How can we afford this?

The question that seems to get raised most often when people start blogging about their amazing adventures: How can you afford all of this? Our answer is simple: We never buy anything we can’t afford to pay cash for! 

We all get “nickel and dimed to debt”  buying useless things we’ve been influenced into thinking we need. When I get the itch to buy something, I put it into my Amazon shopping cart and let it sit there for a few days. By the time I come back to it, I usually don’t need it anymore.

When we bought our first cruising boat, we made sure it wasn’t a fixer-upper and would have a good resale value (more on those decisions here). We added a lot of gear, and when we sold Camille, after nearly three years of ownership, we made enough to get our money back, including the gear we had put into her! So basically, the boat was free, and all we had to pay for were our everyday expenses and boat maintenance.

TRAVEL TIPS

Cash from an ATM outside the US

We use our Schwab Debit Card to get money in the local currency. They do not charge any foreign transaction fees and reimburse all ATM fees. Never, ever get non-local currency from an ATM  – you will get ripped off on the exchange rate! So, if you are in Europe, get euros, not dollars.

Using credit cards outside of the US  

• Our primary card is a Capital One Venture Visa Signature credit card. It has been compromised several times, and we had to get a new card and account number. They will send a new card anywhere in the world overnight. Award points reimburse any travel expenses — no need to go through a special website. The card does have an annual fee, but I’ve been mostly successful in getting it waived. Just call and ask.
• We carry a few backup cards in case our primary card is lost, stolen, or compromised. Note that some banks will only send a replacement card to your home address.
• Pay close attention to how they charge your credit card at touristy spots like restaurants. Sometimes there is an option to pay in dollars or the local currency. Always choose the local currency; otherwise, the card reader will make the exchange, and it is much higher than the exchange rate you get from your bank.

Rental Cars
Oftentimes, it can be a lot cheaper to rent a car than to use a shuttle or taxi. If we need to rent a car, I reserve it on Priceline before heading to the counter. There is no need to pre-pay or leave a credit card, so I make several reservations and check back every day before our trip to see if the price has gone down.

Communications

• Calling the US from anywhere in the world is free using Google Voice (via WiFi), and you get a free phone number with voicemail. You can also use Google Voice to make international calls for a very low rate.  While we were cruising the Mediterranean, we often had to make local calls that would have cost 25 cents per minute on our cell phones. 
• Much of the world uses WhatsApp to send free text messages internationally. You can video chat, group chat, or call, but you both have to be on the platform.

SO WHAT DO WE DO TO KEEP THIS LIFESTYLE GOING?

Work
When we first quit our corporate jobs in 2011, we had only planned on going cruising for a year. We spent two years in Mexico, not working at all. Since returning to the US, we work part of the year as hydrographers. Rather than our old 9-5 corporate jobs with weekends off, we are lucky to be able to work several months out of the year for 12+ hours a day, 7 days a week.

Need/Want Analysis
We always ask ourselves Do I NEED this or do I simply WANT this? And impulse shopping is out of the question – not always an easy task. If I accidentally make an impulse purchase, I usually end up returning it because I realize I didn’t need it. If I see something I like, I try to let a week pass by. If I still feel it’s something I can’t do without, and that it will improve my life, I might buy it. Also, in the years before moving aboard, we always asked ourselves:  Is this something we can someday use (or fit) on the boat? Since we still live a nomadic lifestyle 14 years later, we still ask this question with every purchase.

Pay Me First
We set up automatic payments to our savings accounts on payday. Our checking account appeared less inviting for spending, while our savings steadily accumulated. We saved for over five years before the economy tanked in ’08, when we asked to be laid off before mandatory layoffs started.

Debt Free
We have been debt-free since we paid off our student loans in 2004. If you’re not debt-free, you cannot save any money. I see a lot of people out cruising and making payments on their boats. To me, that is not being debt-free. We paid cash for our boats just like everything else. Paying off debts should be number one priority.

House Sitting
We have been having so much fun pet/housesitting. And saving a ton in rent. We get to choose where we want to be and when, have a great place to stay, and best of all, get in some needed time to spend with dogs or cats. This is a win/win all around.

Earning Passive Income
After meeting the crew of Bumfuzzle in Mexico (and running into them again in the Bahamas and later Key West, Florida) and hearing about Pat’s book “Live on the Margin”, which teaches you how to make a living while traveling the world, we have been dabbling in the world of trading.

We also read this excellent book. Most financial help books seem to be just about getting out of debt. This book teaches you how to go beyond that. How to invest and spend your money, and how to live a life where you don’t have to count every penny.

Spending Tracker
It is amazing to see where the bulk of the money goes once you start tracking every penny! By tracking our expenses, we noticed just how much money we were wasting at coffee shops. To track our spending, I use RocketMoney. I bring all of our accounts into one place and can easily analyze our spending.

Credit Cards
We use our credit card for everything, pay it off monthly, and collect the cash back and travel points. Before we started all the big spending to outfit the boat, we got a new credit card that charges no foreign transaction fees, gives us lots of travel cash, and has excellent fraud protection. Make sure your credit card will send you a replacement card with free shipping anywhere in the world, not just to your home address.

Cars
We have always bought used cars that we can pay cash for. We don’t care how “cool” a car is as long as it is utilitarian. This is why we currently own a minivan  (check out how we easily convert our minivan into a camper van).

Clothes
Clothes and shoes take up a lot of space in a boat or minivan. We have learned to whittle down to the essentials, but I still pack too much for each trip.  When we cruised Mexico, we had tons of clothes on board that we never wore. I stored our spare clothing in 2-gallon zip-lock bags, and they held up great. If you gently sit on the filled bag while closing, it functions much like a vacuum bag (I find that expensive vacuum bags never last very long).

Furniture
Neither one of us has ever owned a single piece of new or fancy furniture. When it was time to get rid of our furniture, we took most of it back to the thrift shop where it came from. After we sold the sailboat, we stayed in furnished houses for over a year before buying the new boat. We have some furniture that we hand-made and store it in our trailer. I don’t know how we could live this lifestyle without our storage trailer.

Coffee Shops
This is one of the first things we did to start saving because we were shocked at just how much money we were spending every month. By reducing our fancy coffee habit to once a week, we started looking forward to “coffee day” (usually Fridays to celebrate the last day of the workweek). After a while, we just naturally stopped going as much and are down to once or twice a month. Our monthly budget allows for $20 per month, and we hardly ever reach that.

Subscriptions and Memberships
Have you ever added up all those memberships and subscriptions you pay for every month? Internet, Netflix, Hulu, Pandora, Amazon, gym, phone, phone data plan, magazines, etc. We try to re-evaluate what is important EVERY month. Instead of paying for Netflix, I use our digital library account. Make sure you use a big library as they have a much better selection. For a big city like Seattle, our city library has a very limited selection compared to our county library. I also get free books for my Kindle from our library, anywhere in the world. << Click on the link to read my how-to guide on borrowing digital content from your library.