Budget: So You Think You Can’t Afford to Travel?

7 Comments

Has travelling the world always appealled to you? Obviously, it is one of our driving forces – how else can you explain us living in 300 square feet, hopping from island to island? 

The kicker is to figure out a balance between incoming and outgoing money in order to make it happen. We are not wealthy. We do not have wealthy families. Work and planning were critical to us pulling this off. Trust me – this started long before we set sail in October 2016. We learned the differences in our needs and wants. We got out of the Keeping Up With the Joneses game of buying more/bigger/better. We quit caring what people thought of our clothes and our cars. Priorities shifted and we figured out just how little we truly need to live. And guess what?! We are so much happier with less!

In preparation for my upcoming series sharing our monthly budget, I thought first I should explain what I consider and include in our own personal “budget”. For tracking and sharing purposes I am only counting true living expenses and general boat maintenance. (Althought I do note major purchases each month, if we have any) Why? Because one of the steps we took to be able to afford this lifestyle was to divvy up the money. 

Categories of Money

We have two basic methods to pay for things. A. Rental Income (aka Passive – ish Income) and B. Savings (aka a finite amount of cashola holed up in various types of accounts). Some people choose to travel by saving up and then living off of that savings. That sounds great for a year or two, but then we would be guaranteed to need to return to work. While we may choose to work as time goes by, it is not our end goal. And while the passive income is great, we have to be smart with it – meaning  we can only use a set portion to live on, while retaining a chunk for house repairs, taxes and a property manager. 

Passive Income

This took us a few years to set up. We took advantage of the housing crash and bought inexpensive (ugly) homes and made them pretty again. We then rented them out. Because of the low purchase price – and due to selling some homes along the way, both of our rentals are paid for. Restraint is required here. Theoretically you have all that rent money to live off of, right? No. As briefly mentioned earlier, there are expenses to contend with. Insurance, property manager, repairs, general maintenance etc, etc, etc. Our rent also covers our boat payment. (Yes, we have one of those. At least for now.)

Savings

This account is how we pay for big ticket items. All that new solar, new battery charger and brand new dinghy engine would have equaled months of living expenses. We could have scrimped by and managed to save enough to make those purchases. I am cheap enough  (frugal?) to get us through and figure it out. But we are in the Bahamas and want to enjoy the experience. So we dug into the savings and got our girl set up for comfortable (to us at least) cruising. But because we had to dip into savings, we really analyzed each purchase and made sure we felt it was the right way to spend our savings.

What IS Included in the Budget?

So if I don’t include the boat payment and major purchases, what DO I include? Food, diesel, gas, propane, eating and drinking out, dog stuff, clothes, cell phone/data, toys, land adventures, mooring balls and marinas,and general boat maintenance such as oil changes, watermaker filters, zinc anodes, etc. Pretty much every bit of boat related money we spend other than boat payment and insurance – now that the upgrades are finished. Why don’t I include those? Because they are so variable to you – the person I am tracking this information for. You may or may not have a boat payment, and you may or may not have boat insurance. And if you have either, the costs vary wildly.

Why Am I Sharing Our Budget?

 As variable as cost of living is, I found it incredibly helpful the few times I was able to find other bloggers sharing their budget. Sure, they may spend more or less. But by seeing exactly how much they were spending and on what, I was able to see that this lifestyle is absolutely achievable with a few adjustments for our personal lifestyle. 

So each month, as I share what we spend to live on our boat (currently in the Bahamas!) keep in mind that you may need to tweak it to fit your needs. But please – also take it as a sign that YOU can get out in the world and live the life you have been dreaming of. I mean really – if two people and 2 dogs can live comfortably for US$1000 per month, can’t you?  

*I realize this post in no way encompasses all that we have done in order to reach our goal of living on $1000/month. I will continue to share info in upcoming posts, but if you have a specific question, feel free to ask in the comments below. Then everyone can benefit from the answers! 

7 Comments
  • Ellen @ The Cynical Sailor

    Reply

    Nice intro to how you report and manage your budget. Looking forward to seeing your monthly reports.

    • Jennifer

      Thanks Ellen! Hoping to do a monthly post on how things went the previous month. If I can pull myself away from snorkelling long enough…

  • Mark and Cindy - sv Cream Puff

    Reply

    A really good source for a budget is from our friends Bill and Judy aboard BeBe. They just completed a 10 year circumnavigation and kept track of every penny spent. One of the big questions we had before starting out on our boat was how much was this going to cost us. We have since learned that every budget is different and there is no real answer to this. There are so many variables such as the age and size boat it is impossible to pinpoint a number. We used BeBe’s budget when planning our adventure. And like you, we saved and saved to get here.

    Here a link to their site: http://svbebe.blogspot.com/p/costs.html

    Mark and Cindy
    sv Cream Puff

    • Jennifer

      Ooh, I will check them out, Cream Puff!

  • Rob

    Reply

    It’s refreshing to see a sustainable budget that’s more inline with my lifestyle. I’ve read many, many ‘Cost of cruising’ blogs, and the average income seems to warrant 60,000.00 USD! It started to get a bit depressing being inundated with such figures. Thank you very much for sharing this important (and private) information; it provides great support.

    Rob
    S/V Nettypatch (but soon to change)

    • Jennifer

      Thanks, Rob – stay tuned! I am going to start publishing the months costs one of these days.

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