Living in a Van Was the Best Financial Decision I Ever Made

Ken Ilungas

By Ken Ilgunas, Special to The Motley Fool

On the first night I tried to sleep in my van, I was lying in my sleeping bag sprawled out on the backseat, parked in a mostly empty Walmart parking lot. I'd wake up every 15 minutes because I was nervous that the security guard driving past my van would knock on my door and make me leave.

My new home had 60 square feet and four wheels. While most people would consider living in a van an embarrassment, a low point, or even a "rock bottom," it would -- though I didn't realize it then -- turn out to be the greatest financial decision I'd ever made.

No one would end up waking me up in the Walmart lot, and, over the next two years, almost all of my other fears would prove to be entirely unfounded.

Debt-free; Dirt Poor

In January 2009, when I'd decided to move into the van, I was nearly broke. I had just $4,000 in the bank and no possessions other than a laptop, camera, cellphone and a suitcase full of clothes and a backpack full of camping gear.

I had next to nothing because I'd just finished paying off my $32,000 undergraduate school debt. Still, after two-and-a-half years of working, I wanted nothing more than to go back to school and get my master's degree in liberal studies at Duke University. But how could I afford tuition and not go back into debt?

My answer: a $1,500 '94 Ford Econoline.

I'd cook in it, sleep in it, study in it, and live in it. I'd do whatever it would take not to go into debt again.

Expense chartA Nation of Potential Van Dwellers

I'm not the only student in America struggling with the high cost of education.

Currently, there are over 36 million debtors saddled with more than $1 trillion in student debt. In 2011, two-thirds of graduating students left with an average $26,600 in debt.

But the problem isn't always tuition. The enormous cost of room and board -- averaging $8,500 a year for students living on campus -- can set students back just as much. For freshmen at Duke University, which would be my graduate school, the cheapest dorm option is $5,464 an academic year. The cheapest meal plan is $5,540 an academic year, or $27 a day.

By living in a van, I figured, I could reduce (if not entirely do away with) many of the costs that are drowning students in seas of red ink. And if I picked an affordable graduate program, then, well, maybe I could leave school with a debt-free degree.

Amazingly, it worked. This is how I did it:

Living in a Van Was the Best Financial Decision I Ever Made
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Living in a Van Was the Best Financial Decision I Ever Made
I flew into Raleigh, N.C., hopped on a bus, and bought the burgundy beauty I'd found listed on Craigslist for $1,500. I'd recognized that buying a van is a one-time payment while an apartment would cut into my savings every month. An inexpensive apartment in Durham, N.C. costs $500 a month. By living in a van I'd save $1,000 my first semester. In two years, I'd save $4,000. (The only expense I could consider "rent" was my campus parking permit, which came to $182 a year, a mere 3.7 percent the cost of a dorm room for a year.)
Because I already owned a number of items necessary for living in a van (sleeping bag, backpacking stove, headlamp), renovating the van was easy, cheap, and a less-than-a-day-long job. I removed the two middle pilot chairs, bought a three-drawer plastic storage container for $20, and used my suitcase as a container for all of my clothes. In total, I spent $46 on renovation materials, $30 to have someone store the middle pilot chairs, and $20 for propane canisters, which I'd use to cook my food.
Most amenities on a college campus are free or inexpensive. For example, I got free WiFi and electricity in the library, where I'd charge up my camera, laptop, and cellphone. A membership at the campus gym, where I'd take showers, cost $34 a semester -- far cheaper than your usual gym membership at $55 a month. I'd fill up water jugs at campus drinking fountains and bring them back to the van so I had cooking water. For a bathroom, I, well, got good at "holding it in."

For restaurants to make a profit, they have to drastically increase the price of a meal beyond the original cost of the ingredients. The San Francisco Chronicle reports that the price of a pizza is often eight times the cost of ingredients. Eggs cost five times more at a restaurant and pasta is marked up as much as 10 times. I decided I'd do all of my cooking.


At supermarkets, I bought cheap bulk items (bags of rice, beans, and noodles; boxes of powdered milk; big jars of peanut butter). I'd also buy fresh vegetables and mix the vegetables, noodles, and peanut butter into a stew every night that I'd cook in a pot on my backpacking stove with propane fuel canisters. After the first semester, I spent, on average, $4.34 a day on food. Compare this to the more than $5,500 a year a Duke meal plan would have cost me if I were a freshman. My meal plan, over the course of an academic year (254 days), would have cost me $1,102.

There are more elaborate personal finance software programs available, but I simply typed all of my expenses into a Word document, which was good enough. It was helpful to assess my financial situation on a nightly basis, reminding me of what little I had and what I ought not to be wasting my money on.
For those like me who fail to secure fellowships in their college programs, working part-time is key to staying out of debt. I worked 20 hours a week as a tutor at a nearby elementary school, performed $20-an-hour brain studies with Duke's neuroscience department once a week (in which I had my brain scanned in an MRI), and worked during summers as a park ranger in Alaska.

Ultimately, I didn't need to make all of these sacrifices. I could have just taken out loans.

But before I enrolled in grad school, I'd decided not to. I knew that if I allowed myself access to easy money I'd again fall victim to the consumerist trap: I'd be indiscreet with my money; I'd begin to pay for and rely on things I thought I needed but really didn't; I'd lose perspective.

Most people think they have to work 40 hours a week for 50 weeks a year to get by. But we often confuse "getting by" with spending our money on wasteful things: $100 dates, obscenely obese vehicles, oversize homes.

When you set up boundaries for yourself, the financial and personal gains are very real. I lived on $103 a week in comfort, was never hungry, exercised every day, and never before had felt so free or slept so soundly.


Ken Ilgunas is the author of Walden on Wheels -- a self-deprecating travel memoir about his two-and-a-half-year journey to pay off his enormous student debt load. It's also about frugality, wilderness, the liberal arts, and living in a creepy red van.
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