Now that the living expenses have been touched on, the next big budget item are boat expenses. Three type of expenses fall in this category: boat insurance, ongoing maintenance, and capital expenditures. Maintenance costs maintain the boat's original value and normal level of upkeep; capital expenditures increase the value of the boat by improving it in some fundamental way. When the boat is sold, the depreciated value of the capital expenditures should be recovered. How much you spend on the boat while voyaging depends on a number of factors including the boat's size and complexity, material from which it was made, level of upkeep, whether or not it is insured, whether or not you are constantly upgrading systems, and how much work you do yourself. The smallest, cheapest boats still require some investment to keep them sailing safely. And as you can imagine, the budget on the high side can be as much as you make it.
- Boat Insurance - Insuring a boat for full offshore and foreign coverage usually costs between 1.5 and 2 percent of hull value. It used to be that most voyagers would not bother insuring their boats, but today more and more countries are requiring some sort of insurance before granting visas or cruising permits. Since my boat will be relatively inexpensive, and I am on a budget, I will only buy insurance where it is required. Insurance will be looked at in more detail once I have my boat, but I am going to budget around $500-1,000/year just to be safe for now.
- Boat Maintenance - Any investment to maintain the boat's condition or to repair, fix, or replace worn fittings or equipment falls under maintenance. This includes everything from varnish for teak to a replacement sail inventory. The total costs depends a great deal on the size and complexity of the boat, the level to which it is maintained, and the number of miles sailed every year. Most of these costs can be ignored for cruises only lasting a year or two with short distance passages, like I plan. But if I were to cruise much longer, these expenses would go up. This expense is very hard and near impossible to budget, but with a few assumptions based on all of my reading I will budget between $2,500-$5,000 a year.
- Capital Costs - Capital costs consist of expenditures to upgrade or fundamentally change a boat. How much you spend after you start cruising will depend on how much of a refit you did before you left and whether or not you enjoy upgrading your boat over time. I plan on spending at least a year or two on my boat working full time to upgrade and outfit for voyaging. Most capital costs will be finished before I leave, but I'm sure things will come up. This will be budgeted once I actually get a boat and see what needs to be done to it.