Budgeting and living aboard

[Living the Dream]

We're getting ready to live aboard and are wondering about budgeting. We haven't found any current information( everything is a couple years old) on budgeting and wanted imput from those who are currently living aboard or have lived aboard in the recent past. We are also looking for imput on insurance. Do you keep it or let it go? Medical and boat.

If you do live aboard and are willing to be specific about your budget, that would be great.

Please let us know which category you fall into:
1) No budget- we just go with the flow and when the money is gone, it's gone.
2) From $0.00 - $1,000.00 a month
3) From $1,001.00 - $1,500.00 a month
4) From $1,501.00 and up a month

Thanks for the help. We'll compile and let everyone know what the outcome is.

Living the Dream

[Strygaldwir]

Living aboard. Hmmmm.... Everyone vacilates on this. Ask yourself this question. How much does it take to live on land? I had a friend who said he could no live on $25,000 a month!

We have been living on about $1800 a month for the last six months. That does not include insurances, we paid those as a lump sum for 6 months to a year depending on the insurance. That does include some rather heavy driving to move things from North Carolina down to Florida. It also includes eating out a couple of times a week. Slip fees are also included. They run about $700 for our boat here in Hollywood, Florida. It does not include any boat maintenance or equipment cost. It does include all the entertainment cost. One of the amazing things we have found, is it can be cheaper to eat out than buy ingredients and make our own meals. That was a surprise.

I think the key to know is you can maintain the same lifestyle you have on land, if you choose to. You can go way more expensive on water if you want to. You can also go significantly less expensively. I don't really have experience anchoring out down here in Florida, but that's a possiblity. I know slip fees for our boat up in Newbern N.C would be about $350. Gas is also cheaper in N.C. So, it also depends on where you want to live!!

We still have all our insurances, cars, health, and boat.


Keith

[Alan Wheeler]

It's almost one of those "how long is a piece of string" questions. It is also the most commonly asked question, followed closely those that have listed a budget somewhere. I at first keenly viewed budgets and every single one would have things in it I would wonder why on earth, and then things I would consider important to me, not included. So what I am trying to say here, is it becomes rather personal to how you and family/crew live and travel. The fixed costs are Birthage/mooring. That cost varies from place to place. Anodes/antifoul and haulout is another, but frequency also depends and changes from place to place. There is always wear and tear. But just when you choose to do a compleate paint, or new sail wardrobe or rigging, depends also on many factors. You could get away with little ongoing cost for sometime, and then get hit hard by something major. As to what and when is like winning Lotto, the only sure bet being, something expensive will fail eventually.
Food varies around the world. Some places it is expensive and some it is dirt cheap. Fuel varies from port to port all over the world. It goes on and on.
I would suggest you look up some cruising couples presently of voyage. There are dozens of them. Look at their personall websites. They pretty much all have budgets of their voyage.

[John Drake]

I think you can get a fairly accurate fix on this yourself by making out a budget. Account for your living expenses in three catagories: Fixed expenses, variable expenses and personal expenses.

Fixed expenses are those cost that you know you will incur and will not change. They might be once yearly, or monthly. Items that fall into this category would be: Boat&car insurance, health insurance, communication (cell phone, internet fees), any loans (mortg, boat, car) and storage fees if any for stuff left behind. You probably know these costs very accurately as they don't change when you are cruising.

Variable costs are really where you can adjust your funds requirements while cruising and indeed, the cruising lifestyle makes this possible. These costs include: dockage, maintenance and fees. If you are flush with cash...you can stay in marina's or on moorings more often. If not, you anchor more often. Some maintenance can be deferred, some not. And if you know you will be sailing to specific countries, you should know the fees they charge (ie, Bahama's $300 entry fee). Now....this is where you will have to make some guesses as to these costs. Take dockage....figure out what the average transient slip fee for your boat would be (likely it depends on your LOA) and then multiply by some number of stays). Same with maintenance. If you have a boat and have spent the past 3 yrs refitting it and fixing her up...you might assume lower maintenance. If you are going to buy a boat just before you are going cruising and it is more than 15-20yrs old....figure in a sound maintenance cost.

Finally, personal items. This category includes: FOOD, dininig out, booze, T shirts and gifts and ...importantly don't forget entertainment. Again, this is a fairly cost variable funding line. You probably can estimate food pretty accurately. Along with booze. After that, you will have to think about and talk with each other regarding just what you want to budget for dining out etc. You can very likely estimate those line items pretty closely...but here is the key....if you are going to stick with a limited monthly cruising cost you are going to have to stick to that budget estimate. Be prepared to do so or suffer the consequences.

OK, now, pull up Excel and put the above line items in one colume. Then put your estimated costs in another. Calculate your annual basis and bingo...budget. Divide by 12 and you get an estimated monthly budget. My guess is two things: 1) the bottom line will surprise you and 2) if you are smart and conservative, you will be able to spend less than that bottom line.

A couple notes. Keep in mind this is your monthly or yearly SPEND PLAN. It is NOT your income. Remember taxes. Your available cash reserve will be whatever your NET income is. Your net is your after tax income or possibly, also after you deduct some % of return on investment that you will in turn reinvest. It is not a good idea to take 100% of the interest out all the time. Need to plan for the future and keep some cash in reserve.

That brings us to another item. Cash held in reserve. You should plan on some amount ready but not in your spend plan. This is your emergency fund for emergency plane tix home, repairs due to a major mishap, illness etc.

So, be completely candid with yourself. Account honestly for health insurance, boat insurance (and ask your insurance company what it is going to cost you to cruise where you want to...it is more than you think) and little fees that add up like cell phone and internet and storage. Many people that say they are cruising on $1000/ month leave these extra costs out of the equation. But...unless someone else is going to pay that bill for you... you better account for the money.



And certainly...there may be many items I have forgotten to mention or items that relate to you specifically I cannot anticipate. Include them.

Hope this helps. My best to all.

John
s/v Invictus

[John Drake]

I have a couple more pieces of advice if you are interested. I do hope this is helpful.

One point is that if you have some time to work on the boat before going...while you still have an income, you can replace many or all of the items you know have a limited service life. This saves you from some unexpected repair expenses while cruising. These items might be: canvas, dink and motor, batteries, running rigging, anchor, sails, older electronics, cartography and charts and possibly even the head (or do a rebuild). All of the above are items that will eventually wear out and need replacement. Batteries are a definate. They may not last as long as you would like.

Another point would be your budget and accounting. It is very easy to get way out of your budget by not keeping a close accounting of the cash you spend every day. If you say your annual budget is $12k, then your monthly is $1000 and weekly $250. That is fine, except that there are items in your annual budget that are for fixed costs or once or twice annual expenses and so not included in your weekly cash alocation.

You might try this: set aside your fixed costs and estimated variable (boat) costs. Then calculate your personal costs and reduce THAT to your weekly budget. Much easier to track and stick with.

Finally, if at all possible, save 1 yrs cruising expenses in advance. Put this money in a savings/checking account and build a spreadsheet to account for it. Alocated the fixed costs, variable costs and personal costs into separate funds lines. Subtract monies spent for any of these as you go. That way, you know exactly where you are in your budget and what you have left. Doing this also allows you to keep your investments untouched for a year and growing. THAT way you know exactly how much you have to spend for NEXT years cruising. Take only a portion of the interest, pay the tax, leave the rest for reinvestment.

Now, the above is just my personal opinion. I am not a professional accountant or financial planner. This is simply one suggestion. I am sure there are many other ways of doing this and many other, probably better, suggestions.

Hope this helps

John

[Euro Cruiser]

LTD, John and the Group:

Reading John's posts is always enjoyable for me because they are thoughtful and include the forest as well as the trees. I would endorse much of his comment, and also would supplement them with these points:

1. First, you don't mention "cruising" but only moving aboard and living on a boat. That leads me to picture a fairly stationary and therefore far easier-to-predict lifestyle (and therefore budget). Perhaps you'd best clarify this if you *meant* to refer to cruising while living aboard, as knowing where you plan to cruise will shape the replies somewhat, perhaps a lot. (Coastal and Caribbean cruising can be relatively inexpensive; prepping a boat for an ocean crossing can be very expensive; living off U.S. dollars, if that's true of you, in a foreign world is right now extremely expensive). OTOH if you live near/on the coast and simply want to move to a boat while other aspects of your life remain unchanged, your current budget (you do have one, right...?) would be affected only by the liveaboard changes: storage costs, slip fees (usually higher for liveaboards) and such.
2. Let's assume for the moment you meant living aboard AND cruising. I know this will sound painful, but I'd encourage you to consider it. We've been out cruising now for five years, we did not have high-paying vocations and we did both retire at 55, and we've been dealing with a very weak dollar the last two years while cruising in (simply a more expensive and also a Euro currency-based) Europe. The only way we've been able to do this, given all the above, is by working hard at a budget for some years *before* cruising began, and then tracking spending vs. budget religiously. What I'm suggesting is that we started with a firm view of our financial picture (not something we arrived at simply by doing a one-time Excel spreadsheet, altho' that is the tool we've used) and we (here's the painful part...) track every penny/pence/cent spent, every day, post all spending monthly into an Excel worksheet that's laid out very much as John describes above, then evaluate our budget allocations vs. our actual spending, and then reshape the budget accordingly. The process never ends and the budget, which we work hard to honor, is a living/breathing thing that's forever a process and never a destination. I suppose another way to summarize this point is that you need to start with a firm view of your existing budget, monitor and spend according to your best guess on what will change, and then revisit and reformulate your budget as the 'real' costs evolve over time. (The budget we are working to this month BTW is w-a-y different than the budget we used three years ago when in the Caribbean).
3. There is a huge relationship between the boat you select (its size and how it is equipped) and the ongoing budget you will be forced to live with. John touches on this and, unfortunately, you fail to give us much info on whether you already have a boat (do you have a feel for the costs to maintain & use her?), whether you plan to keep this boat when living aboard OR whether you will be starting with a somewhat unknown boat. Here's a suggestion: pick up a copy of Beth Leonard's first book, Voyagers Handbook, and read the section that address boat selection, budgeting and the larger picture on your overall financial position and how cruising (or living aboard) fits into it. I don't know of anyone who's done a better job at this than Beth and one of the best attributes of her writing is that they seem to resonate equally with both men and women.

Re: insurance, our advice is fairly directive: Start out (when skills are low and the unknown factor high) insured, by which I refer to the boat, personal effects left back at home in storage, and health insurance. Give yourselves some time to sort out how you feel about being covered, and then adjust accordingly (if at all). It's far easier to cancel coveage OR to move from one policy to another than to recreate coverage, especially if you subsequently are cruising, transient and perhaps not even in your home country.

Filling us in on more of your own thinking & circumstances would go a long way to making this thread useful to you.

Jack
WHOOSH, lying Plymouth, England

[jimbim]

I was definitely in 2 (a lot under $1,000) when I lived aboard here, but I had people all around me, paying the same for berth space, but some living on less, some living on much, much more. That's the way it is. I'm back on land for a year or so, but hope to move aboard again after that.

Are you living aboard where you live now or are you going somewhere? It's important to your costs. If going, investigate who does what where, their repulation and how much it costs. For instance, if coming to Phuket, leave any woodwork in the cabin until you get here -- where it's cheap and good even if you have to watch them very closely to make sure you are on the same page.

Where I am, I can insure my boat for about $700 a year, but many of the people I meet and share space with are foreign cruisers and almost none of them have insurance because the cost is prohibitive.

Most have medical insurance of some kind. I didn't. And that turned out to be one of the worst choices of my life (and is why I'm ashore working diligently to pay the bills).

[Otis B]

Anyone out there who is currently living aboard and cruising I would be interested to know (a range is fine) of what a person looking to cruise permanently could incur. Not a high-life lifestyle but comfortable 46 foot boat anchoring in most harbors beginning cruise with Central America. Any input would be helpful as there really is nothing published recently that covers this. In 2000 (the most recent numbers I have been able to access) seemed to be in the 1500 to1800 US$ range. Is this still possible?