How to Make and Budget Money

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Frugality is one of the most beautiful and joyful words in the English language, and yet one that we are culturally cut off from understanding and enjoying. The consumption society has made us feel that happiness lies in having things, and has failed to teach us the happiness of not having things. – Elise Boulding

If you are feeling a little motivated to try vehicle living, your next thought is probably going to be, “It sounds great, but how can I afford it?” My question to you is, “How can you afford not to?” The key is to reduce your expenses to the absolute minimum so you have a minimal need for money. For most of us, housing is our single largest monthly expense. Wouldn’t it be wonderful to become your own landlord and get rid of that huge monthly bill? And that is exactly what you do when you move into a car, van or RV. How could that be an economic hardship? Your next thought might be, “But won’t I still have to pay for a RV park?” You can but you don’t have to. You can either do what I do and live on public land, or you do what we call “stealth parking.” That is parking in cities so that you blend in and no one notices you are living in your van. I lived in a city in my van for 6 years and never paid a penny for camping and rarely had any problems with it and then they were just minor problems. For the last 3 years I have been living on public land and have never paid a penny for camping. So you don’t have to spend any money on camping. Another way you will save lots of money is by breaking free of the consumer society. Because of your very limited space, you simply must stop buying needless stuff. It’s true you may spend more on gas each month because you will have to drive more, but that is a tiny amount of money compared to the savings on rent, house payment, and utilities. Some people find that when they live in a vehicle, they spend more money going out to eat at restaurants than when they lived in a house. But that doesn’t have to be true. I cook a meal in my van or camper nearly every night and rarely eat out. You can easily do the same. All you need is a propane (or butane) stove, a few pots, and a dish pan to do dishes in. So overall, living in a van will save you lots of money.

 We make ourselves rich by making our wants few. – Henry David Thoreau

Another question I hear quite often is, “How can I afford to work less and travel more?” Let’s take a look at ways to support the traveling lifestyle.

  • Live on a Pension or Social Security: I know many people who live in their van or RV and draw on Social Security or Disability. I’m drawing a pension right now. After my divorce, I kept working at my job and living in my van. I stayed at that job until I was eligible for early retirement and grabbed it up. It’s a small pension so I am a work- camper to supplement my small pension, but in a few years I will be eligible for Social Security and I won’t have to work unless I want to.
  • Work-camping: Basically you can work for private RV parks or as a campground host in the National Forests. I don’t recommend private RV parks because part of your hours worked aren’t paid for, they go toward paying for your site. Why pay for a site when there are so many places to stay for free? In National Forest campgrounds you get a free site and are paid for every hour you work. The pay is usually the minimum wage of the state you are in. I love doing it. You spend your summer in a beautiful forest in the mountains, generally the campers in your campground are really nice people, and it is good work. What I like best about it is that when the season ends, I am laid off. That makes me eligible to draw unemployment all winter. The amount you can make on unemployment depends on the state you are in and how much you made over the summer. Without getting into too much detail let me say that because my expenses are so small, I generally make enough money on unemployment to live on for the winter.
  • Be Self-Employed: Being self-employed is harder while living in a car, van or RV, but it can be done. 1) The first problem is lack of space. For example, if you are a handyman, you will need lots of room for supplies and tools. One solution is to live in a box van, box truck, or step van, which gives you extra space. A second is to pull a cargo trailer which holds the business items. 2) Another problem is advertising. Word of mouth is the best advertising, but if you travel, you’ll never be in one place long enough to have any. Just as you are developing a client base, you’ll move on. The best solution is to be in a business that doesn’t depend on advertising. For example, if you sell crafts you don’t need advertising, people will see your product and either like it or not. You can get word of mouth by selling on the Internet and setting up a website. Once someone buys your item, they can send others to your website to buy one if they like it. 3) That raises another problem with being self-employed in a van or RV. What will you do for a reliable Internet connection? One good solution is a phone with a data plan with the cell phone companies. But it has problems. First, there is either a 5 or 10 gig limit and then it becomes expensive for anything over those gigs. If you want to make sure you’ll never go over your monthly limit, prepaid phone plans are a good way to stay under      your budget. Second, it isn’t always available. With most data providers you nearly always have a strong signal, but in some remote places there simply isn’t any reception. One possible solution is Internet by satellite, but because I know little about it, I will leave you to do your own research. Now let’s look at some possible jobs for self-employment in a car, van or RV. There are tons of books and Internet sites about working for yourself. Here are some ideas, but you need to do your own leg work and research to find one that suits you.
    • Sell your artwork or crafts
    • Be a handyman
    • Sharpen knives
    • Make keys
    • Wash cars
    • Buy and sell on the Internet
    • Be a Webmaster/creator
    • Be a food vendor (hot dogs, etc.)
  • Work  and Save, then Travel on the Savings. Basically, you work at a job and live as cheaply as possible, putting every penny you can into savings. Then you quit your job and travel. When you run out of money you stop where you are and take the best job you qualify for and work there until you build up your savings again. Once you have enough, you quit the job and travel on your savings. For this to work you really have to learn to be frugal and budget so let’s take a look at some principles of keeping a budget:

Money never made a man happy yet, nor will it. There is nothing in its nature to produce happiness. The more a man has, the more he wants. Instead of its filling a vacuum, it makes one. If it satisfies one want, it doubles and trebles that want another way.Benjamin Franklin

Keeping a Budget:
There are four key elements to setting up any budget:

  1. Don’t Have Any Debt, Especially Credit Cards: I can’t stress this too strongly! Live on a cash-only basis. If you can’t afford it today, you can’t have it today, it’s that simple. By living in a vehicle, we reduce the amount of money we need to a minimum. Since we paid cash for the vehicle, we will always have a roof over our head. How much more money can we need? The only thing we absolutely have to have is food, and that can be as little as a few hundred dollars a month. And if worse comes to worse we can get food stamps, go to rescue/soup kitchens or find churches/agencies that give food away to those in need. You generally don’t have to go hungry in modern America. Beyond food, we need some money for gas and car insurance and that is about it. We can easily live on a minimum wage job and there are lots of those around. So there is no reason we should ever need to be in debt. The problem is that there are things we want that cost more money than we have right now. For example, let’s say we want to buy a solar panel so we can have more electricity. When consumerism was our god, we would have run right out and bought it with our credit card and paid 20% interest (or more) on that purchase. But now we are cash only, so how do we get the things we want? It’s easy, we will budget for it.
  2. Budget for Large Purchases: Let’s say our solar panel costs $400. We look at our budget and it looks like we have an extra $40 that we can set aside for the solar panel. So we set aside $40 every month for 10 months and then we pay cash for the solar panel. I know this goes against the grain of everything modern society screams at us through the media, but it is what our parents and their parents did for thousands of years before them; they lived within their means without going into debt! Why was it so much easier for them to stay out of debt? Because they didn’t have the mass media to brainwash them into thinking they couldn’t live without the latest and greatest thing.
  3. Break the Spending Addiction: I have found two things that help me stay away from compulsive spending:
  4. Have an Emergency Fund: Emergencies are one of life’s certainties. It’s inevitable that our vehicle home is going to need a repair, or we may need emergency dental work, or we may have to fly home to see a sick relative. How are we going to pay for emergencies if we refuse to go into debt? Easy, starting today we are going to set aside a small amount of money every month into an emergency fund, and we are going to keep doing it until we have enough money in it to cover our worst case scenario. Just about the worst case is if we blow an engine or transmission. As of this writing (in 2011) you can get either rebuilt for around $3,000. So I recommend that as a minimum emergency fund. I also recommend you keep it in cash, hidden in your vehicle in a fireproof safe. There is some risk to keeping it in cash: first, you will be more tempted to spend it on non-emergencies; second, the vehicle can be stolen or catch fire. The advantage to keeping it in cash is that if you are in the middle of nowhere and you break down, you can pay to get it fixed immediately and get back on the road. If the money is in your savings account, and they won’t take checks, how will you get it out? It can be a problem. You will have to weigh the pluses and minuses for yourself and make your choice, but I keep mine in cash.
    • Stay out of stores, both stick-and-brick and Internet. If you are like me, and are suspect able to compulsive spending, stay away from temptation. Don’t go into a store without a list and when you get there, stick to the list. If it’s not on the list you have to leave and wait a day to make a new list, and if you are sure you need it, you can go back later to get it.
    • Avoid the media as much as possible. Everyone claims that they aren’t influenced by advertising but that is rarely true. We all are to some degree. If you have any tendency to spend compulsively, you are very susceptible and the best thing to do is avoid its influence.
    • Spend Time in Nature: The Earth has healing powers! It brings joy and contentment deep into your soul and fills the void and emptiness of your life. As you surrender to its majesty, you will find the addictions of your life falling away.

Society drives people crazy with lust and calls it advertising. John Lahr

A Simple, Practical Budget:
I struggled with money all my life until I met a friend who was both older and much wiser than I am. We will call him Desert Rat or DR for short. He lived a simple, frugal life and loved it. By following his example, I got my money problems under control. DR is 65 years old and has been living full-time in an older Class C motorhome He lives in the South West United States, so in the summer he moves up to the higher elevations in the National Forests where it is cooler and uses dispersed camping. In the winter he stays on BLM desert land for free. He draws $1,000 a month from Social Security, and tries to live on half that amount, which he usually does. He isn’t comfortable unless he has $5-6,000 in cash, in the RV with him. What does he do once the emergency fund is built up? He keeps paying into it! He wants to keep up with (or get ahead of) inflation. He has his SS check auto-deposited into his checking account every month. His few regular bills (Verizon Internet service, Direct TV, and insurance on his RV) are set up on auto-pay, so they go out automatically and he never misses the money. At the beginning of the month he takes out a few hundred dollars in cash to pay for food, gas and miscellaneous expenses. As he spends money he writes it down and keeps a running total of how much he has spent and how much he has left. He rarely spends more than $500 a month, and the rest goes into his emergency cash fund. It is a very easy, informal system. He doesn’t fret about his spending or deny himself simple pleasures. He goes out for breakfast at a local diner regularly and leaves a $20 tip. He loves a local no-kill dog-shelter and will often pick up a 50 pound bag of dog food and drop it off, then go and spend time with the dogs. His secret is that he never spends money unless it is on something he really wants and there just aren’t that many things he wants.

Happiness consists, not in possessing much, but in being content with what we possess. He who wants little always has enough. – Zimmermann

Most of us haven’t reached DR’s level of contentment with life so we need a little more organization. We’ll follow his example and get our pay-checks auto-deposited and pay our (very few, right!) recurring bills by auto-pay. Just like him, the next thing we will do is put cash into our emergency fund, so it is always growing. The difference will be when you take out the cash for daily spending. Instead of just putting it in our wallet, we will put it into envelopes assigned to spending categories. The minimum would be three envelopes called “Food,” “Gas,” and “Misc,” If we are saving for something special (like a solar panel) we would have a fourth envelope called appropriately, “Solar Panel.” For example, if we have $500 left to spend after our bills are automatically paid and putting money into the emergency fund, we will put $250 in the food envelope, $100 in the gas envelope, $100 in the misc., envelope, and $50 in the solar panel envelope. And that’s what we have to live on for the month. You will want to keep track of the balances as you go through the month. If you use extra gas on a longer trip the first week, that means you will have to drive less each week for the rest of the month. Toward the end of the month, if one of the envelopes is running low, but another has extra, you can move the money around. Ideally, at the end of the month the envelopes will have extra left in them. That money can then be carried over to next month’s envelopes or it can be put in the emergency fund. Or, you can just go out and splurge with it, nothing wrong with that!!

Debt is the slavery of the free. – Pubilius Syrus

The great thing about this simple budget is that it works. At first it will seem like a duty, and you are denying yourself too much. But after a few months your emergency cash will start to grow into a pretty big bundle of cash, and your solar panel envelope will get fuller and fuller. And that feels really good! As it grows you will get more excited and want it to get even bigger. You will begin to feel a certain calmness come over you. Before, you were living paycheck to paycheck, always wondering where the money was going. Constantly worrying about money was part of why we spend compulsively. Deep in the back of our mind was the thought, “I don’t know if I am going to have any money tomorrow, so I better buy this thing right now. It’s now or never.” But with a big wad of cash hidden in the van, that fear is gone. I can wait to buy it for a while and by then I will be really sure it is a wise purchase. The emergency stash will eliminate our fear about money because we know that, no matter what happens, we will be alright. After a few months we will buy the solar panel and that will feel great. So we will start saving for something else, and again, after a few months we will have it. Eventually, being frugal won’t be a hardship at all, it will be the doorway into a new world without money worries, a world where you get all the things that you really want, and you don’t have to buy the many, many things you really don’t want. Life is good!

Men for the sake of getting a living forget to live. – Margaret Fuller