Where’s the money?

Cruising is a commitment that goes far beyond taking a sabbatical from work. Since setting out on this path, our lives have changed quite dramatically. At base, we are talking about giving up our jobs, selling or renting out our home, selling or storing all of our posessions, and heading out to sea with no visible means of support.

In the meantime, we found that all other hobbies and interests had to take a back seat. When we weren’t actively sailing or working on the boat, then we were reading about boats or researching techniques or equipment. Free time became compressed, and ever more precious. We began to wonder if we were becoming sailing bores, and tried to deliberately refrain from talking about it in company.

Our first plan had been to circumnavigate the globe, but after a while we thought that this might be a little ambitious for a couple of complete beginners, so we decided to take it slowly and stick to our own back yard. The trade winds and the cyclone season pretty much determined our start and end points, so it was clear that we would be setting off from Australia in a February and returning in a November. All we had to do was to choose the year, so we had chosen a date three years in the future to give ourselves time to prepare. That date was now fast approaching.

We also had to completely rethink the way that we lived. There is a common stereotype in the cruising world; the guy building a yacht in his back yard while his wife shakes her head and occasionally calls him in for dinner. There is a reason why those yachts almost never go to sea; outfitting a cruising yacht is not a part-time activity, and unless you’re planning to go single-handed, both partners must be 100% involved.

Money was obviously much on our minds. We were both children of the easy credit era, and, like everybody else of our generation, grew up thinking nothing of racking up huge credit card bills and loans, as long as we could manage the monthly repayments. In common with most other people, our financial planning involved redistributing debt across different providers, taking advantage of interest-free periods and repayment holidays, always chasing the holy grail where monthly outgoings exactly matched monthly income.

We started to think about compound interest and did the math. We were flabbergasted at just how much money we were spending in interest payments; usually two or three hundred percent of the original loan amount. Mortgages, because of their extended time line, were particularly crazy. We realised that if we were going to save anything for our retirement, let alone go cruising, then we had first to get rid of all that debt so that we could make compound interest work for us, rather than against.

We started to juggle in earnest. We took out short-term flexible loans in order to pay off our long-term loans. We tightened our belts, reduced our evenings out to once a week instead of every night, and used the savings to make regular lump sum payments on all our loans, far over and above the minimum repayments. We built spreadsheets and set milestones, and celebrated (cheaply) as we hit each one.

When we originally started to talk about our adventure, we were living inland, three hours from the nearest anchorage. Once we bought Pindimara, she was moored over four hours away. This was barely practical for weekend sailing, and impossible if we wanted to do any work on her, so we moved jobs and cities to be closer.

As the years went by, we moved out of our expensive rented waterfront accommodation and purchased a cheaper flat in a depressed area (with a good future, though. We’re confident that that investment will pay off in a few years); we sold the car (who needs a car in the city? And its amazing how much sailing gear you can carry on a motorcycle); tore up most of our credit cards (keeping only the fee-free ones that we’ll need for cruising); and finally succeeded in paying off much of our debt.

We were, however, still continually nipping off for a quick holiday or popping down to the restaurant on the plastic. Most of that stopped in year three. We wouldn’t be earning any more money while at sea, so every cent that had to go in debt repayment, was a cent out of our cruising budget.

At the beginning of the third and final year of preparation, we drew up a list of our assets and remaining debt, and a short list of things that we still needed to buy. Not surprisingly, this included all the larger ticket items that we had been saving up for; among other things, the water maker, the HF radio, generator, solar panels, lifeboat, cruising chute. There was something of a gap between the amount of money that we had available, and the amount that we needed. In order to make up the shortfall, we trimmed things down even more. We put our expensive (monthly loan repayment) vehicles up for sale, and bought an old truck for cash. We sold or stored a load of our possessions, rented out the flat, and moved full time to the boat.