SimplySailingOnline.com shows by example how easily you can eliminate stress, become more independent, raise your children in a safer environment (while spending more time with them, instilling values not based on the mighty dollar) and avoid the traps of commercialism. Because we live and sail simply, we have been wandering for 11 years with no intention of stopping. This is not a trip for us; it is our life, and I hope to share our success with stories of laughter and tears, as well as how-to tips and DIY projects for preparing, sailing and making a boat a home, so that others can join us.

Sail Your Way out of Debt

September 7, 2015

Our parents said we were being financially irresponsible. When we dropped the dock lines and sailed away from our land based lives, we took with us $60,000 in debt. Conservative friends tried to convince us to wait: continue our careers a few more years until we could pay off our debt, build up equity in our house, save a comfortable nest egg, maybe even until we could retire and be guaranteed a regular, albeit small, income. But we knew how that game would play out. We had tried to live "responsibly." That's why we were in debt. If we had not gotten out of the mortgage when we did, we would have built an addition. May as well build that deck while we're doing it. And a fence would be nice. We would have had to replace Dave's truck before long. By then, repairing the roof on the house would have eaten up any savings we may have still had. Being "responsible" requires money: another car loan, higher insurance, a second mortgage, more debt.


Leaving our "normal" lives

Instead, we sold the money pits (house and two cars), gave up the careers that demanded our energy and supported nothing but our "responsible" habits, and took our debt for a sail. Spoiler alert: 14 years after we dropped those dock lines, we are now debt free. We left our "good," fulltime jobs, sold our equity maker, worked half-assed for part of each year, and now owe no one anything. Interested? Here's how we did it.

I know we're not supposed to talk about money, religion, or politics, but I harbor strong opinions about each of these areas of life. I'll keep my political and religious views to myself (though it's REALLY hard!) and only break the golden rule in order to share our experiences. Too often cruisers dance around the subject of money, rarely betraying any real dollar amounts. I understand the social restrictions that seem to demand this sort of behavior, but I remember CRAVING some real numbers. I wanted to know what people lived on, what they spent their money on, how they earned it, and the philosophies that prevented them from starving when they jumped off that gerbil wheel. For those of you who are now where I was, here are those numbers you crave.


Sailing our way out of debt

We paid $29,000 for Eurisko, financing 90% of it. We still owed $25,000 when we sailed away. We had financed her refit via plastic and owed $25,000 on one credit card and $10,000 on another. They were both maxed out. We sailed away from the dock with $10,000 in the bank and auto-payments arranged to pay our bills (which we'll get to later). The hope was that we could live on that money, while making our payments, long enough to get to the Florida Keys where we planned to spend our first 6-month workstop. It was June, so we didn't feel safe even starting our south-bound journey for four more months. We knew we were cutting it close, but the bilge was stocked with food, and we were optimistic.

To make $10,000 last six months required serious sacrifices. But the boat was newly launched and outfitted, our food stores full, our kids too ready for adventure to really care that we were eating beans and rice. Again. Our monthly budget was $1500. Our bills included $300 boat payment, $500 credit card payment for one card, $200 for the other. Which left us $500 a month to live on.

Generally speaking, you cannot count on your first year's budget being typical of your cruising life. Because you've already invested the money in stores, outfitting, bottom paint, sails, etc., you can live for much less the first few months or even year. But after that, your expenses will increase as you have to replenish the food, you want to go out to eat for a treat, staying at a marina one night becomes the safest course of action, and things begin to break. We have never been able to replicate our expenditures that first six months of cruising. But by living so cheaply for a short time, we were set up for real financial success.

We got to the Keys flat broke, but found work immediately. Our goal has always been for each of us to make one month's budget each month. We live on one income, save the other. This means that for each month we work, we gain a "free" month. In 13 years of traveling, we've never failed at this goal. So after working for six months, we had six more months of cruising in the kitty. The trick came when our credit card minimum payments began to decrease. Instead of lowering our monthly payments, we kept them where we had originally set them. (This was not initially because we're such great financial planners. At that time, the amount that was deducted could not be changed online or even on the phone. A paper had to be mailed to us, follow us to wherever we happened to be that month, we signed it, had it notarized, and mailed it back. So it was easier to just not change the payment amount.) By paying more than the minimum, we brought down the principle more quickly. By the time our boat loan was paid off (after 9 years of cruising), we were less than $10,000 in debt. We applied the boat payment to the credit cards, consolidated our credit card balances for a low interest rate and BANG, debt free and own our own home by 42. Could we have done that while living on land? Maybe someone can, but our track record was saying no. (As an interesting side note, our youngest son avoided the trappings of the gerbil wheel completely and now, at 22, he and his family of 3 are debt free and own their own home. Seems it's easier to STAY out of debt than to GET out of debt.)

A few caveats, least those who know us well point out some "irregularities" in my description. Shit happens. Dave worked all summer for a man who never paid him, which really set us back. (Hint: Never work for family.) One summer in Trinidad, the three-week haul out we had budgeted became a three-month blister job. A few years later, Dave required back surgery in Panama, in a "pay before services are rendered" hospital. So we've spent a few months of our lives flat-ass broke. We've lived off our credit cards for a few months when the cruising kitty ran out before the weather allowed us to get back to an island where we could work. And we borrowed money to pay Dave's surgeon. But we have recovered from each of those hardships (and paid back the loan in a year) and are still debt free.

What does our budget look like, now that we aren't making payments to anyone? Surprisingly, the budget hasn't changed. If anything, we have increased it. I call it inflation, but it's really just a life change for us. We CAN live on $1500 a month, but we usually don't. Eurisko is nearly 40 years old. We have been living on her for 14 years. It seems everything we bought before we sailed away now needs replaced or completely overhauled. And we've become what our kids call "health food nuts." We eat well, which is not always cheap. Our food budget is $600 a month (including eating out) and we still don't spend much time at marinas (except when we're near our grandson), so where does the rest of that money go?

We've learned to save more than a little of each month's budget. If a new main sail lasts 10 years and costs $3,000, we have to save $25 each month in order to pay for it. When you add up all the items on a boat that can and will break, it's not hard to get a list that requires several hundred dollars to be put aside each month. We also hope to no longer have to rely on our credit card when the money runs out. Actually, we're hoping that by continuing to live simply, on a relatively small budget while saving a portion of each month's income, the money will never run out. If it does, I'll go back to slinging drinks. Mojito anyone?

MONDAY we'll discuss the dangers of a 5-year plan.

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