One thing we talk to Superyacht Crew about a lot is budgeting. Whether you are saving for something specific, trying to be careful with your money or simply like to be in control. Having an idea of how much money you should save each month is always a good idea.
The great thing about working on a Superyacht is that you don’t really have to worry about overheads, rent, food etc. We all know this makes a huge difference to your disposable income. Most single crew average around 90% disposable income as a result.
So why is it so many of you seem to have fallen down a hole every month? We mean a financial hole by the way. This is something that, based on what you earn vs your overheads just should not be happening, so why is it?
Here are 3 phrases you should never hear yourself say as a yachtie;
I haven’t got any money until payday
I’m up to my overdraft limit
My credit card bill is more than I earned this month
So, Where is it all going?
The big questions is, what are you doing with it? Why are you running out of money each month? What % of your monthly income do you think it is wise to save?
We realise that there are a lot of you out there who are married with have children. You have houses you actually live in and bills to pay etc and so this is not so relevant to you. By your point in life you probably have all this worked out. The point behind this article is to get those of you between 1 and 5 years into the industry to start thinking about this.
Do a lot of Crew Spend all their money or is it just me?
Lots of you, and we really do mean lots don’t have any money left at the end of the month.
We’ve all been there and it’s easy for us to criticise as we who now live on land are forced (due to lifestyle, tax etc) to budget our money. The fact of the matter is that most of you don’t have to budget as it is something that you don’t have to think about. If you spend all your money each month it’s no big deal is it?
But the more we hear it the more this makes us think that maybe there should be some guidelines. A simple “how to get ahead financially” for yacht crew as it looks to us as though a lot of you need some help
Make a plan
Remember, what CREWFO does is help crew. We’re not here to make you feel bad about what you do with your money. In this article we are not going to tell you how to invest or where to save etc. We also don’t exploit crew for money and give them useless advice. BUT we would like to be able to give you some guidance.
How much money should you be keeping either to one side, saving or investing each month?
If you need help with what to do with your money then we can of course advise you on this too. But that’s not what this article is about.
If you are UK crew this is definitely how you should look at it;
- You don’t pay tax because you are not required to.
- So, the money you are not paying in tax you should definitely be saving. This is a minimum of 20% depending on how much you earn. As a rough guide. If you earn over €50,000 per year you should be saving 30%+, €80,000 per year 40%+ and over €150,000 per year 50%+.
- Remember this is assuming you are not married, do not have kids and do not live in a house that you have a mortgage on. You should be able to save this without any problem.
- This means if you are a junior decky earning €2500 per month you should be saving €500.
- By the end of your first year you should have a savings plan in place. Whatever your goal, you should be on the way to achieving this. Simple ideas are savings accounts, ISA’s, or long term investments such as pensions. There are lots of options out there and a qualified and regulated financial advisor will be able to help you here.
Ignore strangers’ advice
Superyacht Crew are generally pretty smart people. So why do we hear about you doing things which you would never do if you were at home.
- Don’t take advice from some guy walking the dock who you have never met. Do your research first and find out a bit about who you are dealing with. Can you trust them? Are they actually a regulated professional?
- Forums are not generally a good place to get advice as information is easily corrupted. Remember, a forum is based on peoples’ opinion rather than fact.
- There are quite a few forums out there that are not at all as independent or unbiased as they say. Be aware of this.
- Get references from other crew who have used a service. If you can’t get a reference easily walk away. Let someone else take the risk.
- Don’t get over-excited and sign up to something before you know what it is.
- Yachting is a small world, there will always be a few people you know who have had an experience with a company, or have a friend who has.
- Remember this is your money. If in doubt do nothing. Don’t be pushed into anything by anyone. If you are going to throw your money away at least get a good hangover and some memories out of it!
- By the end of your 2nd year or mid way through your 3rd year buying a property should be on the horizon for you. If this is your thing, and it is for most crew then you should have a 25% deposit ready to put towards your first rental property. Remember, you aren’t going to live here so you are buying somewhere simply as an investment. Buy wisely, with some expert help, rent it out and someone else is paying your mortgage.
- In theory, if you do this every two to three years after that you will have a decent independent income from rental property by the time you are ready to leave yachting.
Am I an idiot?
Something we also find a lot is that most of your friends back home are completely stunned by the lack of foresight crew have. They are quite literally unable to understand how you can earn what you do, have no overheads, pay no tax and still have no savings. Look at this from their point of view and you will start to see what they mean.
Remember, I have been in your situation. I have spent every penny most months. I’ve made foolish investments without thinking about it and pretty much walked away from yachting with nothing.
So, when I criticise you I am criticising myself for not thinking too.
If this is you and you need a hand, let’s talk. All of our 2000 + members are entitled to this advice and so please make the most of it and get in touch. If you are not a member yet and are a bit lost, or worse still have fallen down the hole then get in touch.
Remember, it’s never too late to make a plan.