Is there a rule of thumb...

**greenskeeper** · 11-05-2017, 04:44 AM

The two greatest days in a boat owners life:

1) the day they buy the boat

2) the day they sell the boat

**disneysteve** · 11-05-2017, 05:06 AM

Originally posted by MattyPic22 View Post

...on how much one should spend on something they don't necessarily need?

I want to buy a boat.

I guess I could always finance the boat

I am single with no kids either so if there was ever a time for me to do it its now.

Suze Orman always told people on the "Can I Afford It?" segment of her show not to spend more than 10% of your savings on a single purchase.

You shouldn't finance luxury purchases. If you can't afford to pay cash, you can't afford it.

The last statement I quoted is exactly the opposite of what you should be thinking. When you are young and single and have low expenses and a good income is the most critical time in your life to be socking away money for the future. It gets a lot harder when you're married and have kids and higher medical costs and activities and travel and college savings and everything else. Now is the time to be building a solid foundation to support your future. It is not the time to be blowing 30% of your money on a boat. And that's not even counting how much it costs to own and operate a boat: docking costs in season, storage costs off season, fuel, insurance, supplies, etc.

**Nutria** · 11-05-2017, 06:52 AM

Originally posted by MattyPic22 View Post

The boat I am looking at would be roughly 30% of my savings that I have stashed away.

What about when you exclude your emergency savings?

Is that too much to spend on something

You're ignoring all the other expenses that go with maintaining and using a boat.

that would only be a hobby?

That phrase indicates that you're trying to justify to yourself something that you know is probably a bad idea. After all...

Unless you're going to become a professional fisherman or tour boat operator... what else would it be, other than a hobby?

I see all these people out there with boats motorcycles quads and what not

You're envious, which is perfectly normal. "They have cool stuff, why can't I??" (It's why I stopped watching TV, got a media player and started buying DVDs: no commercials for the wife and kids to watch, either, worming into their brains.)

and I have to question where they get their money or if they just don't care about financing hobbies.

That's the $64K question. Some have saved or had their parents buy it for them, but many have financed.

**MattyPic22** · 11-05-2017, 07:04 AM

Ok fair enough. Now I know the rule of thumb is 10% on purchases like that

**disneysteve** · 11-05-2017, 07:10 AM

Originally posted by MattyPic22 View Post

Ok fair enough. Now I know the rule of thumb is 10% on purchases like that

I hope you got more out of the responses so far than that, although at least you got that.

Do you have at least a 6-month emergency fund?
Are you saving at least 15% of your gross income for retirement?

**LivingAlmostLarge** · 11-05-2017, 07:13 AM

I guess it depends. I am thinking maybe. 30% of savings that is not ef? But just taxable account? Then maybe it is the time. You'll probably have to sell the boat once a partner and children (if that is what you want) come into the picture. But if a partner and kids are not what you want then why not? I don't particularly see the harm if you are disciplined enough to only have a mortgage and save I think yes.

**disneysteve** · 11-05-2017, 07:18 AM

Originally posted by LivingAlmostLarge View Post

I guess it depends. I am thinking maybe. 30% of savings that is not ef? But just taxable account? Then maybe it is the time. You'll probably have to sell the boat once a partner and children (if that is what you want) come into the picture. But if a partner and kids are not what you want then why not? I don't particularly see the harm if you are disciplined enough to only have a mortgage and save I think yes.

"Maybe" is probably the right answer here but we don't have enough information to really answer the question.

If you have a reasonable mortgage, a 6-8 month EF, are saving 15% for retirement and maybe another 5% for other needs, and all of your other financial obligations are being met, the boat purchase might not be unreasonable. As I said above, don't forget to factor in the costs of boat ownership which are substantial.

If you'd like to post a more detailed accounting, we'd be happy to give a less generic answer.

**rennigade** · 11-05-2017, 02:17 PM

Bust
Out
Another
Thousand

Boats are fun...when someone else owns them. We were just in fort lauderdale...friend had a boat...great time. If you live somewhere with a waterway that leads to the ocean in Florida...then I would own a boat. If you're getting a boat for rivers...no thanks. Cheap fishing boat...go for it I guess.

**snafu** · 11-05-2017, 02:36 PM

I too wonder where you live, how many hours you have available to enjoy the time, care and maintenance of a boat. How much does each hour of boat enjoyment cost considering initial cost, licensing, trailering, launching, operations, insurance, off season storage? Can you dock the proposed boat at your own dock, adjacent to your home? Do you propose to do your own maintenance?

**scfr** · 11-05-2017, 05:15 PM

Originally posted by MattyPic22 View Post

...on how much one should spend on something they don't necessarily need? Long story short, Im 29 years old, have done fairly well for myself since I started working in the family business 8 years ago, and I want to buy a boat. Only debt I have is my mortgage. No credit card debt or student loans or car payment. The boat I am looking at would be roughly 30% of my savings that I have stashed away. Thats if I write a check for it. I guess I could always finance the boat but I don't like adding another bill for anything. Is that too much to spend on something that would only be a hobby? I think of myself as a fairly smart person but here I am stumped. I see all these people out there with boats motorcycles quads and what not and I have to question where they get their money or if they just don't care about financing hobbies. By the way I am single with no kids either so if there was ever a time for me to do it its not. Thanks.

Matt

Here are 2 scfr rules of thumb:

1. If the amount you are going to spend is an amount that you won't even notice, then you can afford it. Seeing your savings fall by 30% is something you would notice, so you can't afford it.

2. You can afford it if you have saved up for it over time, and have made trade-offs (aka sacrifices) so that you can save for it while still meeting all your other financial obligations to yourself and to others.

Maybe some day, but probably not right now!

**MattyPic22** · 11-06-2017, 03:35 AM

Originally posted by disneysteve View Post

I hope you got more out of the responses so far than that, although at least you got that.

Do you have at least a 6-month emergency fund?
Are you saving at least 15% of your gross income for retirement?

Yes and Yes

Actually the thing that got me questioning all of this in the first place is because I have too much money in my checking account doing nothing for me. Ive heard only have your six month emergency fund in their and invest the rest. Either in paying down my mortgage or in my SEP IRA

**Nutria** · 11-06-2017, 04:39 AM

Originally posted by MattyPic22 View Post

Actually the thing that got me questioning all of this in the first place is because I have too much money in my checking account doing nothing for me. Ive heard only have your six month emergency fund in their

Abs-o-fricking-lutely not!!!

Not only is it sitting there earning no interest, but you SEE it every day, day after day after day, calling to you, like the Sirens, "Spend me! Spend me!!!!"

Stick it in an online bank (I like Ally, but there are others) savings account:

you earn (some) interest, and
you can't (easily) see it, but
you can get it within a few days in an emergency.

and invest the rest. Either in paying down my mortgage or in my SEP IRA

Or... save for a boat!

**Fishindude77** · 11-06-2017, 05:52 AM

I'm a boat guy so won't be as harsh as others.
If this is something you enjoy, and you have all of the basic financial aspects of your life already covered (emerg fund, savings plan, retirement plan, housing, health insurance, etc.) all covered i see nothing wrong with buying a boat.

A couple considerations:

Buy a used one, the savings will be huge and people don't put many hours on boats anyway.
Pay cash, don't borrow for a toy.
Don't forget operating costs in the equation; fuel, insurance, storage, internalization, launch & docking fees, etc.
If it's something that you will trailer, do you already have an adequate tow vehicle?

**TexasHusker** · 11-06-2017, 06:36 AM

Originally posted by MattyPic22 View Post

...on how much one should spend on something they don't necessarily need? Long story short, Im 29 years old, have done fairly well for myself since I started working in the family business 8 years ago, and I want to buy a boat. Only debt I have is my mortgage. No credit card debt or student loans or car payment. The boat I am looking at would be roughly 30% of my savings that I have stashed away. Thats if I write a check for it. I guess I could always finance the boat but I don't like adding another bill for anything. Is that too much to spend on something that would only be a hobby? I think of myself as a fairly smart person but here I am stumped. I see all these people out there with boats motorcycles quads and what not and I have to question where they get their money or if they just don't care about financing hobbies. By the way I am single with no kids either so if there was ever a time for me to do it its not. Thanks.

Matt

Buy it.

Is there a rule of thumb...