Orange was the new black (thanks Kevin Spacey/Netflix). When we left, we had a budget of about 2-3k per month while we were cruising and we met that target except for January (Hawaii and boat setup), our month in Cuba and when we went to Disney World (10% of the annual spend in one week!). Even once we were back in the states with a monthly marina payment we were able to meet our goals, which was surprising but awesome too. Even in Canada, aside from our house, which is way too big for us now we easily meet our spend targets. Frugality doesn’t mean cheap, though in our culture that is exactly what we think or are taught. We don’t focus on avoiding spending money, we focus on spending money on things that matter or that pay us back.
Sailing cruisers are frugal. Most live on fixed incomes or savings and must balance the enjoyment of a dollar spent today versus the end of the cruise when the money, or kitty in cruiser-speak, runs out. When we untied the docklines we left with the idea that this was a one year trip and if we blew the budget a bit then we would catch up while we are back at work. At the same time we tried to get a few zero-dollar days per month in. Being tied to a dock instantly makes this impossible as you have a daily rent bill, and it is easier if you don’t have a car and nothing is currently broken. I think we got most of our zero dollar days last year in Georgetown even though groceries were a short dinghy ride away, you had friends heading out to lunch/dinner everyday and there were several good restaurants close by. Even though we spent about half the year tied to a dock we still made our budget most months which was good and surprising because most cruising blogs paint marina’s as the devil that will rob you of your cruising dreams.
So what is Viatorian frugality? We try to be strategic about how we meet our needs and wants, maximizing value and fun for a dollar. While cruising we didn’t have a strict line by line budget but a monthly target that we adhered to and achieved 75% of the time. While cruising, our expenses were pretty flat per month but moved from category to category depending on where we were. Some months we would spend a lot on repairs and provisioning and then other months we spent more on fun. This shift of monthly expenses from category to category is less prevalent when you live on land.
By nature Leah is far more frugal than I am but I have always liked financial blogs and books because I feel the Albertan Education system lets students down by avoiding lessons on money. I have been reading nearly everything the library has on the subject starting with “The Millionaire Next Door”, “Millennial Money” and I just finished “Expat Investor”. My favorite money blog right now is MrMoneyMustache (or MMM – rated at least PG-13). Thanks Michelle and Dan from Horizon for the recommendation on MMM.
Distilling these books down into a set of rules to follow to get from where you are to where you want to be is probably the hardest part of reading money books. It involves some belly button gazing to see where your strength and weakness areas are, some introspection as you develop your financial goals and some pain as you start to change your habits. This is our set of rules so far:
- Know where the money goes. We are using Mint.com to track all our spending.
- Reduce structural costs as much as possible. Smaller = better. (cars, houses, commutes, etc.)
- Evaluate non-structural spending to determine where you could save. A dollar saved from the monthly budget is two dollars earned; it reduces your annual expenses and lowers the bar for financial freedom and when invested pays you back.
- Sell, donate and trash your extra stuff. Ask yourself “Is this precious?” or “Have I used this in the last 12 months?” if the answer is no, goodbye and good riddances.
- Determine your investment strategy and execute it. Simple = good.
- Keep looking at your finances and look for opportunities to improve your situation.
- Before you buy something give yourself a cooling off period and run the expenditure by your partner in your frugality journey. Stuff ≠ Happiness
Frugality is a journey and we are only at the beginning of ours.