We’ve been at this RV adventure for a little over two months, so it seems like an appropriate time to begin to answer the question some have asked directly and others have hinted at: how does the money work?
What I think people are really asking are two things: (1) how can you afford to take a year off? and (2) how much are you spending each month? These are pretty involved topics, so in this post we’ll chat about item number one and save item number two for another time.
First-things-first: No, we didn’t win the lottery; we didn’t inherit anything; and we aren’t receiving financial support from long-lost or close family members, except for help in storing some items and giving us a temporary launching and landing point when we go “home” at the end of the year (although we may decide to hit the road for a bit longer in 2016 – all options are on the table). Now, if you’re a long lost relative looking to support us, we are TOTALLY open to this, so drop us a line and we’ll help set up the trust fund. Moving on…
We’ve been married for almost five years, but our fiscal frugality began well before we married. We chose to have a very small wedding and a modest honeymoon. In fact, the total cost of our wedding, including lodging for all family and wedding party members, was about what most people spend on photography and flowers alone (based on national averages). We used the rest of our wedding budget, graciously provided by Jessie’s parents, for graduate school expenses for Jessie’s first year of school. Jessie chose a well-ranked, competitive, and respected, in-state grad program to help mitigate the expenses of graduate school. Could she have chosen a private or out-of-state school? Sure. And she’d still be an M.S., OTR/L making exactly the same money. The therapy world cares about your license, experience, and competence, not where you went to school (in most cases). Point being, we made some short-term choices that paid big long-term dividends for us in the form of significantly lower student loan amounts.
It is important to note that these decisions were not solely based on financial frugality. Our decisions and choices also directly reflect our personal values and desires. For example, we genuinely wanted a small, intimate wedding, and Jessie attended her first-choice graduate program.
Once Jessie finished graduate school and began working, we lived on one income (much more on this in a later “money” post) and prioritized how we used the second income. Priority number one was to pay off all student loan debt*. I had some left over from my two graduate programs, and we did have to borrow some to pay for Jessie’s final year of grad school. All together, we paid off roughly 30k in student loan debt from our various graduate programs in just over a year. It is important to note that we are both fortunate and eternally grateful to have parents who were able to pay for our undergraduate educations.
Priority number two was to save, save, save. We had several “pots” of money we contributed to each month. Generally these were: RV travel savings, retirement, investment/stock, general savings (for our return home), and down payment for our next house. After paying off student loans we clearly focused on travel savings while trying to not neglect any of the other accounts.
Priority number three was to sell the two properties we owned in Burlington, NC. Now you may be thinking, “Oh, so that’s where you made your money?” Wrong, so very wrong. All told, after selling both properties, we spent roughly 15k to unload them. Showing up to a closing with a substantial amount of money (to us) on the selling end of a real estate transaction is a very, very bad feeling. And those losses don’t account for the sweat equity we put into both properties, which was roughly 20k. Point being, we lost money; thanks for nothing, “Great Recession”. This was a painful and expensive process. But, well over a year later, we still believe we made the right call. The properties we owned had very little potential for significant appreciation, and the carrying and maintenance costs (one of the homes is nearly 100 years old plus we were looking at new roofs and HVAC systems in the not too distant future) would have continued to chip away at our savings even after accounting for tax breaks.
Believing in our financial decisions is really point of all of this. We’ve made decisions that have worked for us. They wouldn’t work for everyone, and the financial gurus out there might disagree with some of our decisions. But we’ve made a plan that we’re comfortable with, and it’s working for us.
So, as of February 15, 2015, we had no student loan debt, no mortgage debt, mid-five figures in various savings/investment accounts (not including retirement accounts), we were moving out of our rented townhouse and jettisoning utility bills. We moved into Jessie’s childhood home for about two weeks to finish up our RV prep, and we hit the road on February 26th with sincere hopes that our educated guess at a monthly travel budget would be on target. This is where things get really interesting, so be on the look-out for a future post or two on our monthly budget and some frank conversation about fixed and variable costs while on the road.
It is our sincere hope that we can help those who are considering this or something like this. Feel free to email us or post a comment. We are truly happy to help in any way we can. Thanks for reading! We look forward to your questions, comments, and feedback.
*a lengthy rant on the economic cancer of student loan debt is sure to follow in coming months