Full-Timer’s Primer: Mitigating Losses

Tips on saving money; researching resort sites; and assessing your financial health before heading into the full-timing lifestyle.

By Janet Groene, F47166
February 2011

Just when you think you have the best business model or the best buy in a campsite, something happens to throw a monkey wrench into the machinery. An FMCA member recently wrote to me explaining how he had lost his motorhome and his full-timer’s lifestyle, all because of a series of snafus that began with a highway breakdown.

According to the extensive report, he called his emergency road service and was towed to the nearest service facility. Then the trouble began. By the time he realized that the service station’s technician had falsely claimed to be certified to work on the motorhome’s engine, the diagnostic charge was already $2,800.

“We were between a rock and a hard place,” the FMCA member lamented. The full-timing couple went “home” to their empty lot in another state and found alternate housing. Meanwhile, back in the state where they broke down, costs mounted for storage fees and repair estimates.

From their home base several states away, they were unable to find a buyer for a motorhome with an engine that the mechanic told them was unable to be repaired. The coach was sold to a salvage yard where the couple eventually was able to reclaim their personal belongings.

They had signed over their 1994 motorhome, which had new equipment, including a state-of-the-art refrigerator, a new RV satellite, and a new $3,500 transmission. They also paid the service center’s charges of $2,800.

Questions about the situation remain. For example, this reader asked to be towed in the direction of his travel rather than to the nearest facility, which was 20 miles closer. He didn’t indicate in his letter whether he offered to pay for additional miles. He also didn’t indicate at what point he realized the trusted technician was not certified to work on the engine or what steps he could have taken.

The moral of the story is to know what your emergency road service policy does and does not cover, including towing limits. They are usually expressed in miles or specify “nearest service facility.” If it’s the latter, determine whether this means just any garage, a generic RV service facility, or a repair station certified to handle all equipment on your motorhome, including the engine.

Additional Tips For Full-Timers

• When using a new cell phone app, read the screen carefully. Some app buttons take you to a pay-per-minute site. Beware, too, of accidentally hitting the Internet button on your smart phone unless you are actually going online. Each hit may incur a 99-cent Internet connection fee.
• Motorhome maintenance costs keep rising. But you may be able to do some of this work yourself. Start with easy tasks such as servicing the batteries, doing lubrication work, and learning to use a multimeter to test electrical circuits. Read the service manuals that came with the motorhome and its components, from the microwave oven to the engine. Most manuals contain troubleshooting and maintenance tips for owners.
• If you’re offered a free upgrade to your cell phone, it probably means that you’ll pay additional monthly fees for added services. You might also have to agree to a new two- or three-year contract starting from day one of the new contract, even if your old contact was well on its way to completion. A good place to compare phones and plans is www. billshrink.com.
• Take advantage of the days when admission “” but not camping fees “” is free at national parks and sites. Don’t overlook little-known national monuments and historic sites for day trips. In 2012, free dates at National Park Service properties are January 14-16; April 21-29; June 9; September 29; and November 10-12.
• When sightseeing, note that most museums have free days or times. It may be a certain day each month or after a certain hour on certain days of the week. Call ahead or go online to find free times. Also check out the facility’s admission discounts for veterans, seniors, families, etc.

Should You Buy An RV Resort Site?

Real estate prices and interest rates these days make it very tempting to purchase an RV resort site, but will prices rise or go lower? Before taking the plunge, here are some things to look into.

What is the maintenance fee at the park or resort? Is anything written into the contract to limit future increases? Sometimes this fee may be tied to the Consumer Price Index or increases in Social Security payments.

Does the park have a high occupancy rate all year, not just in season?

Are current site owners up-to-date on their fees and mortgage payments? A wave of foreclosures or defaults may be just around the corner.

How much of the yearly resort budget goes into a reserve for emergencies and replacements? It should be at least 10 percent. If the park is 5 years old or more, replacements and upgrades could require a big special assessment for a new sewage system or other infrastructure. You also could get hit by rising compliance fees for the growing list of local, state, and federal environmental and work safety regulations.

Measuring Your Launch Value

Even if you have been RVing for years and have a good idea of the costs you will incur when you begin full-timing, it’s scary to take the plunge without knowing what your total nest egg will be after making the big break. Here are tips on how to determine your net worth right now.

Begin by adding up the following assets.

• Cash and CD accounts and the cash value of your life insurance. These will continue to grow slowly. If your pension or annuities have a lump sum worth, add those, too.
• Add up the value of tax-sheltered accounts such as IRAs. They can rise or fall depending on where the money is invested. Subtract 15 to 20 percent from the total amount for uncertainty.
• Add up the value of stocks, bonds, and mutual funds. They could rise or fall and are subject to yearly taxes, so subtract 15 to 20 percent for uncertainty.
• Be realistic about the price your stationary home will bring. Subtract 10 to 20 percent of your base price to cover the costs of getting the house ready to sell and selling it. If you already have an RV, add in its equity. Depending on the length of time and the payments you’ve made, this could be a negative number.
• Other property has value, too. Be realistic about the current value of jewelry, collections, or a vacation home. Subtract yearly costs in upkeep and taxes, keeping in mind that values could increase. Add up current values, then subtract about 15 percent for uncertainty.
• Vehicles have “Blue Book” or trade-in value. Use this value unless the vehicle is in subpar condition.
• Now start adding up your expenses, which will include unpaid mortgage on the house and RV, along with all other debts and credit card balances.
• Subtract the debts from the assets and you have a very conservative estimate of your “launch value.” Can this net worth provide enough income to support the budget you have worked out for food, fuel, campsites, and other full-timer expenses? If not, start thinking about ways to earn money while full-timing.

{loadpositionEndBlurbFulltimers}