Plan Your Annual Boat Budget, Plus Money-Saving Tips

There is no doubt that the boating lifestyle can be expensive.  Just how expensive depends on the size of the boat, where you keep it, and what you do with it.  Buying the most expensive boat (currently $106 Million on Boat Trader) that you can afford and then underestimating your operating expenses and cost of ownership is something that normally results in either under-utilizing your boat because you can’t afford it, or the repo man taking your hard-won toy away.  So, here’s my outline for estimating your annual operating costs and some tips on how to save money in a few areas.  Hopefully, this will lead you to buying or financing the right boat for your overall budget and intended use, and leave you enough money to enjoy it.

Boats idling at a dock because you didn’t anticipate operating costs are in a sad state. Don’t be boat poor, use the guidelines in this article to control and plan your annual operating expenses.
Boats idling at a dock because you didn’t anticipate operating costs are in a sad state. Don’t be boat poor, use the guidelines in this article to control and plan your annual operating expenses.

You do have choices about what spending level you end up with.  These revolve where you keep your boat and its resultant ease-of-use, and there are basically three levels. The first is trailering your boat; the boat resides on its trailer between trips to the water. The second level is for boats that stay in the water all season, requiring moorings and tender access, but are maintained by on a do-it-yourself basis.  And the third level is for boats that not only stay in the water, but are docked, maintained, and stored at a professional boatyard.

A rule of thumb is to estimate 15 to 20 percent of the value of your boat for operating expenses.  However, since many costs involve the size of your boat at a $/ft rate, the bigger and more expensive boats will cost more to operate.  Be aware that boats over 40 feet in length are generally not trailerable and may not be practical DIY boats, i.e. you can’t store them at home and they need special equipment to haul and move them.  The bigger the boat, the more yard-dependent you will be.  To get specific, I suggest researching fees and expenses in your area, then using a spreadsheet to calculate the following expenses, with your intended spending / ease-of-use level in mind.

When I created a hypothetical 30-foot powerboat and plugged in anticipated operating expenses based on whether I was going to trailer, DIY, or keep the boat at a boatyard, I came up with some pretty significant cost differences.  For example, the same boat would cost $3,472 to trailer, $6,432 to keep on a mooring, or over $20,142 to keep at a dock and have the yard store and maintain it.  This is based on my experience of local expenses found in the northeast U.S.  Below is a list of potential expenses that you can use to manage your budget:

  • Dockage or mooring fees
  • Launch/hauling
  • Storage (outside, includes blocking and stands)
  • Transportation
  • Winterizing/lay-up
  • Cover
  • Maintenance
  • Commissioning
  • Marina fees and/or yacht club membership
  • Dinghy storage
  • Insurance
  • Excise tax
  • State boat registration/documentation
  • Trailer registration
  • Fuel
  • Safety equipment (charts, PFDs, flares, etc)
  • Other equipment and miscellaneous

Download our free Boat Budget Spreadsheet to use for your annual boat budget.

Some expenses, like fuel costs and insurance remain fixed across all categories, but the other expenses can vary significantly.  I purposely left out purchasing costs such as broker fees, taxes, surveying costs, monthly mortgage fees or fishing and skiing equipment you might like to add to your purchase—this is intended to show annual operating costs only.  Please note, there may be some additional one-time charges that the trailering and DIY owners should be prepared for that customers of boatyards probably won’t see, such as purchasing a trailer or permanent cover or acquiring specialty tools, ground tackle, and boat stands.

How to Save Some Money

Obviously, the more you do yourself saves money, but also look to eliminate fees like the annual state boat registration fee by federally documenting your vessel. Also, investigate the frequent fuel programs offered by many marinas for regular fuel customers. If you are a yard customer, sit down with your yard’s service rep and come up with a long term multi-year maintenance program. Joining a yacht club may seem an extravagance, but clubs often provide launch service and have reciprocity when you’re visiting clubs in other harbors where you can use visitor moorings and facilities at no charge. With regard to insurance, you may be tempted to forgo this expense, but be aware that insurance is usually required by boatyards. Premiums are based on agreed value, age of vessel, owner’s claim history and experience, and a survey of the vessel. A cost-effective alternative between trailering and keeping your boat in the water, is rack storage—a launch on demand marina.

I hope you find my guidelines useful in estimating your own costs and that this leads to more enjoyment because you can feel comfortable accurately estimating and living within your boat budget. I’d love to hear comments from anyone who has suggestions on reducing operating costs.

A previous version of this article appeared on Boat Trader in January 2014.

Boat Trader has plenty of  Buying and Selling advice, but also check out the hundreds of articles in the Boating section, with tips on everything from seamanship to maintenance, how-to, where to find replacement parts, and much more.

Written by: Peter d'Anjou

A USCG licensed captain and former merchant mariner, Peter d'Anjou is now a freelance writer and editor. A one-time executive editor at Sailing World magazine, he writes about his passion for racing and boating. Having managed a large yacht repair facility in the NE U.S. his background in boat construction and repair translate to the practical side of boat ownership.