Finances

Finances

Did we make our $60K budget? No, but we’re declaring victory

  • Tom heading into the nearly two-mile tunnel on the Hiawatha Rail-Trail, one of our entertainment splurges.

By Tom Nichols
(Read Part 1 about our finances here, and Part 2 here.)

When I began running the numbers for our projected 60K retirement budget two years ago, I couldn’t help thinking that the assumptions in it were delusional. Judy, meanwhile, was characteristically confident we could travel full time in The Epic Van and live on $5,000 a month.

She’s way ahead of me in visualizing blue skies in any new venture. I enjoy riding along, but worry more about a catastrophic storm ahead.

It would be easy to underestimate our annual retirement spending by many thousands of dollars. Imagining living on less than half of our 150K pre-retirement income is easy, but did we have the commitment to do it? Would I be slinking back to the workplace in my mid-60s, scrambling to salvage a nest egg squandered?

It turns out my worries were overblown, and Judy seems to be right about early retirement and going nomad, as she was about other big ventures like getting married (1982), publishing a newspaper (1989), starting a family (1994) and taking a family sabbatical (2000).

Touring America for nine-plus months on a 60K annual budget is doable. We spent $5,119 a month last year, coming within about 2 percent of our target of $5,000. Lower than estimated fuel costs, vehicle maintenance and taxes, along with more than two months of cheaper, stationary living with Judy’s mom in Arizona, helped us nearly reach our 60K target.

On the positive side of our assumptions, we expected to spend about $500 a month on diesel fuel and pay about $3.50 a gallon. We spent $416 a month, paid closer to $3 a gallon and traveled about 15,000 miles.

On the negative side, we aimed for $50 a day in daily living costs that include groceries, restaurants, bars, camp fees and laundry. In nine-plus months of travel we spent $57 a day, about 14 percent over budget.

Our 3,200 mile detour in July from Glacier National Park to a family reunion in Illinois, and back to the Rockies, was our biggest budget breaker of the year. We spent $72 a day in July on groceries, dining and entertainment when our son Nate flew to Chicago to join us.

We had lots of fun, but our monthly budget deficit was rising with the summer heat. On Aug. 1, we knew a mid-course budget correction was necessary. It was time to redouble our efforts to meet our $50 a day spending target.

After trial and error during our first seven months on the road, we resolved to follow the “New American Nomad principles” for limiting grocery, dining, entertainment and camp spending:

  • Cooking 18 or 19 of our 21 weekly meals in The Epic Van, with whole grains, beans, fruits and vegetables. Half of the meals are vegetarian. The other half use inexpensive animal protein, mostly low-fat ground turkey, chicken and a little fish. We’ve cut spending on prepared sweets and snacks to come close to our $850 monthly grocery budget.
  • Modifying our dining and entertainment habits to get closer to our $400 a month target. We plan a 50-50 split. Eating out at moderately priced restaurants, food trucks, farmers markets and fairs once or twice a week, saving our dining dollars on special occasions with friends and family. We gave up on twice-a-week Mexican lunches. Last year, we spent about $370 a month on restaurants, and we’re trying to get closer to $200.
  • Drinking beer at local brew pubs or bars with a view or music twice a week and limiting appetizers to once a week. And seeking out inexpensive museums, self-guided historical walks, used books, Redbox kiosks, free news apps, public radio, inexpensive community film showings and small-town festivals. That preserves entertainment dollars to spend on an occasional splurge, like the Buffalo Center of the West, in Cody, Wyoming, the Hiawatha rail trail on the Idaho-Montana border or a boat ride in Glacier National Park. Last year, we spent about $180 on entertainment. We don’t buy baubles and books from museum gift stores and historic downtown shops, like we did in out pre-retirement life, in order to stay close to our $200 a month earmarked for entertainment.
  • Finding federal, state, or county camp sites of $15 or less a night. There are hundreds of inexpensive camps across the West, many with views we used to spend several hundred dollars a night for at inns, hotels and bed and breakfasts. We also spend two or three nights a week doing free overnight stays in small towns (county courthouse squares and sleepy main streets are a favorite), at Walmart parking lots, and with friends and family. RV campgrounds, which often charge $35 to $75 a night, wreck our $200 a month camping budget, and we prefer the relaxed atmosphere of parks. We used commercial campgrounds during emergencies, in 100-plus degree July heat near Glacier National Park and a couple of sub-freezing April nights on the Nebraska plains, when we needed electricity to stay cool or warm. We budgeted $200 a month and spent $210.

On a chilly final day of September, we toasted success in meeting our $50 a day budget for the month, as we gazed at grassy dunes and slate surf n’ sky from a bar overlooking the Trail of Discovery in Long Beach, Washington. We had reduced our daily spending from $72 in July, to $48 a day, while thoroughly enjoying the Pacific Northwest. We were spending less than we did earlier in the year, but enjoying our wandering ways even more.

We begin our second year in the Epic Van with more confidence we can follow the “four percent rule” for withdrawing retirement assets and yet enjoy a rich nomadic life on about 60K a year. It may take a few extra thousand dollars occasionally to pay for unexpected events in early retirement, but we don’t obsess over four percent. We can accept a five percent drawdown if necessary. We call it an emergency fund.

If we spend beyond the five percent withdrawal threshold, I guess Judy will have to go back to work. (“Dream on,” she said.)

Expense category Budgeted amount Average monthly spending
Groceries 850 914
Dining-Entertainment 400 550
Camp Fees 200 210
Laundry 50 35
Subtotal 1500 1709
* * *
The Epic Van loan payment 615 612
Diesel-propane 500 416
Van maintenance 250 33
Van insurance 120 121
Van license 115 194
Subtotal 1600 1376
* * *
Health insurance 720 721
Prescriptions and copays 0 100
Household storage 265 265
Phone-data (for 3) 285 310
Subtotal 1270 1396
* * *
Taxes 200 173
Clothing 100 113
Haircuts-Personal care 50 43
Mailing 50 35
Charity 100 110
Health club* 50 104
Blogging costs 50 37
Misc 30 23
Subtotal 630 638
* * *
Total 5000 5119

From 150k to 60k: How we realized our full-time travel dreams

Selling our house and cars and trimming our daily spending allowed us to retire seven years early and tour America full time in our fancy van.

  • It costs $1,600 a month to finance, fuel, maintain, insure and license our adventures in The Epic Van (an RS Adventurous by Roadtrek), which gets 18 miles per gallon of diesel on the road.

By Tom Nichols
(Part 2 in a series. Read part 1 here.)

I once lived the $150,000-a-year life in Scottsdale, Arizona.

Loved it for the food, family vacations and health club. Never cared about fancy cars, nightlife or fashion. Always viewed a house as a financial asset, nothing more or less.

These are the weaknesses and strengths I brought to the game of changing my ways and living full time in a fancy van on $60,000 a year, or less than half of what we used to spend.

Read More

Financing the full-time lifestyle

  • The Epic Van at a free campsite in the Buenos Aires National Wildlife Refuge. Seeing the United States makes it all worth it.

By Tom Nichols

You’re probably wondering how a couple of 50-somethings are paying for their touring lifestyle. Sure looks like they’re having a good time in early retirement, but they’re probably headed for financial disaster in a few years!

After all, any financial planner will tell you that your retirement spending must be based on a 30-35-year horizon as life expectancies are hitting 85 and beyond. We agree. You’ll also be told to replace at least 70 percent of your pre-retirement income to enjoy a respectable Boomer life. On that one we respectfully disagree.