The number one question I get asked is “How much does it cost to go cruising and live aboard full time?” The answer is very much along the lines of “how long is a piece of string” because there are so many variables to consider. How often do I like to eat out? Do I drink alcohol only on board or do I go to the bar ashore and be social? Is my boat new and well maintained or does she need a bit of an upgrade and some tender loving maintenance? Do I live in a marina 24/7/365 or do I get out and about?

These are only a few of life's questions that dramatically change the equation. I suppose the only answer I can give you is to share my experience on how much it costs me to live this lifestyle.

I’m not a financial advisor and this article should not be treated as financial advice. This is my own opinion and a rough guide to how I think about money, cruising and life in general. This article also assumes you already have a boat and you own it outright. So, let’s dive in.

First and foremost, how do you define "success"? How do I know if I’m meeting my financial and lifestyle goals? For me, there is only one real measure and that is:

"Real wealth is discretionary time."

If I’ve got that, plus food and a warm safe bed, pretty much the rest will follow. So here’s how I do it.

Step 1. Eliminate debt – all debt, any debt.

To be truly free, in my opinion you can’t have any debt whatsoever. Debt needs to be serviced, and servicing debt means your precious income is diverted away from what you’d rather be doing with your money and time. So if you have credit cards, pay them off and cancel them so you’re not paying annual fees. If you have any other debt, work to pay it off and then go cruising. I've lived my whole life without a credit card. I don't use BNPL services. I buy what I can afford, and if I really want it, I'll save for it.

Step 2. Live by the rule “a dollar I don’t spend is a dollar I don’t have to earn.”

Be really choosy about how much you spend, and what you spend it on. I expand on this in Step 4. Equally important to this equation is your income. You have to have an income that supports your aspirations and spending, and then some.

Step 3: Your income needs to exceed your budgeted outgoings by no less than 40%.

So, for example, if you budget all up for $25,000 of living expenses annually, your income realistically needs to be $35,000 AFTER TAX (40% of $25,000 is $10,000). And of that $10,000 you need to be reinvesting half (50%) of that each year to keep pace with headline inflation and the true cost of living as you age. Budget for everything.

Step 4. Draw up a list of “needs” verses “wants.”

Being choosy means identifying what is discretionary, and what you absolutely can’t do without or get away from. It’s a “need” verses “want” scenario. I talk about this a little more in Step 8. But for now, draw up a list. Here’s mine.

So as you can see I have a few things from which I can’t get away. I still own my shore side house so it needs to be insured. I have a car and that has costs that can’t be dodged. The boat and general living costs can’t be fudged. And I love my food, so eating well is a big non-discretionary item.

On the other side of the ledger are things that are nice, but not essential. Alcohol, new clothes, gym memberships, yoga classes, trips to the cinema, music and online subscriptions (like Netflix) are on the list. The point here is not to live a spend-thrift life. The point is to actively choose what is really important to you and your lifestyle. So if a new Star Trek movie hits the cinema, we go and see it. But do we go to the cinema every month? No.

I often do my laundry in a bucket and hang it out to dry in the sun. Doing so saves me $10 a week, and over the course of a year, that’s $520. Remember, for every dollar I don’t spend that’s a dollar I don’t have to earn. I don't buy take-away coffee for the same reason.

Another really huge discretionary item is eating out. So in the next step, let’s get realistic about how much you intend to spend.

Step 5: Set a realistic budget line-by-line

Here's is my budget, line by line as an example. You'll note they are all round figures. Be realistic and set these amounts based on past-expenditure and future plans. I use a spreadsheet to lay it out and then play with the figures based on my income, and how much the annual spend gives me per week on each item.

Step 7: Track your real spending daily

It’s all very well and good to set budgets but if you don’t adhere to them, they are useless. Having said that, a budget is a tool, not a noose around your neck. If you overspend in one category, you simply take the over-run from another, as I do in Step 9. The goal is to know how much money you are earning, and where you are spending it. I track everything daily and use software to track and analyse budget items against actual spending. If I need to make changes, I do.

Step 8. Never deny your boat the maintenance it needs.

In setting a budget for this category my advice is to keep it real and add 10% per annum to the bottom line. Factor in once-in-a-decade costs like having to replace standing rigging. If you set aside the money year in, year out, when it comes to doing these big jobs the money is already there.

Step 9. Take a long hard look at your list. Are there things you can do without, or less of?

This is where it gets hard. We’ve been conditioned to “consume” as much of everything as we can to feel happy and contented. Just dwell on the idea of “retail therapy” for a moment. Humm, it feels good for that moment, but invariably we’re left with wanting more to feel “happy.” It’s a never ending cycle, and marketing people just love to create new “wants.” That’s why one-thing-on, one-thing-off is also a helpful strategy.

So here’s a little secret I’ll share with you. I apportion $2000 of alcohol annually to the budget. If something happens and the boat needs more money, I stop drinking. Yep, the wine is off the table until the budget is back in balance. Do I need wine. No. Do I want wine – generally yes. So need versus want helps make the choice clear. Forgoing wine for boat maintenance has two immediate and tangible effects. Firstly, I sleep better and loose weight. Secondly, the money I would have consumed for momentary pleasure is sequestered into a long-term benefit by having the boat well maintained. I get a safe, warm dry bed and get to go stress-free sailing knowing the boat is more than likely not going to break down. I know it sounds crazy, but it’s really an effective way of keeping things on track.

Step 10. Enjoy what you have achieved.

The point isn't to have the most. It's to have what you need for your purposes. Things change in life, and your budget should too. I review our budget annually, and make changes depending on income fluctuations, wants and needs. If you have a plan there’s a better chance you’ll end up where you wanted to be - and if you're like me, that's on a boat sailing.

So, the real cost of cruising lies in your choices.

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