Owning a boat, regardless of type, can get expensive as you count the bills. Let’s face it, a boat is a luxury for most of us, and unless you make a living from your boat, that’s exactly what it will be: a luxury. Sure, it’s a fantastic luxury, but it’s an expensive toy, and depending on your budget, it can cost either moderate portions of your income or a large portion of your monthly income.

Before buying a boat, there are three vital aspects to consider:

1. You have the initial capital expense
2. Insurance and navigation permits.
3. Maintenance costs in the future
4. Gasoline for the engine

Then you have some more sub aspects to think about

What do you want the boat for and why?

It sounds like a silly question, but it really isn’t. In fact, it is quite deep. Do you want the boat for a few weekends on the lake? Do you want to do water sports and have fun with the boat? This will determine which ship you will get and consequently at what price it will be set. But right now, let’s understand our weaknesses as humans and our naturally impulsive desires that can get us into a lot of trouble when it comes to buying a boat.

Most of us, being humans, like the idea of ​​something we dream of. Maybe we like the idea of ​​a fast sports car, or we like the idea of ​​having a Lear jet, maybe we like the idea of ​​having a boat. Our desire sometimes blinds us to the practicalities of something. At first glance, we can, unless we have bags of cash, forget about buying an expensive sports car, at least for now and the Lear Jet is on the ‘maybe someday’ list.

However, ships may attract us for their feasible price tags. It seems possible to have a boat. The price is reasonable. That’s the bait right there. The price is possible, but in our excitement and enthusiasm we forget the real price: the cost of maintenance and permits. The cost of a trailer to take it to the lake or the cost of the mooring if we choose not to transport it. Suddenly, hidden expenses start to show their ugly and expensive faces.

There’s the insurance you didn’t negotiate for
The mooring prices that are much higher than expected,
The permits and maintenance that blow your budget through the roof.

Yes, she is a tempting lover, a ship, but a lover who can steal your time and cost you much more than you bargained for. Look beyond the price tag and research the actual costs. Make your cost projections based on solid research and build a cushion on all costs at 15 percent per year. This will save you from a short budget and protect against inflation, as well as protect you from unavoidable and unforeseen price increases. If all goes well, a generously over-calculated budget will give you a surplus to play and get luxuries.

Let’s say, as an example, after all the projected costs, the jackpot will cost you $ 500 per month, including refunds. Well, take that amount and add 15% to that and you will see $ 75 plus $ 500 = $ 575. These will be your actual costs and if you are on a budget like this, you will start to get a better idea of ​​how much this ‘luxury’ will cost you. . Now, based on these figures, go even further and look at the value vs. cost projections.

This is where it gets really enlightening.

Determine the projected use of the ship and how much each trip will cost you per year. If you plan to do 2 trips a month, based on the example above, it would really mean that you are paying $ 285 per trip (not including gas for the car) Is that a fair price for you for a good weekend or a good day in the lake? Also keep in mind that you are unlikely to use the boat year-round, so you could definitely add to the cost of each outing if you calculate annual usage.

Obviously you also have an asset, but one that is depreciating. Determine the depreciation of the asset over 5 years and calculate a projected sales price for that. Subtract the selling price from your projected spending and usage over the next 5 years and you get a total value or cost per exit. Do you see how this helps to calm the emotion and allows us to be pragmatic with our purchases?

How much do you want a boat, all things considered? You still think this is something you want, so welcome the future boat owner to a club and community of people who live their lives to the fullest, enjoying family, friends and their boats. And how much more enjoyable will it be to have a boat when you know you’ve budgeted well and see the value of the boat in terms of family lake excursions?

It’s about being realistic and instead of dreading the idea of ​​budget processes because ‘we just want the boat’, we can make a decision based on good judgment. Don’t let any of this discourage you from buying as a boat; It can be one of the most rewarding investments, but only if you do it wisely.

After that, it is beneficial to everyone.