Did we make our $60K budget? No, but we’re declaring victory
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|
|The Epic Van loan payment||615||612Diesel-propane||500||416Van maintenance||250||33Van insurance||120||121Van license||115||194Subtotal||1600||1376|
|*||*||*Health insurance||720||721Prescriptions and copays||0||100Household storage||265||265Phone-data (for 3)||285||310Subtotal||1270||1396|
|Taxes||200||173Clothing||100||113Haircuts-Personal care||50||43Mailing||50||35Charity||100||110Health club*||50||104Blogging costs||50||37Misc||30||23Subtotal||630||638|
Love reading the recap of not only your adventures and travel but also how you moved forward with your plan budgets and the needed adjustments to your budget plan and more. Your article is useful, easy to read and understand and inspiring for the baby boomers as we take the “jump” to live it our way!
Thanks so much, MJ. We spent many nights reading about others who were fulltiming, and got a lot of confidence hearing about their choices, successes and failures. We’re happy to share our experience with others trying to plan their path to FREEDOM. J
We promise to read your posts.
Great. We love readers!
Thanks for the update. Have a great 2016!
Thanks, Bill. Our 2016 is getting off to a better start than the Illini basketball program. – Tom
I enjoyed reading your budget. We are newly retired and contemplating continuing to own our home so our budget will be a approximately your amount while maintaining our home. Do you plan to buy a home in the far future ?
We do, although we’re not sure when or where. When we hit 65, we’ll have more flexibility in our budget. We’re also waiting to see where our son, Nate, winds up. He’s graduating from college this year, and not sure what he wants to do or where he wants to live. So we’re enjoying the nomadic life, but someday hope to have a nest with a foundation. The other thing we’ve decided after living in the van is that, wherever we end up, it will be a MUCH smaller footprint with MUCH less maintenance. Thanks, Judy