Sailing Monthly Budget- Reality & Expectations
When we made the decision to attempt a circumnavigation of the globe with our kids, we had a ton of questions about the financial viability of our plan.
How on earth could we afford to do it?
What would our budget look like?
We spent a lot of time looking at and reading other sailing family's monthly budgets, and trying to get hard costs on as many items as possible to gain a true understanding of the costs involved. As everyone says, costs vary SO much from one family to the next.
To say that it was difficult and frustrating to try to piece together an idea of a budget would be putting it mildly. There are a lot of moving parts to consider, and what each family can financially afford is immeasurably different.
A lot of what we read, gave an outline of $25,000-$35,000 per year.
We would have 4 kids though- aged 6-12; which I know is more than average.
Once we sat down and actually figured out our expected costs, we realized that for us, at least, this was not realistic.
Needs obviously vary based on type of boat and size, cruising expectations, size of the family and more, but here's what we came up with as our expectations for monthly spending as a family of 6.
This budget outline is what we originally came up with prior to setting out (2020).
Once we've actually been out there ourselves for a bit- I will update it with our reality versus our expectations.
Hopefully they aren't too different!
To read about how we saved up for; and where we come up with an income stream to make this dream a reality- check out my blog about saving for cruising!
Fixed Costs- $832 p/m
These are costs that (hopefully!) never change from month to month. I do realize that during the time elapsed from writing this to leaving, some of these may change a bit, but hopefully it will be pretty close to what we've worked out.
$0 p/m payment for our boat
This is obviously a factor that could vary GREATLY. It is very much our hope to be able to pay for the boat in cash, in full and not have to finance any of it. What ultimately happens is anyone's guess! We are trying to keep our monthly costs down as much as we can, so not having a monthly payment for the boat is high on our list of things to try to make happen. What you can afford, how much you can save, and whether or not you are able to buy a boat outright are all factors that will affect whether you have this cost as part of your monthly budget and how much it is. To get an idea of what your boat payment might look like, take a look at the calculators out there. What we found in 2020 was that for $140,000 of financing, we would be paying around $1000 a month for 15 years.
$250 p/m boat insurance
We've been quoted numbers that also vary greatly. Factors that impact boat insurance include sailing experience, part of the world you plan to travel, age of the boat, valuation of the boat and more. The rule of thumb we've heard is 1.5% of the boat value per year. On a $200,000 boat, that's approximately $250 per month.
$284 p/m health insurance
We plan to go through IMG- International Medical Group and chose the plan that offers worldwide coverage including the US with a $5,000 p/y deductible. Depending on what kind of coverage you want you may be able to get that price down considerably.
$150 p/m IrridiumGo
$41 p/m Predict Wind
$107 p/m Homeschooling Costs (Curriculum, Materials Etc.)
Variable Costs- $2000 p/m
These are costs that vary from month to month. We've averaged out our spending to reflect a monthly average. If one month is less we intend to set that money aside to cover a month where costs may increase due to cruising grounds or other factors. What we actually spend when we get out there is a huge unknown, but we're hoping that we aren't too far off the mark with these expectations.
$200 p/m Fuel
$200 p/m Marinas/Moorings etc (We intend to spend the majority of our time on the hook. If you plan on spending a lot of time tied up to the dock you can expect to spend a lot more money in this category.)
$100 p/m Customs/Immigration/Formalities
$300 p/m boat repairs & maintenance
$800 p/m food
$50 p/m Nautical Charts/Navionics
$50 p/m Taxis/Rental Cars
$300 p/m Eating Out/Entertainment/Clothing
Unrelated to Boat Monthly Expenses We Incur- $950 p/m
These are costs that we will incur or that we will try to set aside each month that are unrelated to our boat. We are trying to give a fair representation of our actual, real world costs though; and they are factors that you may need to, or want to consider as well.
$500 p/m towards retirement savings (this would be for true retirement, when we are too elderly to continue the sailing lifestyle)
$250 p/m towards repairs & maintenance on rental property(ies)
$200 p/m banked to take trips home to the states
Monthly Total for all Costs
$3,782/$2,832 without unrelated expenses
$45,384 per year/$33,984 without unrelated expenses
Closing Thoughts
For us, one of the things that cemented the thought that this was truly possible for a normal family, was breaking down these numbers and realizing that we spend far more than this to live on land each year.
Will there be unexpected costs that arise?
I'm sure there will be, but even with this, it seems so much more feasible then we initially thought.
I will say, having some fall back plans are essential, and keeping our costs low so that we can continue to sail for as long as possible is a key part of our plan. We don't want to get out there for a few years only to have to return to land because we couldn't financially stay afloat. I know many people go out there only ever intending a sabbatical; but we would like this to be a permanent lifestyle change if we can swing it.
Keeping this in mind, we have 3 major goals for making this more financially feasible.
Goal #1 is to somehow pay for our boat in full and not incur a monthly payment. This means saving every penny we can, and trying to optimize what we make in the 5 years leading up to leaving. We have a lot of ways we hope to do this, which I'll go over in my saving to set sail blog.
Goal #2 is to have a kitty banked. What that number looks like for you may be totally different, as needs vary from family to family. We settled on an amount (that I won't disclose) that make us feel more comfortable should an emergency arise. Doing this obviously adds substantially to the amount we need to save up in the next few years though. This bank would be intended for catastrophes. With any luck, we won't need to touch it and it can sit and collect interest!
Wishful thinking?
Probably!
Goal #3 is to figure out a way to continue making some sort of income remotely. There are a ton of possibilities that we've looked at and continue to look at. Ideally we won't make all of our income from one avenue- don't want to put all our eggs in a basket so to speak. We feel that our yearly budget is relatively low, which makes this goal reasonable. We definitely want to have that income in place prior to setting sail though, which is why we are trying to get all our ducks in a row now!
Once we actually set sail, I'll update this blog with the realities that we meet.
What do you guys think?
Are these numbers realistic?
Are our goals reasonable?
Will reality meet our expectations?
