Budgeting to live in vacation homes full time

When we talk to people about how we live full time in vacation rentals, the first thing people say or think is how do they afford that?  Or, we could never afford that?

So, let me show you how to budget for this way of living.

First, you must know everything that you currently spend.  It’s easy to let a lot of small expenses go by without being accounted for.  You have to stop this leak and account for every dollar.  We use two budgeting tools.  First is Mint.com and second is Dave Ramsey’s Gazelle Budget.

I handle our budget and spending.  Nothing gets spent that I don’t account for.  Other than spending money, I don’t track what Jodi spends of her own money.

Jodi gets paid twice per month, so I start the budget with what we need to save and pay from each pay period.  In order to know what we can afford for each vacation rental I took the total of what we paid to live in our old house and split it between both months paychecks.

We accounted for everything that was spent to live the old way.  These are the budget items that were involved in living in our old house:

1. House payment

2. House insurance

3. Home repairs

4. Yard maintenance

5. Electricity

6. Gas

7. Cable

8. Internet

9. HOA Dues

10. Property taxes

11. Home Maintenance and cleaning

12. Landline phone(if you have one, we didn’t)

13. Water

14. Miscellaneous “pop-up” items

Total all of these individual expenses for a month in your current home, divide by how often you get paid and viola!  You now have what you truly spend each month to live in your house and presumably what you can afford to live in a vacation rental.  We don’t rent houses that max out our budget if we can help it.  This allows for more money to go into savings and provides a cushion for those unforeseen expenses.  We do our best to account for everything, but sometimes we get surprised by some expense, usually a small one.

So, there it is.  If you were thinking we were living in vacation homes because we’re super rich, you thought wrong.

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