Inspired by the Steeles and determined to convince myself that fulltiming was financially feasible, I sat down to construct a real budget. In truth, I sat down about 10 times because every time I got up I remembered some other item that needed to be included. Then I had to get Jett to weigh in because I don’t have a transparent view into her finances. She has her own credit cards and checking account and I really had no idea of what kind of credit balances she was carrying. That arrangement has worked well for us. Jett is, shall we say, “her own person.” She is not one who relies on her man to do everything for her. She is pretty independent and, more to the point, very responsible. I have never worried about her running up a huge debt.
First, the monthly expenses. These were complicated by two obligations that we have: braces for Jett’s granddaughter and a leased car for my son. Both ran to about $200 a month and both were scheduled to expire / finish at the end of 2013.
As for everyday expenses, I have a good idea of what we currently spend. Many of these expenses would continue as-is or in some similar form (e.g., food, life insurance, cell phones, pet expenses, Jett’s cigarettes, vacations, charitable donations). Others would disappear (e.g., cable TV and other house utilities, magazine subscriptions, expenses for our current vehicles, commuting expenses), to be superseded by new RV-related expenses (e.g., RV and truck insurance, storage rental, campground fees, propane, gas and tolls). After many rounds of discussion and tweaking – and using the Steeles’ categorization scheme – this is what, conservatively, our projected expenses look like:
C (campground fees) – $800
D (truck and coach expenses) – $700
E (entertainment and recreation) – $200
F (food) – $550
H (health insurance) – $1,500 thru 2013, then less
M (miscellaneous) – $1,315 thru 2013, then less
P (pets) – $125
U (utilities) – $205
X (extras) – $300
Health insurance is expensive. No surprise there. Our strategy is to pay for continued current coverage through COBRA through 2013. It will probably go down after that as I will be on Medicare, but there is no great urgency in budgeting now for 2014. We need to survive a year on the road first.
The miscellaneous category also declines in 2014 as it includes the braces and car lease obligations. The assumption is that no new obligations will arise. Kind of a big assumption for a couple of doting grandparents, but necessary for budgeting.
Miscellaneous also includes storage rental, cigarettes, life insurance, clothes, vacation and charity. Some of these are obviously discretionary, but I am not going to be the one to suggest to Jett that she give up her smoking habit. I value my own health too highly.
There are risks in this, of course. First and foremost is health. It would take only one hospitalization to blow this budget out of the water. A second risk is the rig itself: major repairs or an accident could add thousands. A third risk, not even included in the expense budget, is our real estate. Our assumption is that rents will cover the costs, but what if this is not the case? Other risks are less obvious but real nonetheless: Can we keep within our food and beer budget when the kitchen is within reach 24/7? Can we resist the urge of a cabin upgrade if we book a cruise? Can we resist the urge to invite the grandkids for long vacations in California? The budget is, I think, realistic, but is, like life, subject to much uncertainty.
With this budget, our total monthly expenses through 2013 are $5,695. That is much higher than the Steeles’ $3,900 – an amount that appalled them – but this is 10 years later. After 2013 I project a monthly total of $4,765, which is much more to my liking. But that is too far away to give me much comfort now.
The question, then, is whether our resources – assets and earnings – can cover these costs. It is pretty apparent that it will be necessary to work part-time or find some other way to earn some money to make this work. But working is something that Jett and I do very well. It might even be good to have something that gets us out of the house – uh, coach – from time to time. I will look at the income side of the ledger next time.