Check my Math? Family Cruising Finances

[Interzone]

I've been lurking here for awhile as I begin the early stages of planning a 1-3 year cruise with my family, but this is my first post. First -- thank you all for the shared wisdom so far! I know there are several discussions on budgeting for a cruise, but I'm hoping you'll indulge me in sanity checking my assumptions.

A little about us: My wife and I are mid-40s, and we have two daughters, currently aged 8 and 4. The plan is to go in about two years, when the youngest is old enough to listen and appreciate it and the oldest is still young enough to want to spend that much time with her parents. We would start in Florida and head through the Bahamas and into the Caribbean for Year One. If we all agree to Year Two, we'd decide whether to continue to a) the Med or b) the South Pacific (pre kids, my wife and I chartered cats all over the Caribbean and in Tonga, but have never sailed in the Med. We own a 35-foot monohull).

I see lots of people mention what seem like impossibly low monthly budgets and am wondering if I'm not looking at this right. Of course, I understand there are plenty of variables involved, but for the sake of this exercise, I'd love reactions to these numbers from people who are actually "out there, doing it." The goal is not to live a lavish lifestyle, but to not feel deprived or impoverished, either. We want this to be a once-in-a-lifetime epic adventure for our family, but we are not, alas, wealthy. I guess the goal is to maintain a safe, comfortable, "middle class" lifestyle for our children while stepping outside of traditional US society.

1) The Boat: We're thinking a 38-40 foot production catamaran (Lagoon 380 s2, 39, 400 or the like), owners version. Most likely used: $250K - $500K

2) Boat Insurance: We're from the US, but we'd be in the Bahamas/Caribbean ... is $1000/year approximately what we should expect to budget for insurance? For major crossings (to Med or South Pacific) I'd likely pull in a crew and would purchase supplemental insurance.

3) Health Insurance: I'm a little baffled here, but we want to make sure we are appropriately covered. We've dealt with medical emergencies in the middle of nowhere in the past, and with kids we'd want to make sure we are well covered, including some level of emergency evac insurance: $3000/year

4) Life Insurance: $2000/year

5) Maintenance: Depending on the age of the boat, I guess this can fluctuate, but let's say $30K/year. If we spend more to buy a newer boat, I would assume that the maintenance number could go down, while if we go older/cheaper on the initial purchase, that number will go higher. So -- for a $250K boat, $30K is more than 10%, but on a $400K boat it's less ... but if that's a 1 year old Lagoon 39, maybe it's still the right number?

6) Food for four: $12K/year -- mostly shopping and prepping our own food, but we enjoy going out to fun restaurants maybe 1x/week. Plus we want to socialize at local watering holes, etc!

7) Fuel: $1200/year -- is this enough? I would want to use Solar and wind to reduce generator use as much as possible.

8) Communications: We would need to keep some part-time connection to our "real" business lives, plus our kids would require on-line access for school: $1500/year in some TBD combination of WiFi, cellular, SSB and sat phone charges.

9) Travel: Enjoying some land-based adventures along the way, plus one trip back home/year: $6000

10) Petty Cash: $4000/year

So -- you add all of that up, and you get about $60K/year in expenses, not including the price of the boat, or over $5K/month. Yet on the forums, I've read threads where people comment that $5K/month is the equivalent of top-shelf luxury cruising, while others claim they can live on a mere $500/month. I've seen the number $20K/year thrown about as a reasonable annual cruising budget.

I'm hoping some reactions from the forum will help me understand if my preliminary assumptions are in the ballpark, or if somewhere I'm way out of whack. Any overall reactions to what we're cooking up are also appreciated!

[Vasco]

Originally Posted by Interzone

.


2) Boat Insurance: We're from the US, but we'd be in the Bahamas/Caribbean ... is $1000/year approximately what we should expect to budget for insurance? For major crossings (to Med or South Pacific) I'd likely pull in a crew and would purchase supplemental insurance.

If you can get insurance for a 250K - 500K boat for $1000 (Bahamas/Caribbean) you'll be awful fortunate. I would think, depending on your experience more like $2500 and up.

[Interzone]

Thanks, Rick! I'll make that adjustment to the spreadsheet. Unfortunately, that moved the numbers in the wrong direction. Now I have $1500 less to spend at beach bars .

[Pete7]

They have smaller budgets because they are not insuring everything to the extent you are thinking of.

Interestingly for me insurance is half the price in Europe compared to the Caribbean and that is with Pantaenius UK. For an Atlantic circuit they said they would charge for 6 months European cover and 6 months US which brought the cost down.

They are also not spending $100 a month on fuel, I spend that a year. Also $150 a month on comms, ouch. Wifi and local sim cards are the answer here with Skype.

Adult return flights Europe to US are about £500 each and I am shocked by your quote for life insurance.

If you have never sailed the med then surely that is the destination you should go for. Visit the home of the Olympics. See the Pyramids, buy London Bridge and have tea with the Queen and finally eat Moules in France, or even frogs legs and snails. You should really video the kids reaction to that idea



Pete

[MarkJ]

Originally Posted by Vasco

If you can get insurance for a 250K - 500K boat for $1000 (Bahamas/Caribbean) you'll be awful fortunate. I would think, depending on your experience more like $2500 and up.

UPPPPPPPPPPPPPPPPP!!!!!!!!!!!!!!!


Re where you want to go in year 2. The Pacific is great, but the Mediterranean is the birthplace of human culture. The current wars are about history thousands of years old and you just can't learn about why the world is crap in the Pacific.

The Pacific is wonderful, but once you've done one island...

Kids of that age may really need the history or the real world


Mark

[Interzone]

I agree re: the Med and exposing the kids to culture! That's definitely Plan A. My worry in the Med is 1) my perception is that it's really expensive and 2) that it's really crowded. I'd love to start in Florida late fall, head to the Bahamas and Caribbean, then cross to the Med in late spring so we can avoid hurricane season by spending a long summer in the Med. Or does it make more sense to buy a boat that's in the Med and do that first? While that'd allow us to go the "right way" (Westbound) I guess I'm in the mindset of giving the family some mellow island-hopping time in the Caribbean first to "break them in." So many decisions!

[Interzone]

Thanks, Pete -- I guess that gets at the heart of this. For me, properly insuring an adventure like this will make it feel more "responsible" and less stressful, but I certainly don't want to over insure (especially as it begins to limit our ability to pay for the experience itself!).

I will look into "Atlantic Circuit" insurance -- that seems intriguing. Thanks for that.

[monte]

As we have been cruising the Med for the last couple of years on a lagoon 380 and now a Lagoon 400, I can answer a couple of your questions according to our experience.


1) The Boat: We're thinking a 38-40 foot production catamaran (Lagoon 380 s2, 39, 400 or the like), owners version. Most likely used: $250K - $500K

Thats about right, big price range though. You would need to pinpoint the model and cost.

2) Boat Insurance: We're from the US, but we'd be in the Bahamas/Caribbean ... is $1000/year approximately what we should expect to budget for insurance? For major crossings (to Med or South Pacific) I'd likely pull in a crew and would purchase supplemental insurance.

L400 insurance in USD for 450K cover approximately MED $3000, Atlantic and Caribbean $6500 Pacific and Aus $8000

3) Health Insurance: I'm a little baffled here, but we want to make sure we are appropriately covered. We've dealt with medical emergencies in the middle of nowhere in the past, and with kids we'd want to make sure we are well covered, including some level of emergency evac insurance: $3000/year

That sound feasible, my basic travel insurance for one is around 1000

4) Life Insurance: $2000/year

never had it, I think some comes with the boat policy though

5) Maintenance: Depending on the age of the boat, I guess this can fluctuate, but let's say $30K/year. If we spend more to buy a newer boat, I would assume that the maintenance number could go down, while if we go older/cheaper on the initial purchase, that number will go higher. So -- for a $250K boat, $30K is more than 10%, but on a $400K boat it's less ... but if that's a 1 year old Lagoon 39, maybe it's still the right number?

way too much. maintenance is under 5000/y on a new to 4 yr old boat

6) Food for four: $12K/year -- mostly shopping and prepping our own food, but we enjoy going out to fun restaurants maybe 1x/week. Plus we want to socialize at local watering holes, etc!

probably just enough if you never eat out

7) Fuel: $1200/year -- is this enough? I would want to use Solar and wind to reduce generator use as much as possible.

think $1/mile, motoring 30% of the time in the med, would take you a long way. You could last a year on 2 tanks, one if your not in a hurry. Forget the wind gen and put 1000W solar on a cat. Dont forget the watermaker if you want to be self sufficient.

8) Communications: We would need to keep some part-time connection to our "real" business lives, plus our kids would require on-line access for school: $1500/year in some TBD combination of WiFi, cellular, SSB and sat phone charges.

$10-$20 per gig for cellular data in the med. Depends how much you plan on using.

9) Travel: Enjoying some land-based adventures along the way, plus one trip back home/year: $6000

sounds good

10) Petty Cash: $4000/year

give it to me if its spare

So -- you add all of that up, and you get about $60K/year in expenses, not including the price of the boat, or over $5K/month. Yet on the forums, I've read threads where people comment that $5K/month is the equivalent of top-shelf luxury cruising, while others claim they can live on a mere $500/month. I've seen the number $20K/year thrown about as a reasonable annual cruising budget.

Marinas make a big difference to budgets, at around $80/day they add up fast. So it depends on how self sufficient you can be and how many anchorages are in your cruising destination. Sometimes they cant be avoided. Some parts of Europe have lots of anchorages, some you have to go to a marina. Winter rates are closer to $30/day. We avoid them as much as possible and sometimes go months without going into one, then sometimes we have to for a week or so to do land travel or wait for a weather window to sail to the next destination.

I'm hoping some reactions from the forum will help me understand if my preliminary assumptions are in the ballpark, or if somewhere I'm way out of whack. Any overall reactions to what we're cooking up are also appreciated![/QUOTE]

Expect the best and plan for the worst.

[AndrewB]

Your budget needs to be realistic relative to what you are used to spending, but even so sounds quite generous. If you can afford this much, you'll have a really easy time, but for $45k pa you'd still have a worthwhile experience. I agree with others your maintenance budget for a nearly new boat is high, provided you can do some work yourself.

Travel costs for home visits (including the cost of leaving the boat in a marina) have proved to be our single largest item of expenditure, so how important will these be to you?

[Interzone]

Thanks, Monte! Petty Cash would apply to marinas, so you can't have it. Sounds like I can lower my maintenance and COMM numbers but need to add to the food budget and increase my boat insurance, big time.

Yes, the boat budget is a big spread -- that depends on how well things go between now and then.

[Interzone]

Thanks, Andrew -- yes, I'm trying to dial this in. The goal would be to have an adventure, not just blow through cash (even if I could afford to do that, which I can't). I backpacked through Europe on $20/day when I was young and loved the creative challenge of figuring out how to make that work. That said, with a wife and two kids, the priorities are different. I want the kids to have access to culture, and I want us to be able to afford access into the places that make a trip like this memorable. If we're eating Top Ramen noodles in rolling anchorages without enough money to drive the dinghy to shore, it's gonna be a very short trip.

[travellerw]

Welcome to CF...

You and I are very similar paths (except I have 3 kids).

I can tell you, our current budget is $3000 - $3500/month. Things that are included in your budget and not ours.. Travel home, This will be every 2 years for us. Maintenance, I'm fortunate enough to have most of the skills to do the work myself, as such our budget is smaller. Communications, I think you are very high here probably double or more. Fuel, I also think you are high here. Insurance, we don't plan to carry the insurance you do (no life, no health), its a calculated risk.

One thing I can tell you from e-mailing active cruisers... Whatever you budget you will spend, no matter what. If you budget high, you will eat it up somewhere guaranteed. They all recommended I start with a tight budget and expand if required.

Another thing to think about that might get you out there faster.. An older boat.. Its possible to get a late 90s 38-40 Cat for around $150K. If you are really lucky, it will only need a couple thousand in upgrades. Most likely it will need around $10K (must haves not wants). So for $160K you could have a boat and use the extra money to stay out longer.

[Interzone]

Nice to e-meet you, Travellerw! I hope our paths cross someday.

Re: insurance. We had an incident once (pre kids) where I was skippering a charter boat in Tonga when a family friend's young daughter was injured. Long story short, there was a 12 hour window where we were looking at evacuating her to Fiji because there was no adequate medical facility. In the end, we didn't go that route (thank God) but it really opened my eyes to how quickly things can go wrong, especially with young children. We just need to calibrate our own version of the calculated risk, which is likely different than yours.

As for maintenance, I am looking forward to learning and doing much of the work myself -- I'm planning to take marine diesel maintenance courses, for example -- but I've also got to be honest with myself that most of the work I've done with my hands lately has been typing into a computer, so I'll likely need to hire pros from time to time as I climb the learning curve. Which, I think, is part of the calculus on newer vs. older boat, too: I am assuming, based on personal experience, that the maintenance/repairs on a newer boat will be more in my wheelhouse than the major retrofit/repairs needed if we go with something older.

[sailorboy1]

In the end the way I understand the question is:

If I buy a newer boat can I cruise on $60k/yr?

My answer is - I sure hope so since my planned budget is less and when I ask budget questions I get hammer by the "how can you spend that much" people.

Go for it!


Sent from my iPhone using Cruisers Sailing Forum

[a64pilot]

$1,000 a month isn't enough for two adults and two kids to eat on, with once a week out to eat and socializing at the local watering holes?
If not, I guess I need to work on my budget.

Currently according to the wife we spend $600 a month, including cleaning / laundry supplies a month and feed seven.