While we are happy to share with you our monthly expenses and our outfitting expenses (no longer being updated), we wanted to discuss the real magic behind all this.
We never buy anything we can't afford to pay cash for. There! That's it! While we still had a ton of fun while getting ready for this new chapter in our lives, we spent frugally and put lots of money in the bank. We bought and sold boats (usually at a small profit) and went out to dinner when we felt like it. It saddens me to hear how some people get nickel and dimed to "debt" buying useless things they've been told they need.
We don't have enough money saved to do this forever, so we hope to make a little extra cash with this blog. We put in a lot of time and effort to share this journey with you, so if you like our blog please use the Amazon search tool at the right before purchasing anything from Amazon. This way we will get a small percentage from your sale and you don't pay a penny more.
- 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 an easy task. If I see something I really like I let at least a week pass by. If I still feel I need that certain item in my life and that it will improve my life I might buy it. Also, before moving aboard I always asked myself: Is this something we can someday use on the boat?
- PAY ME FIRST! We set up an automatic payment to our savings accounts on pay day. By making it a little more than we thought we could afford it made us pay more attention to our spending habits. The checking account never looked very conducive to shopping and the savings just kept growing!
- 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. We get asked a lot if we make payments on the boat. To me that would not be debt free. So, yes, we paid cash for the boat just like everything else.In order to stay debt free we have to continue making money. If you like our blog be sure to use our Amazon tool before shopping at Amazon. :-)
- SPENDING TRACKER - This was a lot easier in the U.S. since we used credit cards/debit cards for nearly everything. It is amazing to see where the bulk of the money really goes once you start tracking every penny! Tracking our expenditures we noticed just how much money we were wasting at coffee shops. Now that we are in Mexico we use more cash, as it is more widely accepted and we don't have to worry about our credit card number getting stolen and then having to get a new card shipped. To track our spending I use with Mint.com (it does all the work for me). I can bring all of our accounts into one place and can analyse our spending with handy graphs. Then I use the graphs to show our readers our monthly cost of cruising.
- HOUSING We have never owned any real estate. It wasn't for lack of want. Some rental income while cruising would have been nice but was out of our reach due to the housing bubble. By the time that bubble burst we were close to our monetary goal and buying a rental-house would have set us back many more years.
- CARS We have always bought used cars that we can pay cash for.
- CREDIT CARDS - We use them for everything and then pay them 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 refunds all fees, charges no foreign transaction fees, gives us lots of airline cash (not just points!), charges no annual fee and has excellent fraud protection. Four months into it we already had to get a new card since someone else was charging to it!
- SHIPPING NEW CREDIT CARDS OUTSIDE THE US
- We have a Discover card which we never use. It iss simply a backup card in case other cards were lost or stolen. One day I received an email that they had sent me a new card because they had received information from a vendor that our personal information might be at risk. Of course they sent it to the US. I called and asked them to send a new card to Mexico and they said they do not ship new cards internationally.
- We also have a Capital One (Signature) credit card. It was compromised a while back and we had to get a new card and account number. They also do not send cards outside of the US so Mike's mom had to send it to us via DHL (very expensive!). It took about two weeks to find us since our address was at the marina and it was dropped at the harbor masters office.
- After my parents told me that Chase sent them a new card to Mexico via UPS, for free, without any troubles we have applied for Chase (Sapphire Preferred) credit card. I talked to Chase and they said they are happy to send cards anywhere in the world! How about that!? This card charges an annual fee after the first free year - I will ask to get the fee waived when year two comes around.
- CLOTHES I like to have a lot of clothes and shoe options. Shoes just don't fit anywhere and are always in the way on a boat. I haven't really found anywhere I like to shop in Mexico so I haven't bought anything new in months! We have tons of clothes we never wear on board... I store our spare clothing (cold weather clothes, work clothes, etc) in vacuum bags and they are holding up well so far.
- DINING OUT - We love to go out to eat! There is nothing like someone else making the drinks, cooking the food and doing the dishes. We've been cutting down.
- TRAVEL - As is quite apparent from our blog we love to travel. This is why we're doing this whole thing anyway, right? We try to do it cheaply yet comfortably. You can get some great deals on Priceline. Just recently we stayed in the Wyndham in Cabo San Lucas, right on the marina, for $50 per night because the hotel's pool was being renovated.
- RENTAL CARS IN MEXICO - When we first found a $6/day rental car we were ecstatic. By the time we picked up the first car we realized how grossly underquoted this price was. Mexico law states that every car have liability insurance and that amount is never quoted online. Add another $20/day to any quote you get online. The great part about renting a car in Mexico is that nearly every rental car company will pick you up if you call the local office directly after reserving online.
- RENTAL CARS IN US - If you need a rental car, reserve it (no need to pre-pay) on
PricelineCostco before heading to the counter. Costco seems to be the cheapest way to get a rental car in the US. Over 30% cheaper even than bidding on Priceline, which is what I used to think was the cheapest way!
- FURNITURE - Goodwill! Neither one of us has ever owned a single piece of expensive furniture. Our homes in our 30's looked much like they did in college. When it was time to get rid of our furniture we took most of it back to Goodwill.
- COFFEE SHOP COFFEE - This is actually 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 or twice a week we started looking forward to "coffee day" (usually Fridays to celebrate the last day of the work week). After a while we just naturally stopped going as much and were down to once or twice a month.
- SUBSCRIPTIONS AND MEMBERSHIPS - Have you ever added up all those memberships and subscriptions you pay for every month? Cable TV, internet, Netflix, Hulu, newspaper, gym membership, phone, phone data plan, magazines, etc. We try to re-evaluate what is really important every month. All we have left is Netflix since we like to watch a movie once in a while (canceled as well - WiFi connections too slow in Mexico). You also don't really need a cell phone plan. With WiFi you can make and receive calls from nearly everywhere.
- STAYNG IN TOUCH - Calling to the US is free using Google Voice!
- MAKING MONEY - After meeting the crew of Bumfuzzle and hearing of their new book we are going to delve into the world of day-trading. We'll let you know how it goes... Check out Pat's book "Live on the Margin" and companion website.