Ultimately, your budget will dictate how much boat you can afford. Be certain the monthly payments are within your comfort range. If you plan to finance the purchase, you'll likely be expected by your lender to make a down payment of at least 20 percent. Beyond the monthly payments, however, owning a boat incurs other costs you'll want to factor into your financial picture. Use this worksheet to calculate how much your boat is likely to cost over the course of a year.

Insuring Your Boat
Your new boat is likely to represent a significant investment on your part, and you'll want to be sure it's adequately insured against loss or damage. Basic insurance coverage includes physical damage to your boat, bodily injury and property damage liability, and medical payments. You may also want to consider optional coverage for such things as personal effects, emergency service, and trailers. See your particular policy for terms and conditions.

Generally, yearly coverage could run several hundred dollars. Factors that affect the premium you pay may include the type of boat (sail or power), the cost of the boat, the operator's driving record, and whether the boat is operated on inland or in coastal waters. Shop around to get estimates from several insurers, and make sure you're comparing fees for equivalent coverage. 

Here's to Smooth Sailing 
Even if you're just buying a small boat to putter around the lake on weekends, take the time to learn about boating. Your local Power Squadron or Coast Guard Auxiliary can provide instructional classes on basic boating skills. Call 1-800-336-2628 for course locations in your area.

To promote your safety as well as your boat's resale value, you'll want to keep your investment in good condition. Regular service and safety checks -- and keeping detailed records of these procedures -- are helpful for keeping your boat shipshape. They are critical if you decide to sell.