Owning a boat comes with many different financial requirements in terms of offshore banking. Aspiring to conquer the oceans, many desire the yachting lifestyle. But owning a boat is more about being properly prepared than just ‘learn how to sail’ so to speak.
Important money matters must be resolved before hopping off the boat. We’ll take a look at some steps to take for making the finances of owning a boat seaworthy in this guide.
As a novice or a seasoned skipper, you can keep costs in check with a bit of good advice right from the get-go.
What Is Basic Financial Planning for Yacht Owners?
Creating an annual budget that adequately covers all your expected costs is the first thing you should do. Remember the huge boat payment plus marina fees, repair, maintenance, insurance, supplies and fuel. You’ll also need to have a bit of money saved up for winter storage if possible.
The easiest solution is to calculate costs in monthly and annual terms. This "two-pronged" perspective eliminates seasonal or recurring payments throughout the year.
Also keep a 10-15% reserve on hand for repairs and any unexpected costs. You never know when the next big storm will come and wreak havoc!
Look over your budget at least once a week and make any necessary changes according to your actual expenses.
Inevitably, you will have windfalls or losses so be flexible to make a living in this sector. You’ll get through it, given enough preparation.
What Tools Help Manage Yacht Expenses?
When the baseline budget is crafted, sailors require tools to accurately track expenditure against it. One of the best tools is an online yacht expense tracking application or smartphone application. These allow for detailed reporting of all yacht purchases — whether fuel, supplies, repairs or fees.
Automatic spending categorization makes it convenient to identify spending habits. Integrated receipt scanning accelerates data entry.
Budgeting and accounting apps such as Mint, You Need a Budget or Quicken can also be utilized for yacht accounts, as long as you tag your transactions appropriately.
Excel spreadsheets offer a simple but flexible way to manually monitor income, expenses and net balances over time. Physical receipts and logs should be retained for tax and warranty purposes.
Either way, it’s vital that owners periodically review financial statements so that they’re able to identify outages and avoid unnecessary expenditures.
Device-syncing systems also make it simple to access and manage from both the yacht and from elsewhere. Documentation minimizes the chance of unforeseen financial losses and enhances the enjoyment of yachting.
How Can Yacht Owners Save on Taxes?
Are you aware that yacht owners could enjoy major tax deductions and exemptions? The IRS and other agencies view boats as commercial assets much like property or cars.
And with the proper documentation of qualified expenses, you can just as easily make your way off into the sunset without paying higher taxes.
Depreciation is a single potential massive deduction that allocates the yacht’s value over several years.
Deductions are also given for fuel, insurance, repairs, supplies, and other expenses. Even electronic gadgets, safety equipment and leisure gear that are solely used for the boat may offset tax-deductible income.
Tax assistance professionals make sure you get all your maritime law allowances. In some countries, for instance, partial VAT can be recovered for companies that rely on boats for business purposes.
Depending on the approach and paperwork, the tax deduction may be enough to cover an upgrade or two down the line.
How Do I Manage Currency Exchange for Yachts?
Travelling on a yacht overseas means that you must be comfortable with several currencies. High exchange rates add up quickly if you don’t have a plan.
Owners cruising between Europe and the rest of the world can exchange euros, pounds, dollars and more within the year.
It is always a good idea to have an online offshore bank account that accepts multiple currency wallets and does not incur any conversion fees.
A digital bank such as Jetonbank offers this, along with debit cards that cash in local currencies at the interbank rate. Automated expense recording in originating currencies also simplifies tax accounting.
Yacht owners can also benefit from storing a small inventory of common currencies on the boat in cash. Swapping larger amounts at local banks means avoiding dependence on cheaper-rate marinas and stores.
Cash back cards and international-free credit cards reduce exchange fees even further. Advance planning and digital banking apps are, in general, a lot cheaper than paying surcharges randomly.
What Type of Bank Account Does Yacht Owners Need?
The right bank account for yachters offers both international reach and tax and regulatory benefits. A local bank account in a bricks-and-mortar location close to the house marina will suffice for simple domestic transactions, but not overseas ones.
In contrast, non-residents are typically subject to restrictions and surcharges in accounts at foreign banks.
An offshore bank account, offered online by an offshore bank such as Jetonbank, solves all these problems. Licensed under a suitable jurisdiction such as the Commonwealth of Dominica, Jetonbank enables owners to safely bank around the world from a single account.
Bill pay, wire transfers, and foreign exchange are available online or mobile in a number of countries around the world.
Jetonbank accounts also have privacy and tax advantages depending on the owner. There are multiple owner and beneficiary profiles, providing flexibility. Credit cards are convenient for purchases and ATM withdrawals throughout the world.
Additionally, Jetonbank has an in-house team familiar with yacht owners’ tax, registration and other financial issues.
A sound budget is crucial to successfully managing the expense of owning a yacht. Spending is managed through budgeting, expense management and tax planning.
Digital offshore banks make global banking, payments, money transfer and regulation simple. With the proper tools and planning, yacht owners can cash in on all the deductions available and sail their ships safely.
If you’re ready to take charge of your yacht finances, try opening an international bank account for yacht owners at Jetonbank.
You get global accessibility, tax benefits and professional assistance – from one single safe online location. Visit Jetonbank to learn more.
