Over the last couple of years we have been asking client’s what their three-year vision and ten-year vision are. We get answers all over the board. Some looking to remodel their home, others looking to travel abroad for weeks at a time. Others are looking to buy or upgrade their Recreational Vehicle (RV). With the RV topic we also get the “I know you would probably advise against this, but…” statement.
Our goal as financial advisors at KWB is to help you work toward the things you want in life. This is why we ask about your goals and consider them as we build and update your financial plans. Retirees and those still working can all plan and build an RV purchase into their life and financial goals. If you are thinking about making a new purchase or upgrading your existing home on wheels, we have a few things you should be thinking about.
Before even setting a budget, you should consider the use factor. The median annual usage of RVs is 20 days. Meaning that a lot of RVs sit in storage for 340 days of the year. You should consider how much you will use your new RV and it's important to be honest with yourself. The other factors of use are how long you will travel in your RV and how far you will go. If you are retired, you may travel long distances for a longer period of time. This may mean you need something bigger. If you are working and plan to use the RV for short weekend trips to the beach, you may choose to go with something smaller.
Now that you have determined what RV usage looks like for you and your family. It’s time to think about how much you want to spend. You should come up with a dollar amount, determine how much if any financing you will need, and don’t budge! When you head off to an RV show or dealer lot, it will be enticing to increase your budget as soon as you step foot inside that fancy fifth-wheel “just to see what it's like.” If you don’t know how much to budget, this is where your KWB financial advisor can help. We can build some scenarios into your financial plan and see how the purchase impacts the rest of your goals. When thinking about budget, it's important to consider the amount of usage, and the size of the RV. If you don’t plan to live in it for weeks at a time, spending less may be the way to go. Also, larger RVs have more surface area to maintain and cost more to store.
This brings us to an important part that few want to talk about. RV maintenance. As an RV owner, I will tell you that this is very important! RVs are boxes framed by wood or metal that go bouncing down the highways, and if you live in California, well the lifespan of your rig is likely even more reduced by our roads! With all this bouncing around things crack, break loose and fall off. Sitting in storage and getting beat by the elements of sun, rain and wind also don’t help. The average maintenance cost of an RV can be anywhere from a few hundred to several thousand dollars. You could expect at some point to spend roughly 10% of the purchase price on repairs and upkeep in one year. This can be prevented and reduced through a normal maintenance schedule.
I mentioned earlier that the median RV usage is 20 days. That means that the RV sits in storage for 345 days of the year. If you don’t have a free place to store your RV, then you may be paying upwards of a few hundred dollars a month on storage. As you are building your budget, don’t just think about usage and size for a price point. Do some research on what it costs in your area to store the size RV you are looking at.
Now that you know how you will use your RV, where you will store it, and the expected maintenance costs, you can start looking at features. This is where it gets fun! I am a features guy. When I bought my last travel trailer I scoured the market for the features I wanted and found a couple manufacturers that had what I wanted. I then chose the model based on my budget. If you are new to RVing, do your research on the endless features out there and decide what is most important to you. If your budget allows for you to buy the higher-end RV with the features you want, awesome!
As we have asked clients about their long-term vision, fewer are the days of leaving every dollar they can to their heirs. Today we are seeing that more people would like to enjoy the funds they have saved with their heirs. One way many of our clients are doing so is through travel, and a lot of our clients love the RV lifestyle and the adventures with the family.
The team at KWB is all about helping clients enjoy life and the fruits of their labor. If you are thinking about buying or upgrading your RV let us know and we can help you plan for it. If an RV is part of the picture in your brighter life, let’s make it happen!
~ Quentin Bubb