Smooth Fiscal Sailing: 7 Tips for Superyacht Crew Financial Management

One of the best benefits of working on a superyacht is the ability to make good money in a short amount of time.  After all you have a place to live, no living expenses, and subsidized travel to some amazing destinations!

However, just because you’re not paying rent and buying food, it’s still important to carefully consider your budget. If you plan ahead and manage your money wisely, you can accumulate significant savings while working on a yacht.

As always, when it comes to personal finance, your decisions will be driven by your priorities, discipline, and preparation. Here are seven things to consider when looking at your yachting income and preparing your budget:

1. Salary, benefits and Cost of Living

Depending on your job and experience and the type of boat you’re working on, your salary will vary, but ultimately it will also reflect a low cost of living. Be sure you consider the entire package of compensation you receive -- which typically includes food, accommodation, uniforms, toiletries, medical insurance and an annual flight home. 

Also consider where the boat will be based, and how often you’ll be moving or with guests on board. If you are based in the Mediterranean and have a lot of free time on your hands, you’ll end up spending considerably more money than if you are employed on a busy charter boat with less time to spend your hard earned savings. 

2. Medical Insurance 

Many yachts provide medical insurance to their crew members. However, be sure you inquire about the details of this coverage. For instance, are you covered during periods of travel to and from work? How does the insurance work if you are injured while on shore? Are you able to keep your coverage at the end of your contract?

If you have existing health insurance, be sure to closely review the terms of coverage. In many cases, you may not be fully insured when traveling outside of the country.

Finally, closely consider the range of coverage and how it applies to the entirety of your life. You may have comprehensive medical insurance for injuries onboard or in the marina, but if you rent motorbikes with your colleagues on your day off and get into an accident, how are you covered, if at all?

While medical insurance via your yacht employer is likely to cover your basic needs, you may want to budget for supplemental insurance coverage, such as dive insurance, short-term travel insurance, or ad-hoc vehicle insurance. You may also be able to negotiate your yacht crew insurance to provide additional coverage beyond the standard.  While these costs are likely significantly lower than a standard medical insurance premium, you’ll want to factor them into your budget bottom line. 

3. Savings & Investments

As with any career, saving and investing should be a key part of your budget. Depending on your residency -- which we’ll discuss more below -- you may have different tax obligations. It’s useful to think about your money as going to different baskets. Most people will want to consider assigning their money to at least four baskets:

Taxes: Whether it’s a flat tax or a complicated combination of social-security and independent contractor fees, you’ll likely want to set aside at least 25% of your income for taxes. While it’s frustrating to see so much of your hard-earned cash leaving your wallet, you’ll be happy to have the money set aside when your tax bill comes due.

Emergency Savings: Traditional financial wisdom argues for setting aside at least three months expenses into a protected emergency fund. While it’s harder to pinpoint an exact amount when you’re not actively paying rent, car payments, or utilities, it’s to your benefit to estimate what your living expenses would be if you suddenly had to find a place to live and start seeking a new job on land.

Long Term Savings: Whether you’re saving for retirement or for a down payment on a future house, long-term savings are critical for your financial health. You’ll want to set aside at least 10% of your income for this category. However, without daily expenses, you might be able to send as much as 50% of your salary into long term savings. Once you start to accumulate more than a few months salary, you’ll want to explore investment options. Talk with your trusted financial advisor, or consider an established internet-based service to manage your investments on your behalf.

Everyday Expenses: This basket is variable, but may include things like onshore travel, leisure clothing, entertainment, and other personal expenses like gifts & shopping.
 

4. Taxes & Residency

While you’re traveling the globe as a yacht crew - do you still have a home country?

As much as you might wish to become a “citizen of the world,” your country of citizenship likely still sees you as a resident, and will tax you accordingly. Breaking residency ties can be complicated and difficult to achieve, especially if you have any ties back to your homeland -- even something simple like a mobile phone account.  Be sure to consult with a qualified tax advisor before you stop paying taxes to your home country.  

5. Up Front Expenses

If you’re already a certified crew member living in Florida, the Caribbean, or the Mediterranean, your up-front expenses may be minimal. But if not, you’ll have to take some training, gain your qualifications, and travel to a yachting hot spot in order to secure a job. All of these things will cost you and eat into your savings and initial salary.

When you’re looking at your budget and prospective earnings, be sure to factor in these up front expenses.

6. Travel

One of the greatest perks of working on yachts is access to some of the premier destinations of the world, from tropical islands to swanky cities. You’re also often only a short hop away from more extended regional travel in Europe, Central America, and the South Pacific.

The downside is that premier destinations - the kind that attract many yachts - can be expensive! So when you’re onshore be thoughtful. Stay in crew housing or partner up with colleagues to share rooms at local hotels or vacation rentals.

Factoring local travel into your budget will ensure you’re prepared to enjoy those once-in-a-lifetime experiences without handing over all of your hard-earned money.

7. Practical Tips

Open An Offshore Bank Account

Picture this: You’ve just come ashore in the Caribbean and you’re ready to enjoy some well-earned leave time, but when you go to the ATM to withdraw some cash for drinks at the local hot spot, you get yet another unfriendly notice -- your debit card will be charged an extra currency transaction fee, or worse yet, has been flagged for potential fraud.

When you’re working on a superyacht, it’s smart to set up an offshore bank account. This way you can bank in multiple currencies without penalty -- a key factor when you’re mobile and frequently switching between currencies.

Assign a Power of Attorney

While you’re traveling the globe you may feel footloose and fancy free without substantial ties back home or obligations that follow you. However, at some point you may need to do something that requires your legal presence or representation far from where you are. In this instance, it’s handy to have someone back home with a power of attorney to represent you.

Granting a power of attorney is effectively giving another person legal power to take any action in your name, so it’s important to be thoughtful about who you select. And in most cases, a limited power of attorney -- granting the chosen person a specific ability, rather than a blank check -- makes the most sense.

Invest in Yourself

While you’re working on a yacht, you’ll have many opportunities to continue your professional development. Consider cross-training with another crew member to learn more about their work. Take advantage of in-port opportunities to network with other crew members. Seek out a mentor onboard, or perhaps within your nautical community.

If you keep your eyes open for learning opportunities, you may also be able to gain experience while also benefitting your current employer. For instance, talk with your captain about what the yacht needs. If you work in a deck position, will the boat pay for training and upgrading your certifications? If you are working as a chef, is there a specialty cooking class happening while you’re in port for maintenance? Would the yacht management pay for, or subsidize, your cost of attendance in order to then benefit from your improved culinary offerings?  Could you add a fitness or wellness certification to your resume, and augment your crew salary by leading a yoga class or providing massages to guests?

When it comes to investing in yourself and your career the opportunities are endless. Be proactive and attentive when possibilities cross your radar.