Van Life- Do your Budget and then do it again!
When we started looking into van life, we truly believed that we would be saving 100% of the cost we spent on housing, utilities & upkeep. But, boy, were we wrong!
In our sticks and bricks home, we paid about $900 a month rent, $100 utilities/parking, and an additional $200 a month for internet and Tv. That totals $1200 a month in expected savings. At the time, we budgeted $800 a month for food and fuel. We expected a rise in the fuel cost, as we were planning on traveling the country. However, we were not prepared for the actual numbers.
Since we rented an apartment, we didn't have upkeep on the home, but we did have to do some significant repairs to the van, and the build was a bit more costly than we initially figured. However, we did luck out that we took a couple of years doing the build before we stepped full time into van life. This time allowed Tom to continue to work and earn a full-time income while our expenses were high.
Out planned monthly budget was:
Vehicle insurance $70
Cell phone (includes phone cost) $170
Life Insurance $150
Our estimated monthly Van life expenses at about $1600.
Our actual Monthly budget is:
Vehicle insurance $70
Cell phone $65
Life Insurance $150
Repairs/ Upgrades $250
Our actual Monthly expenses average closer to $$2535.
Our income in retirement for the 1st year will only be $2000 a month so that you can see the shortfall. With the increase in fuel cost and our eating more often than cooking in the van, we can not afford to retire even with this lifestyle. We have gone full-time in the van for the last 12 months, but due to COVID we stayed local, and Tom continued to work. Our fuel costs are twice what we would use because we have to return from every trip for Tom to be at work.
We plan out travels by tanks of gas. We can travel about 650 KM on a full tank of gas. Assuming highway at an average of 100KM an hour, we can travel 6.5 hours per tank. Pre COVID, it cost $100 to fill the tank but now, thanks to Russia, COVID, and the Carbon Tax, it takes about $180 to fill the tank, then there is fuel for the generator, and in the winter, the heater.
It was about 17 hours to drive from London to Halifax, but it took about a week since we stopped along the way, LOL. So it was three tanks to get there, three tanks back, and we budgeted for two tanks to drive around along the way and see the sights. So the trip took precisely eight tanks of gas but had 3/4 left when we returned.
Using this logic, we have budgeted our travel in retirement based on tanks of gas and fuel costs. with the current fuel prices, we can travel four tanks of gas (2400KM, fuel cost rounded up to $800.) We stop along the way and see the sights, but when we hit our 4th fill up, we know we need to find a place to settle and explore till the next month or next Monthly income deposit. We save a lot monthly if we eat more in the van and not at restaurants or fast food outlets. Our current budget is higher because A. we still have an income, and B. we have been trying to support local restaurants post COVID lockdowns.
Realistically, I believe we can keep our food budget below $600 a month, even with the increase in food costs. That reduces our overall expenses by $400 a month, leaving only $135 to trim. Since we plan to have the van ready for travel and all significant purchases made before Tom retires, we are only looking at repairs. We will have paid off all credit cards before retirement and have access to them in the event of an emergency. If the repair was too costly and ran up the credit cards, Tom can always seek employment in a local town for a short period as his experience is always in demand regardless of the town's size.
In 4 years, when Tom reaches 65 years old, he will qualify for Old Age and Guaranteed income supplements (GIS) which will boost our income and improve our financial situation to better than where we are now (current income/debt to age 65 income/debt). When I hit 65, my guaranteed income ends, but GIS and CPP will kick in. my old age. We don't have much in pension and anything we had taken such a hit in the last few years that consider it $0 for budgeting purposes.
THIS PART IS VERY IMPORTANT!!!
Your situation changes as you age, as the world changes. Who would have predicted COVID or Russia invading Ukraine? Stuff happens, both costs and income go up and down and you need to budget for these changes. Change your budget as needed. In our case, we have a budget for Now when each of us turns 60, 65 & 70 years old. These are the significant points when income changes (Old Age, CPP, pensions, etc.) We have six different budgets, and I adjust weekly to be sure we stay on track.
The life style is great, we couldn't afford retirement if we have to pay rent or a mortgage and we get to travel and see North America (assuming the Borders stay open). However, this lifestyle is not for everyone but follows along with us; we could use the company and support.