From our experience cruising, just about everyone is living on money they already had. This varies enormously from people who are very well off to people with very little money and live accordingly - and are still having a great time.
Even the wealthy people tend to eat the local foods - a) they are available and b) that is part of the fun. Also the local foods vary from the markets where the locals go (not supermarkets, but stalls under some sort of shelter) to the most incredible supermarket I have ever seen in Papeete. One thing to think about is that the cost of living varies hugely from place to place. Ecuador was probably the cheapest and French Polynesia the most expensive (except solar panels strangely). Generally the more advanced the country, the more expensive it is to live there - assuming in each case you are eating what the locals do. In many places you can fish and in some places fruit can be free (ask first).
As to earning money, I think that is really problematic in most situations. Generally cruisers help each other with repairs rather than charge for them. You might get a bottle of rum or something for helping but not an income. In a few places you can get permits to work - generally in wealthier places but can't count on it. A few people write, but not for sailing mags, they just don't pay enough to really matter. The people who do write had writing careers before starting out and just keep doing it. For example, we met a guy in Fiji who writes science-fiction novels and I have written a number of school textbooks that need to be updated every 5 to 6 years each. We met one woman who made jewelry with shells and materials she brought with her. She bought some black pearls in the Gambier islands so she could make more expensive items to sell - generally to other cruisers. It was more like a paying hobby I think.
On the brighter side, I think it is cheaper to cruise than many people think, especially if
a) you don't switch countries too often - the government charges could kill a tight budget quickly. First time we went to the Bahamas and paid the $300 I was shocked, later on I would have been happy if it was just $300 per country.
b) if you have a very simple boat and simple needs. We met one guying cruising on a Bristol 27 without an engine. He fished and collected coconuts and was living very cheaply indeed. When he was in American Samoa (he was American) he was hoping to work but had not found anything yet - he was very handy with computers and communications gear. Met another guy on about a 31' boat with two junk rigged masts (that were flagpoles) and no engine and a dugout canoe for a dinghy. He would occasionally take an adventurous person or two (thing backpackers) on a 'crewed charter' for a few weeks in Panama. Had been doing this for quite a few years happily.
Heading back to Lake Ontario for this summer. Now in Bermuda and heading to Long Island Sound in the first week in May. Then on to the Hudson and the Erie Canal.