Monthly Archives: December 2009

Preparing Your Finances To Go Cruising: Part 1

Part 1

The Cruising Kitty

A kitty as defined by Webster’s dictionary: money pooled for some purpose.  The keys to a healthy cruising kitty and your financial tools for cruising responsibly include a checking account with a debit card, a money market fund, and any other investments you have that provide cash flow, such as stocks or real estate.  If you don’t own any stocks or real estate, that’s okay.  All you need to go cruising is a checking account with a debit card and a money market fund to serve as your savings account.
A regular savings account is fine for a place for money to sit, but a money market fund will pay a better interest rate and is still liquid.  Please note, a money market account with your bank is not a money market fund, it is a glorified savings account.  A money market fund would be through an investment brokerage firm like Vanguard or T. Rowe Price, and they pay much better interest rates.  You can keep the bulk of your savings in a money market fund and transfer the proper amount to your checking account to cover your monthly expenses while you’re gone as needed.  That way your money is making money for you as it sits in your savings.  You can arrange these transfers to your checking account to occur quarterly.
You should know before you go cruising exactly what bills are due each month, then be able to set up an automatic bill payment plan through your checking account.  As long as you make the transfers from your savings to cover these bills plus living expenses, you won’t have to worry about not being able to pay your bills.  Debit cards with a VISA or Mastercard logo are accepted all over the world and most cruisers agree they are the most convenient choice for cash withdrawals and financial transactions to cover daily living expenses.

Check Back For Part 2 Reducing Debt