On the first night I tried to sleep in my van, I was lying in my sleeping bag sprawled out on the back seat, parked in a mostly empty Wal-Mart 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 Wal-Mart 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, a camera, a cell phone, 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.

A nation of potential van dwellers
I'm not the only student in America struggling with the high cost of education.

Currently, there are more than 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:

OK, so maybe you're not living in a van, but are you part of the 99%? The Motley Fool's new free report highlights three less-than-luxurious stocks the 1% may be overlooking. Just click here to read it now. It could be the best financial decision you've ever made.

The article Living in a Van Was the Best Financial Decision I Ever Made originally appeared on Fool.com.

Fool contributor 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.The Motley Fool recommends and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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