The wanderlust bug regularly strikes RVers, but some enthusiasts are more at risk than others. Historically, most of these RVers labored their entire lives until retirement allowed them to pursue their full-timing dreams, but today an increasing number of younger adults like my husband, Jim, and I are hitting the road decades before our working days are over.
Permanent road trip adventures are the stuff that many American dreams are made of, and if you’re considering this fantastic lifestyle for yourself, I hope you’ll consider taking one critical step before leaving the driveway: first, get out of debt. By eliminating debt before you go, you’ll be better equipped to turn your full-timing experience into a sustainable, income-generating lifestyle that can comfortably carry you into your golden years.
Debt is one of life’s biggest obstacles to realizing the kind of freedom that beckons on the open road. Maybe you take a more laid-back approach when it comes to owing money, but consider the simple fact that when you owe money to an entity, you must earn a certain amount of income in order to keep that lender off your back. If your income declines or disappears, then what? Could you sleep at night knowing that you have no income to pay your bills? I certainly could not.
Living on the road as a working-age RVer brings a level of uncertainty to your income that you can learn to cope with, but owing money adds to the worry of living through those leaner times that all self-employed people inevitably encounter.
Becoming and staying debt-free isn’t an easy process but once you do it, your life will be changed for the better. For example, when Jim and I paid off our debts, we were able to pursue lifelong hobbies that we never had time to enjoy because we were too busy trying to earn money and stay afloat. Some of my own hobbies that I finally had time to cultivate, like writing and jewelry-making, have morphed into income streams that help support our full-timing lifestyle.
Even if you have a great way to make money while full-timing, remember that nobody is immune to a sudden and dramatic income loss; it makes sense to protect your financial integrity by eliminating loan payments or other regular monetary obligations. We did it, and you can too. Here’s how.
The Dave Ramsey Way
When we hit the road, we owed over $30,000 on our truck and fifth wheel. We put everything from groceries to rent on our credit cards. It never occurred to us that there could be a better way until about a year into our sabbatical when we met a debt-free, full-timing family on the Florida coast.
The Cunninghams are two adults, three kids, two dogs and a cat who RV around the country while paying cash for distressed houses that they fix up and sell to investors. The Cunninghams live simply, stay on the same page about money management, and pay cash for everything. Through hard work and determination, they are able to stay debt-free and earn enough income to finance their travels and their future.
Meeting this family was a life-changing experience. Until then, we just assumed debt would always be a way of life. When I asked the Cunninghams how they could afford to support a family and build wealth on the road, they generously gave us a copy of the book Total Money Makeover by debt-free guru Dave Ramsey. This book has changed the lives of thousands of Dave fans from around the country; it transformed ours and can do the same for you too.
Dave Ramsey gives debt-free living advice each day on radio stations across America. Dave’s seven “baby steps” have helped countless people get out of debt and build secure financial futures by teaching them to live without plastic. If you’re ready to step into a debt-free lifestyle, start with Dave’s first three steps before you hit the road, and then stay on track with his other four after your new mobile lifestyle and income is established. In a nutshell, here’s how they work:
Step 1: Start an Emergency Fund
Begin by saving $1,000 for an emergency fund. This helps you learn how to set money aside for future use and brings peace of mind knowing that money is there when (not if) you need to pay for an unexpected repair on your rig.
Step 2: Start Your Debt Snowball
List all of your outstanding loans and start paying off your smallest debts first, then tackle higher balances. Make minimum payments on all but the smallest one, paying it down as fast as you can then moving on to the next. Ignore interest rates; this “snowball” technique helps you experience a greater sense of satisfaction as you quickly pay off each balance.
Step 3: Save Three to Six Months of Living Expenses
Once you have eliminated all debt except a home mortgage, build a larger emergency fund for lean times. This will be your insurance policy for when no money is coming in or could allow you to slack off for a while without worry. Put these funds in a money market account and keep them separate from your emergency fund.
Dave’s first three baby steps are a must if you want to hit the road worry-free. Once you’ve taken those steps and are making money while traveling, follow Dave’s other baby steps, which include investing 15 percent of your household income into retirement accounts, building your children’s college fund if applicable, and paying off your stick-house mortgage (assuming you didn’t sell your house before you started traveling).
Dave’s website is daveramsey.com. Other great resources to help you get in the debt-free frame of mind include the “Man Vs. Debt” blog (manvsdebt.com), which has inspired thousands of people to downsize and get rid of debt so they can live their dreams, and “Early Retirement Extreme” (earlyretirementextreme.com), which bills itself as “a combination of simple living, anti-consumerism, DIY ethics, self-reliance, and applied capitalism.”
Most of us were taught that debt is a way of life, but it doesn’t have to be that way. If you have the full-timing bug, I’m willing to bet that you are a lot like me; a fiercely independent person who loves defying convention and making your own rules as you go. If you can relate to this description, remember that debt will never let you live life on your terms; it will always force you to comply with someone else’s stipulations. As Dave often says, “The borrower is slave to the lender.”
To experience that real sense of freedom that the road-tripping lifestyle offers, join the debt-free movement. You’ll know complete freedom when everything in your life is paid for, from your groceries to the roof over your head and the wheels beneath your feet.
Rene Agredano is a full-time RVer and location independent entrepreneur specializing in writing, marketing and advocacy. Her road trip experiences and suggestions for debt-free living are chronicled in her blog at LiveWorkDream.com.