I'm not going to lie. Talking about the financial aspect of planning this dream makes me a little queasy. What does my mother say? "One should never speak of politics, religion or finances in polite company." But at this point, are we really polite company? I think not. Indeed, in planning this trip, there were some very benevolent souls in the blogosphere who kindly detailed every penny they spent over the course of their 4 year circumnavigation. If these people had not been so forthright with their financial information, we would not have known where to start. So, we consider it our duty to pay it forward and tell our story, too. We will start at the beginning on this topic, as the devil is in the details.
One day in November of 2004, I found a blank chart taped to the wall of my apartment. The chart itemized the category of expenses I had in a typical month, and left a blank spot for each day to be filled in. ...What the... I looked past the chart and into my bedroom where a pile of shopping bags from Old Navy (college, people!) sat on my bed. I looked at Andrew uneasily.
"We are going to track everything we make and spend in a month!" Andrew proudly proclaimed.
I recoiled with a mixture of fear and disgust: What's he trying to do, control me? Control my spending? Who is this crazy-cheap dude, so obsessed with money that he is trying to force me to track the money I spend? Who does this guy think he is? It's not like we are married or anything, we've been together a year or something? I am pretty sure I said something like that to him. And I'm sure his smile faded, and I can't remember, but I'm pretty sure this turned into a "discussion."
As a kid, I have always been taught to "never spend more than I make" and to save for retirement. But beyond that, my family is filled with generous people who spend the money they make on food and drink for gatherings. We show love through gifts. We enjoy traveling together. My family doesn't have a lot of money, but what we have, we spend creating warmth and close connections. The idea of keeping a budget felt cold, calculating and confining. I did not like the idea.
Andrew's family, on the other hand, is frugal. Their family motto could be coined as "save everything that you don't need to spend today." Andrew's maternal grandparents never met a yard sale they didn't love, and Andrew's father keeps a strict rotating diet both for health and for the simplicity of grocery budget planning. They are a well oiled machine of financial responsibility.
I can't remember now how Andrew convinced me this would be an acceptable practice to implement, but I somehow became willing to give it a try. He explained that we didn´t have to prepare a budget (which requires predicting what I will spend, and then limiting myself to that prediction), instead we just tracked whatever we did spend. I was hesitant, but agreed.
Each day, I would do what I call "The March of Shame". At the end of the day I would walk down the all to where the chart was taped and tally all the things I spent. I would hand write the values in the available space.
By the end of the first month, I realized that just having this knowledge is powerful. Anytime we wanted to add a large expenditure in our lives, (i.e plan a wedding, pay for a honeymoon, build a house, buy a boat, quit our jobs to travel the world) we had personal and historical data at our fingertips. The chart removed the guesswork. We knew our habitual spending to the penny, and we had a concise list of options from which to cut. We knew what was realistic, and what was not.
Over the years, we continued to manually keep the chart. While we moved the charts to excel spreadsheets, we never used programs that automatically uploaded information for you, like Mint.com. During the "walk of shame" to the paper chart or to my computer, my mind considered whether my decisions that day were worth the cost. The manual entry created the time and mindfulness required to observe and take note of my personal behavior. It slowed my thought processes enough that I could make more conscious decisions regarding money both while I was writing on my chart, but also the next day when considering whether a purchase would be worth having to put on the chart.
The power of the tracking chart expanded beyond money management as well. The picture of my expenses exposed what my priorities were, in action. I may always say that health and fitness is a priority for me, but did my day to day actions play that out? The financial tracker exposed my lie. One year, I spent almost twice the amount eating out than I spent on buying clothing or paying for health related expenses. That year, I gained weight. The next year, I took some of the money I spent eating out and directed it to a trainer at the gym and some new clothes. I lost weight.
It's good for the soul to know exactly what your financial picture is. It brings confidence, accuracy, and a solid dose of reality. We learned that there is always something unexpected that comes up, so you had better just budget a chunk of money each month for that unexpected doctor's visit, broken car part, or friend in need. We also learned that when you have three solid months in the red, you start to run out of money. It gives us the clarity of mind to turn problems around early, and know when we are spending like....a drunken sailor.
And so as promised, here is our six month expenses tally (February through August). Before we left, we set a sailing budget of $4,000 and we are averaging $214 per month over that estimate. Our budget is (very) generous and allows us to do everything we have wanted to do out here, so far. Many people sail on so much less: i.e. $1500 per month! Almost anything is possible with some bit of discipline and priority management. Our budget is just one example.
Total Sailing Expenses: $25,286 (Monthly Avg. $4,214.00)
Communication Expenses: $1,379 (Internet, Emergency Sat Phone, and Ting Cell Phone plan)
Sonrisa Maintenance: $1,966 (Includes Kitty)
Check In Fees: $2,036 (Hello, expensive Galapagos)
Dining Out: $3,594
Entertainment: $4,656 (Scuba diving, guided hikes, tours, souvenirs)
Insurances: $5,619 (Life, Disability, Health, Boat — This is painful. A lot of people sail without insurance so this line item is an extra luxury for us.)