Sailing Budget: What Sailing Expense Categories You May Want

One of the most significant unknowns before we decided to stop working and live full time on our sailboat while cruising was what sailing expense categories we would need to set up our sailing budget. The first thing we did was develop a sailing budget that we thought we could live within, which would also support us for the long term. This article describes how we developed our budget for liveaboard cruising and the categories we included for our budget tracking.

Sailing Budget

The Budget! We anticipate that cruising from Mobile, AL down the west coast of Florida, around to the Bahamas, up the east coast to the Chesapeake Bay, and who knows where from there, we will find ample opportunities to spend money! Particularly on creature comforts such as marinas and eating out at restaurants. However, that often contradicts the realities of one’s budget so we wanted to first explain how we developed our own budget for this lifestyle.

Please understand that we are not accounting or investing types, we simply worked fulltime, non-financial jobs and saved as much money as we could before we departed. So, our starting point only includes our savings and investments that we had been trying to build up for several years before setting out. We actually started saving for this lifestyle six years before we took off, as we talked about in our 6-Year Plan article.

Assumptions in our Sailing Budget

We did not have any real estate or other assets to consider so it was fairly straightforward. However, we still had to make some important assumptions. In order to create our budget, we simply took the value of our savings and investments, assumed a long-term annual rate of return for earnings on that money, and then subtracted an annual amount of expenses for living on and maintaining our boat. The annual rate of return on savings and investments is a critical piece of this puzzle and we elected to choose what we believe to be a realistic and relatively conservative value of 3% annually.

It is pretty simple math to see how your money will grow over time at an assumed interest rate, so we plugged our assumed interest rate of 3% into a retirement accounting spreadsheet we created. Next, we applied an assumed annual value of expenses (i.e., our budget) and subtracted that value from the earnings from our savings and investments each year. We ran that out far enough to make sure we still had some money in the kitty by the time we get too old for this lifestyle.

Sailing Expense Categories

It did take some work to look at the total budget value for the year that we came up with based on this analysis to break it down into actual expense categories. We looked at where we could save money for our new boat life. I have been tracking our spending while we were still working for several years. I did this to get an idea of where we were spending our money so I could make an educated guess on expense categories and how much of our budget would go towards each category. 

The expense categories we use for our sailing budget include:

1. Boat Expenses – This includes everything from:
   • Boat maintenance costs,
   • Repair costs,
   • Spare parts,
   • Safety equipment
     • Garmin Inreach
     • Life jackets
     • Fire extinguishers
     • EPIRB
   • Boat Insurance
   • Costs associated with boat documentation and registration
     • USCG documentation
     • FL state registration
     • FCC certification
2. Fuel – This includes:
   • Diesel fuel for the main engine and generator,
   • Gasoline for the dinghy, and
   • Propane for the oven and grill
3. Marinas & Moorings – Whether we stayed at a marina, or on a mooring ball, the marina and mooring fee costs when into this category.
4. Groceries & Restaurants – All expenses associated with eating and drinking go into this category. This includes our routine trips to the grocery store, liquor store, eating out at restaurants, or the ice cream shop.
5. Internet & Cell Phones – This includes both Scott and my cell phone plans through T-Mobile as well as our T-Mobile home internet. We are looking into getting Starlink, which will fall under this category as well.
6. Healthcare & Medical – As I discussed in the health insurance article here, Scott has his healthcare through the VA, which is no additional cost, and I have my healthcare through Medi-Share. This category will cover the monthly cost of Medi-Share, along with any health or medical related costs, such as prescription and over-the-counter drugs, doctor’s appointments, etc. Also covered in this category are costs associated with life insurance and personal care, such as haircuts.
7. Travel – This category is for anything travel related such as Ubers, car, bike and golf cart rentals, airplane tickets, and costs associated with entry into the Bahamas.

8. Pet Care – Anything Mangaux-related goes into this category. This includes vet visits, dog food and treats, and the fees associated with bringing a dog into the Bahamas. You can read more about those costs here.

9. Laundry – We do not have a washing machine onboard, so we find laundromats to do our laundry. Often times, when we are at marinas, they will have washers and dryers to use. I do separate out this cost into its own laundry category.
10. Mail & Packages – There is a cost associated with the mail forwarding service, Saint Brendan’s Isle that we use.  I discuss more about the costs associated with this in an article written about Setting Up Florida Residency. This category is for those costs along with mailing packages to family and friends.
11. Clothing, Gifts, Entertainment & Hobbies – Our last category is a bit of a catch all. It covers everything else such as clothing, gifts for our family and friends, entertainment, and hobbies. That includes museum tours, books and music purchased online, and any expenses associated with this blog.

Taxes and Social Security

These are two important things that we frankly did not consider in our sailing budget yet.  They are (1) paying taxes and (2) getting paid social security. Our income is obviously significantly reduced, but we are sure there will be some tax consequences on our investments. We just really don’t know exactly what that will be yet as this is our first year out cruising and not working. However, on the flip side we have assumed that social security will go belly up and we will not receive a dime from the government on that front. Again, that would be a very bad situation, but we are being ultra conservative with our assumptions.

So, this is an explanation of how we developed our sailing budget. Everyone’s budget will look different because everyone has a different starting point as well as what they expect to spend while out on the water.

We are currently taking a deep dive look at how we did sailing on a budget for the first six months of liveaboard cruising. We will post are findings in next week’s article. Let us know if you have any questions about any of our budget categories.

Live your dreams,