted a 32-inch LCD HDTV into our 24-foot Star and I was extremely happy.  By the time M’A came, the only two big additional investments we had to make were to fit a 26-inch LCD HDTV (the 32-inch one was too big) and to add a washer/dryer combo.  I felt extremely blessed.

For DVDs, we started with some two hundred copies from my son-in-law’s collection.  Then we discovered the phenomenon that is Redbox and got our hit movies and Oscar winners for only $1 a night.  Then we discovered flea markets where you could buy previously viewed DVDs for about $1-3 a piece which we then resold to campgrounds for $1-2, sometimes breaking even per DVD in the exchange. Now we have discovered public libraries which have extensive DVD collections and our expenses have been reduced to zero. It was a pleasant surprise that some counties allowed non-residents to have library cards!

Since travels take us to new places all the time anyway, our entertainment and recreational expense has not been big.  The frugal woman that I am, we rarely spend much in admission fees to various attractions because we always opted for the free ones.  We were in Watson Lake at the Yukon when, the greenhorns that we were, we went to the Northern Lights Museum to view a show on the aurora borealis for $10 a person.  That was a big waste of money! 

In Fairbanks, Alaska, viewing muskoxen at the Palmer private farm would have cost us $8 per person but we found them at the Large Animals Research Station, University of Alaska, for free!  At their Pioneer Park, there was a Gazebo Night when a cocktail party was going on and drinks were flowing for $1 donation with free hors d’oeuvres! We just came from a Spring Night Out in Salisbury, North Carolina, where we feasted on refreshments and snack bites at different establishments along Main Street, all for free. 

The biggest expense we have now is the gas we need to go from one place to another: shopping for treasures in thrift stores, consignment shops, auctions, flea markets, craft fairs, etc. (our limited space is a great cap to our spending), visiting parks, gardens, natural wonders, vineyards, museums, and historical sites, or visiting friends and family.  And with our Saturn, that is just about 10 cents per mile.

Bill and I thought about how we would entertain ourselves if we were still living in our condo in Kent.  And the expenses we included in that scenario are for going out at least once a week, probably a movie and/or dinner, family outings, and an out-of-town visit every month or so.  These out-of-towners would mean fuel expenses for the car, motel fees, and other fees associated with the place we are visiting.    

HEALTH MAINTENANCE

One of the more problematic areas of the cruising lifestyle is expenses concerning health maintenance.  For one, we do not have a regular clinic to go to and prescription renewals are harder to obtain.  So we have opted for buying our supplements and other medicines online from Canada (much cheaper).  And we try to postpone other things (this may prove to be not so good a habit to develop) until we get to Seattle or Manila. Clearly, for aging Generation Z members like us, we need to solve this problem better.

Many people have opted for a location they visit annually for their health and dental needs, some in Mexico and many in Florida or Arizona. But this expense is computed at the insurance premiums we pay.

EXPENSES FOR INSURANCE AND TAXES (I have asked Bill to write this section)

Think of your RV as a second home, or, if you are full-timing, it can be your primary home!  That means that you should be able to treat the sales/excise tax on the purchase of the unit, interest on future payments, and any property taxes on your home on wheels just as you would on a traditional home or second home.   Since an RV is not real property, then property tax is nil.  However, insurance varies significantly from a trailer or fifth wheel to a motor home.  The insurance on the trailer/fifth wheel is lower than home insurance.   However, since a motor home is a motorized vehicle, insurance is higher. 

But another thought to consider is the cost of exterior maintenance and landscape maintenance on a traditional home.  The cost and the labor involved is significantly more for this than for an RV,  because you need to repaint, re-roof, take care of plumbing, carpet cleaning, and lawn maintenance – just for starters.  Campgrounds are maintained by their owners, much like condominiums. Here again, the thing to consider is the association fees, which average would be around $300/month (more than the cost of our campsite fees which includes utilities).

SUMMARY

In summary, the comparison goes like this:

                                              Home     Phase 1 RV     Phase 2

Fuel Expenses                         350            2,000             450

Vehicle Expenses                    150               300             400              

Campsite/Utilities                   850               550             350             

Food and HH Supplies           400               400             400

Entertainment Expenses         300                50                50

Health Maintenance               750               750             750

Insurance and Taxes               500                 75             150

TOTAL                                3,300            4,125          2550

So, the Phase 2 RV lifestyle is cheaper than living in a house. What additional expenses you spend for fuel and maintaining the RV you will make up for lower campsite and utilities fees, entertainment or other recreational expenses, and insurance and taxes. Health maintenance is about your state of wellness.   Food and other HH supplies shall always be dependent on how frugal the kitchen and house manager is, wherever one lives.  And I am proud to be a frugal one.  Bill, on the other hand, may not be.