Spending Update

Cost of Vanlife: Spending Update – 2017 Q1

Two of the most common questions asked of people who travel full time are: “How much does it cost?” and “How do you earn an income while traveling?”. In this post, I’ll share my spending details for the first three months of 2017. I’ll continue these updates each quarter. This may help you estimate how much you’d spend living a similar lifestyle. In other future posts, I’ll share more details of how I saved and invested in order to create (what I hope will be) enough lifelong income to fund all my spending.

I want to show you that a lifestyle like mine – full of travel, adventures, living in beautiful places, meeting fascinating new people, and even pursuing hobbies that aren’t exactly inexpensive – can be had for quite little money.

First, some clarifications:

  • I will share a spending update at the end of each quarter.
  • I track and include every single dollar of spending. These updates are not just the money I spend on travel or my van, it is every dollar I spend.
  • I’ll share the total of how much I spent, and details of what I spent the money on. I’ll differentiate between spending on what I’ll call “essentials” and “extras”. If you’re thinking about how much you’d need to spend for a certain lifestyle, it’s likely my “essential” spending amounts will be more useful than the “extras”. The lists below show what I include in each category. As you’ll see, there are grey areas, and a lot of what’s in the essentials category is not truly essential. But for the sake on simplicity, this is how I’m categorizing them.
    • ESSENTIALS:
      • All Van-related costs (gas, insurance, registration, maintenance, repairs, improvements, tolls, tickets, etc.)
      • Food (including eating out)
      • Healthcare (Insurance, any services, any supplements)
      • Hygiene products, household goods, internet, clothes
      • Anything else that doesn’t fit in the “Extras” category
    • EXTRAS:
      • All spending on hobbies
      • Any extra travel (like if I fly somewhere to see family or friends)
      • Dating
      • Alcohol, tea
      • Books, movies/shows, concerts
      • Any other spending on entertainment
      • When I sell some hobby equipment, I count it here as negative spending
  • I have a more or less fixed income of around $1,500 per month. I spent a decade being a good cog in a large manufacturing machine. I invested much of my income and those investments are now the source of my ongoing income. So far, the $1,500 per month seems like more than enough to fund my lifestyle. I’m motivated to spend less than that, but I don’t much desire to spend as little as possible. Many other travelers are in different situations. Some work full time and need a way to find enough income to cover their spending. Some who travel have saved up some money and are spending that cash. Once they run out of money, they’ll go back to work. These last folks have much more motivation to spend as little as possible because it means traveling longer.   My income will continue no matter what I’m doing, so I don’t have those reasons to reduce my spending as low as possible. Other people who travel or live in a vehicle full time have told me they spend only $200 per month.
  • One of the reasons I’m sharing my spending is to help dispel a common misconception people are indoctrinated with from childhood: that spending money makes you happy. For the most part, there is little connection between spending money and happiness or joy. Recent data currently shows that happiness increases as income increases, but only up to $75,000/year, and then it doesn’t really make a difference. Consider for a moment that this data comes from a population indoctrinated that more money means more fun. Much of the money I’m spending is not to “buy happiness”.  It’s mostly just to exist as I do. My happiness and joy come primarily from the perspective from which I view things, and secondarily from how much I’m learning/growing and how many fun things I’m doing. Much of my spending on “extras” is to buy things that I will use and many many times. It’s not trading money for one-time happiness or entertainment. It is important to break yourself of the common misconception that spending money = entertainment/happiness. I don’t mean to say that spending money on experiences is wrong for absolutely everyone, but I do think many people spend money this way indiscriminately. I’ll surely rant on this in later posts.

Spending Update – 2017 Q1

For Q1 of 2017, my average monthly spending was $670.  This is right about where I like it.

Spending Update

I spent an average of $500 per month on essentials, and $165 on extras.

My “essentials” spending in Q1 was mostly food and gas, and the level of spending is about what I want and expect. My food spending feels pretty high, but I’m eating very well.

Spending Update

The “extras” spending in March included:

  • Some tea
  • Bike parts – tubeless tires and some parts for setting them up
  • Bike parts – a smaller inner chainring (I’ve been riding up some really steep forest service roads and have to walk sometimes)
  • Drone parts – two batteries and a battery charger

If you remember the last post I made about spending, in which I shared how much I spent over my first 6 months of travel, my spending was much lower these last three months. This chart shows what changed:

Spending Update

I expect my ongoing spending to be close to what I spend over the last three months.

 

Spending Vs. Income

The chart below shows how much I spent each month (the red bars) compared to how much income I had (the green bars, with income shown as a running 3 month average to smooth it out), and a running total showing the surplus/deficit (the light red area, which goes negative).

Spending Update

In another month or two I will have gotten back to zero from the big camera purchases I made in October. That was a very uncommonly large purchase for me.

Like all types of numbers, the way this data looks depends a lot on what I select to show. I did my taxes in March and got a fairly big federal return. That money is not shown in the chart above because it’s really essentially just getting back my own 2016 income. It doesn’t apply to what I use the chart for.

If I start this chart at the beginning of the year, and include that tax money, I have a surplus of over $4,500 because I’ve spent only 30% of my income. YEAAH BUDDY!  Got it made.

Spending Update

I’ve wanted to start earning some income from hobbies.  As you can see, as long as I don’t spend a lot, that investment income easily covers all my spending. Months like January and February where I ended up with an extra $1,000 per month don’t motivate me to earn more income.

What about you?

Earlier today, I listened to the latest Mad Fientist podcast. His guest was a personal finance icon: Vicki Robin. She’s the author of “Your Money or Your Life“. If I had to recommend one single personal finance book to the wide population, this is it. In it, she helps you remove unhealthy views of money and spending (feelings of sacrifice, or guilt, or “I deserve it”). She teaches you how to properly quantify and analyze your money as your “life energy” (your time). Also, she shows you how to spend money more intentionally, in line with your personal values and with what brings you joy. She shows you how to take complete control of your spending. No more feelings of guilt or sacrifice.

Near the end of the podcast, the host asked Vicki “If you could share just one piece of advice for our audience, what would it be?”. Her answer was: track and review your spending.

Do you track your spending?

If you do: what do you get out of it? How much do you spend per month on average? Are you happy with that amount?

If you don’t track your spending: Why not? And, if this is you, stop whatever you would’ve done after reading this, and read Your Money or Your Life.

Comments

    Mind sharing what you’re doing for health insurance (esp. while nomadic)? 🙂

    I also tracking spending. In the beginning, it was very eye-opening — those recurring expenses really add up! Not sure how much I’m getting out of the tracking these days, but it’s nice to be able to look back at prior spending to make estimates for the future.

    I have health insurance I bought through the government marketplace. It’s a South Dakota plan as that’s my official state of residence. This year I’m using the same plan I bought for the second half of last year. Last year I had to pay the full price, which was around $280 per month. This year, the price went way up, to near $400 per month. But since I’m not working, my income dropped drastically and I think I’ll be able to end up right in the sweet spot with nearly maximum subsidy. I paid for the whole year of 2017 premiums last December, which was somewhere around $400. As long as the subsidy works out, that’s a pretty nice deal.

    Great job optimizing those expenses my man. The cool thing about it is the fact you probably aren’t left with wanting or a sense of missing something. Look forward to Q2 update to see how the longer view metrics leave your average monthly spending sitting.

    Hi Chris. Thanks 😀

    Yeah, there’s not a lot that I want to buy but don’t out of the need to spend less. Living in the van adds some motivation not to buy new/more stuff. There’s the added complexity of needing a place to store it, and of receiving packages being harder while on the road than with a home or apartment. But it does also cause me to think about buying things that I otherwise wouldn’t.

    I think/hope they’ll be pretty close to my Q1 expenses.

    Hi Travis,

    When you have a surplus in dividend income one month, are you reinvesting that money or are you keeping it as cash with the assumption that you’ll spend your whole 3% withdrawal rate (or whatever your number is) each year?

    Have fun,
    Brenton

    In short, I am reinvesting the extra money, but not frequently.

    It doesn’t work as cleanly as you might imagine, because I have different account types. I have a Traditional IRA, a Roth IRA, and post-tax investments. I’ll be converting probably $10k per year from the Traditional to the Roth. Then five years from now, I’ll also be moving up to $10k per year from the Roth to my Post-Tax accounts to fund spending. I’ll have to make some investment choices when I make these moves. The Traditional IRA will provide less than $10k of dividends per year, so I’ll be selling some shares here and there. When the money goes into the Roth, at least for the first 5 years, I’ll be buying new/more stocks there. Once I’m taking money out of the Roth, much of the transactions will be passing through $10k per year from Traditional to Roth to Post tax, plus reinvesting all the excess dividends in both accounts.

    While that ladder gets going, I’m spending only dividends from my post-tax investments, and I’ll probably be selling some post-tax shares while adding shares to my IRA accounts. I also let some cash float here and there, waiting until either I get around to making stock purchase choices, and to some degree, sort of waiting for stock price drops to trigger me to make those purchases.

    Hey Travis,

    I just wanted to stop by and thank you for sharing your quarterly income reports while you’re on the road!

    I’d just gotten onto the ERE forums right around the time you were selling your house and testing sleeping in the rig around your city. Actually, I read through your thread. Seriously, it was an amazing inspiration.

    It’s awesome seeing your dream come to life after all the focus, work, and determination.

    I’m looking forward to keeping in touch! And if you’re ever near Yosemite…

    Cheers!

    FM

    Hello Millennial. Thank you, I’m glad my journal was useful for you.

    I will definitely be near Yosemite. I’m not exactly sure when. Maybe next spring or summer.

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