This blog post was originally published in Canadian MoneySaver Magazine, Nov/Dec 2016, Vol. 36, No. 3. By Margot Bai, Contributing Editor for CMS for over 10 years.
Do you dream of RVing around the continent on an extended road trip? Have you wondered how you could make this work, whether while working, or on sabbatical or in retirement, part-time or even full-time? The cliché Canadian Rver is the retired snowbird, escaping winters down south in their Class A “bus” motorhomes! But RV life has many iterations and this is perhaps it’s greatest strength: every RVer can create their own version of the lifestyle from type of rig to extent of travel, and means of funding.
Is RV life for you?
While I will be the first to admit that RVing is not for everyone, RV life is best suited to those who truly want to travel and explore new places. Avid RVers talk about having the Wanderer Gene and tend to get a bit antsy if they stay in one place for too long. It also helps if you are adaptable and self-sufficient, and can embrace a minimalist lifestyle. You can learn much about RV life by reading the blogs of RVers and paying special attention to the challenges RVers face.
New RVers often assume that bigger and more luxurious RVs are better. Many later regret choosing an RV that is too cumbersome or expensive. Larger RVs are difficult to maneuver generally, and can make it impossible to access smaller campgrounds, such as those found in National Parks. Financing a new RV can lead to onerous monthly payments and being “under-water” on your rig. Experienced RVers know there is no perfect rig, only trade-offs, and only after some time on the road can you figure out which trade-offs are right for you. For that reason, buying a more affordable, used RV the first time is always a good strategy. With experience, you will have a better sense of what your dream RV looks like, plus what you can afford.
RV life involves more than just adjusting to a smaller space with less stuff. A fixed-location, owned home provides the daily convenience of a secure space and endless resources. Conversely, except when paying for “full-hookups”, RVers need to closely monitor and replenish their supplies: water and sewer, electricity, propane and even cellular data require time, effort and/or money to constantly resupply. Living on limited resources represents a significant lifestyle adjustment for most. Many RVers equip their rigs with solar panels, large battery banks, and large water holding tanks to enable extended “boondocking” or off-grid camping.
Boondocking can allow for huge savings on camping fees but only after a significant upfront investment in equipment. In the US there are free camping options such as the BLM lands in the southwest and the National Forests across the country; in Canada the options are fewer and harder to find.
Full-Time RV Nomads
A Full-Time RV Nomad is a person who lives and travels in their recreational vehicle year round, and considers it their home, without retaining a “sticks and bricks” residence in a fixed location for their own use. This very moment, a vibrant community of FTRV nomads are criss-crossing North America in motorhomes, travel trailers, spacious fifth wheels and more, and busily documenting their adventures online. While many are semi or fully retired, a significant number work nomadically, either via online businesses or by traveling to where work is available. Most move north and south with the seasons in search of temperate weather year round. The vast majority are American and/or based in the USA.
Full-time RVing has a few key advantages: since you eliminate the cost of a fixed location home, there are more funds available for travel. For some this means simply eliminating their rent or mortgage payments (plus utilities and property taxes). For others, this can mean accessing the capital they have built up in their home. Full-timing also alleviates the responsibility of maintaining a fixed location home, particularly for home-owners.
However, trying to RV full-time poses special challenges:
Mailing Address: For income tax and insurance reasons, you must have a physical mailing address that cannot be a post-office box. Most full-time RVers ask a family member or friend to receive their mail under the guise that they are effectively “renting a room” in their home. Given this location will dictate the cost of your car insurance, your offspring or siblings may be an expensive choice. All RVers (full or part-time) should set up e-billing and pre-authorized payments whenever possible, plus have a firm grasp of when their various financial commitments are due (eg. insurance renewals).
Health Coverage: Health insurance also presents special challenges to the Canadian full-time RVer. Canadians must be physically present in their home province for the required minimum number of months to continue to qualify for their provincial health insurance plan year-round (typically 5 months but with a 2 year exemption available every 5 years). As a full-timer, you may have dreams of traveling across Canada during the summer months: doing so will render you ineligible for your provincial health coverage, despite the fact that you continue to pay your income taxes. While it is possible to buy your own health insurance coverage to replace your provincial plan, it is very expensive.
Conversely, if you maintain eligibility for your provincial health plan, travel health insurance for up to 6 months internationally plus 1 month out of province can be purchased relatively affordably, as long as you are in reasonably good health. Since, health problems can drive up the cost of insurance premiums to excessive levels : maintaining good health is your best strategy to keeping health coverage affordable.
Downsizing: Another hurdle all full-time RVers face is completely emptying out their home. The process of downsizing is a mountain of work with many difficult decisions. Getting rid of everything could backfire if you change your mind early on and decide full-time RVing is not for you; paying for monthly storage can quickly exceed the value of goods stored. Asking family or friends to store things for you is usually an unwanted imposition. Coming to terms with your stuff is a difficult and unavoidable part of transitioning to full-time RV life.
Exit Strategy: Full-time RVers should have an exit strategy should they later want, or need, to come “off the road”. Whether due to health problems, aging parents needing care, or simply the desire for a more stable lifestyle, it is reasonable to assume that one will not want to continue to live and travel full-time in an RV for the rest of one’s life. When you choose to come off the road, you will need funds to either rent or buy a new place to live. As such, rather than spending the proceeds from the sale of your home, full-time RVers would be wise to invest the capital and live on the income instead.
Working Versus Retirement
In the USA, many full-time RVers are not retired and pursue income-generating activities as they travel. They are able to travel south to escape the worst winter weather while still being legally entitled to work. Not so for Canadians: we cannot legally pursue any gainful US-based employment without proper pre-authorization. Even accepting a non-monetary benefit, such as a free campsite in exchange for campground hosting, is considered taking a job away from an American and is not allowed. To escape the cold and play by the rules, Canadians snowbirds must be prepared to pay for their foray down south from their Canadian-based savings and/or income, and be able to prove it when they cross the border!
Part-Time RV Life: Snowbirds
Given the issues would-be full-time RVers face, most Canadians approach RVing as a part-time lifestyle, whether on sabbatical, while working, or in retirement. Having a home base in your home province means you will have that all important residence address, and a place to lay your head for the required 5 months per year to maintain provincial health coverage.
Part-time RVers who escape south in winter, returning to their Canadian home for the warm weather enjoy the best of both worlds. Many part-time RVers downsize to a more affordable, lower maintenance home, since they plan to be away more frequently. Even so, the overhead associated with retaining a personal residence while traveling extensively can be prohibitive for many.
Snowbirding part-time, pre-retirement works especially well for those engaged in seasonal industries that create sufficient income to pay for part-time travels during the winter months. Whether you work as a landscaper, in the summer tourist industry, or engage in some other seasonal business, you are making hay while the sun shines. If you can save up enough from your summer income to fund it, wintering down south in an RV can be an affordable way to escape the cold and scratch your travel itch, when earning a good income is out of reach.
While Canadians are allowed in the USA for up to 182 days per 12 months, snowbirds should submit to the IRS Form 8840: Closer Connection Exception Statement for Aliens . This form protects Canadians from the possibility of their Canadian income becoming subject to US income tax laws by demonstrating that they have stronger financial ties to Canada than the USA. The form must be submitted by April 15 in the year following any year you were substantially present in the USA.
Rich in Experiences
Canadian RVers face many obstacles. However for some, the call of the open road outweighs all these challenges. RV life has the unique advantage of combining the comforts of home with the adventure of travel at a price point that can be sustainable for the long-term. A nomadic lifestyle gives access to new places and people that will make you rich in experiences rather than stuff. For those of us with the wanderer gene, we would have it no other way.
Margot Bai’s latest eBook is Rent Smart: Buy Profitable Rental Properties, Create Quality Apartments and Place Great Tenants (2015). Also newly revised and updated in eBook format for 2015 is her first title Spend Smarter Save Bigger: Finding BIG Savings in your Home, Mortgage, Vehicles, Insurance and Investments. Download free samples or buy the complete ebooks at www.margotbai.com.