Monthly Archives: January 2010

Preparing Your Finances To Go Cruising Part 3

Part 3

Increase Income

Another way you can build your cruising kitty is increase your income. The less money you have going out and the more money you have coming in is always better. Keep working your job, because if you’re planning on changing your life and going cruising, you’ll need every penny you can make. You will want to work right up until you cast off the dock lines. If you have time for a second job, get one now. If the family, or your spouse is as excited about this as you are, then they should get a second jobs too. Cruising is all about teamwork. If they are not on board with the idea of going cruising, then you should rethink your dream. Seriously. Many would be cruisers have found that you often have to choose between your loved ones and cruising. More on that later in Preparing Yourself to Go Cruising.

Some creative ways that we personally use to increase our income are by working a second job, working longer hours at the same job (this only holds true if you’re paid by the hour), selling our cars, and selling our stuff (garage sales and ebay are awesome). This is your first taste of working to live, not living to work, and it will be the way you view your moneymaking ventures from now on if you choose to live the cruising dream for years to come.

Preparing Your Finances To Go Cruising: Part 2

pile of cashPart 2

Reduce and Eliminate Debt

The first thing you need to do to begin building your cruising kitty is to reduce and eliminate your debt.  Debt is the money you owe.  Let’s go over the different types of debt.  Real Estate loans constitute the largest form of debt for most people.  Real Estate loans are money making investments and you need to take into consideration your future cruising needs when deciding the best course of action in regards to these.  For example, if you are only planning to try cruising for a year, you may not want to sell your home, but instead choose to rent it out while you are gone.  Many people cruise for years on the rental income they receive from more than one property.  Still others simply sell their home, pay off their debts, and sail into the sunset with fewer responsibilities.  If you are unsure of which option is best for you, you should consult your accountant or a financial advisor to help you decide how best to use your real estate equity to help you achieve your cruising dream.
Another kind of debt is student loans.  Student loans are often a hefty percentage of many people’s debt load and it might be unrealistic to try to pay the whole amount off before you go cruising.  Paying back student loans is important, and you can continue to do this while you cruise by leaving a set amount in your bank account and arranging for automatic payment through a bank draft.  Make sure you leave enough in the account to make payments for the entire length of your planned cruising sabbatical.  Make sure if you are trying to arrange a minimum payment amount that you are paying a significant amount, enough that your principal is steadily reducing and you are not paying mostly interest, as this will get you nowhere except longer in debt.
If you have an automobile loan, pay it off as soon as possible, even if you have to sell your vehicle to do it.  If you want to be a cruiser, you can’t be the typical American that uses their vehicle as a form of self expression or an extension of their personality.  As a cruiser, you need to forget all the material facades and understand that the purpose of a vehicle is a practical one.  Your car transports you from place to place, in reality, it has no other purpose.  You can find a reliable, used vehicle for next to nothing, we usually pay no more than $1000.00 for a car, and maybe $2500.00 for a truck.  Then we sell them when we go long-term cruising again.  Credit card debt,  personal loans, back taxes, and all other debt needs to be reduced as much as possible before you take off because your financial responsibilities will be the one of the main factors in determining how long you can cruise.
Any debt that you still have within a year will have to be paid by cash reserves that you will leave in your bank account for that purpose and for the purpose of paying any monthly bills like insurance, a cellular phone, or storage units.  The less debt you have, the longer your cruising kitty will sustain your new cruising lifestyle.   Don’t forget as you focus on paying off your debt to pay yourself first by setting aside ten to thirty percent of your income and investing it in your savings.  A lot of the financial advice here is very basic, simple stuff.  Feel free to consult with your financial advisor to help you decide the best way to organize your finances while you prepare to go cruising.  In any case, simplification is an essential part of going cruising.  Paying off your debt and building your savings and money making investments will contribute heavily to your cruising success.