The Economics of Recreation

I’ve had more than a few people say that spending money on boats and RVs is a waste of money. And personally, I’ve had a few people question if we are smart to spend money that way, ourselves. My resounding answer is always “yes”. According to a quick Google search, financial experts usually say to spend 5-10% of your income on vacations every year. The example given is that if you make $40,000 per year, spend $2-4K on vacationing. That scales up to where we can spend what we’re spending on our RV, and stay within 10% of our annual income, accounting for payments, insurance, storage, maintenance, and still have a few thousand dollars to spend on fuel and campsites. That allows us to “vacation” multiple times a year – 52 individual trips, assuming we chose to go every single weekend – and still remain in that range, given the prices of nearby state park and COE sites. Or we could blow the same amount of money on a stressful overseas vacation where we’re scrambling to make flights, public transport, shows, tours, and more. That may be exciting and drawing for many people, but I’d prefer the more frequent vacations and more relaxing settings possible with an RV.

Where I see the whole argument in favor of an RV falling apart is if you don’t use it, or if you don’t maintain it. Use is obvious. If you use it once per year, and spend what we’re spending, it’s far more economical to take that overseas vacation when you break it into costs per day. But if you use it 30 nights a year, as we try to average, it works out to be in favor of the RV, in terms of costs per day. So the value of having an RV directly correlates to the use of the RV, and it isn’t worth it if you don’t use it.

The other issue where the argument falls apart is maintenance. While maintenance isn’t expensive (relatively), failing to do so can be extremely expensive. These things, especially larger ones, have lots of systems that need to be maintained and lots of expensive repairs if you don’t. And if you ever get water damage, through a leaky roof or such, it can be cost prohibitive to fix. If you’ve ever heard someone refer to an RV as a money pit, they’re most likely quoting someone who didn’t properly maintain their RV, or purchased one used with a questionable history (and new vs used is a whole different conversation, but this is why we bought new).

Boats are a little different. I’ve always wanted one, and have been looking for one recently. But unlike the RV, I can’t go out and buy a new boat, and stay anywhere close to the mark I need vs income. And if I purchase one with cash, to make it fit into the equation, I have to amortize it over several years. Since I plan on buying a boat this year, we’re going to be well outside of 10%.

I asked my neighbor who is an avid boater and fisherman about how he feels regarding the “boats are money pits” argument, and he basically wrote it off like I do the RV. “It only becomes one if you don’t use it. I enjoy my boat and get a lot of use out of it, so it makes sense to me to have one”. He also owns an older RV and truck similar to mine, and at this point has paid everything off. Basically what we’re aspiring to do: pay the truck and RV off and keep them long term, and buy a boat outright. In half a dozen years we’ll own everything outright, and it’ll make drastic economical sense to have them. But for now, it still makes enough sense to me.

There are some other benefits to having an RV that you can’t put a dollar figure on. First, if we ever have a tornado, flood, or fire take our home, or have to be evacuated for whatever reason, we have a place to stay. Similarly, if someone we’re close to and trust is displaced, we can loan it to them for a while. If we need to have family or friends over, and don’t have a place to put them up, we can set up the RV as a guest house. There are plenty of scenarios where a second house or accommodation makes sense. And traveling with three dogs, you can’t rely on hotels to stay in. Most limit rooms to two.

It’s a lot more difficult for me to apply the same logic to a boat, because I can’t stay in it (except for short trips in cool weather, since I’m looking at one with a berth, or perhaps in a tent nearby). But if I use it for ten years, and have $15K into it, then it will have cost me $1,500 per year, and fits within the travel budget.

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