Countdown to Financial Fitness: Local Transportation

Countdown to Financial Fitness: Local Transportation: Most cruise lines do not usually provide a lot of information for passengers to get around on their own in the ports of call. The shore exc...

Local Transportation

Most cruise lines do not usually provide a lot of information for passengers to get around on their own in the ports of call. The shore excursion business is too lucrative.

Sometimes you can research options in advance. Sometimes you'll discover them by accident.

For example, we just returned from a Baltic cruise, where we had a stop in Copenhagen. The last time we were there (over 15 years ago), the cruise ship docked within walking distance of many attractions. Now there is a new cruise port out in the middle of nowhere. For those not booked on a high-priced excursion, the cruise line was charging $18 for a shuttle from the port to the downtown area.

Standing on the upper deck, surveying our surroundings, trying to decide what to do for the day, we noticed what looked like a public bus stop just outside the cruise port. A city bus pulled up; people got off and on.

When we disembarked the ship, we walked past the solicitous taxi drivers, Hop On Hop Off bus sales people, and the now-loading ship's shuttle to visit a small Tourist Information office, where we asked about the local bus service. The agent gave us a free map that showed where the various bus lines went. He advised us a two-hour ticket cost 20 DKK, slightly over three U.S. dollars. He was able to sell us the tickets and accepted credit cards, USD, or Euros as well as Danish kroner. So we took the public bus right into the center of town, for a fraction of what the cruise line's shuttle bus would have cost us.

We had a similar experience in Stockholm, where we'd embarked on the cruise two weeks earlier. At the airport, we discovered Flygbussarna, the airport bus that takes you directly to the Central Station for 110 SEK (about $15 USD). We found out you can buy tickets online for 99 SEK (just over $12 USD), so we took advantage of that savings.

At the Central Station, we learned we could catch the Number 1 bus (a couple other lines go there as well) to the Frihamnen cruise port. Tickets are sold in a magazine store inside the railway station, kind of like a tabac in France. A single ride costs 30 SEK (reduced to 20 SEK for over age 65 or under age 20). Since our cruise ship had an overnight stay in Stockholm before we set sail, we opted for the 24-hour ticket (120 SEK regular, 80 SEK reduced--around $10 each). This enabled us to check in, stow our baggage, and then go back out to explore the city. We even went out again the next morning, took a tour of Parliament, and got back on a bus headed for the cruise port before our tickets turned into pumpkins.

It's about a 10-minute walk from the Frihamnen bus stop to the cruise port check-in area, so if you're mobility-challenged or have a lot of luggage, changing buses and schlepping your bags that far might not appeal to you. If there are several people in your party, the cost of a taxi might be less prohibitive (about $100-150 from the international airport to the cruise port; most likely a lot less from Central Station).

But for able-bodied budget travelers like us, the bus adventure suited us just fine. We can find lots better ways to spend our savings.

What money-saving travel tips can you share? I'd love to hear your comments.

Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.

Countdown to Financial Fitness: Know Your Tolerance for Risk

Countdown to Financial Fitness: Know Your Tolerance for Risk: You've paid down debt, built an emergency fund, and now you've finally saved up some money to invest. But before you hand your hard...

Know Your Tolerance for Risk

You've paid down debt, built an emergency fund, and now you've finally saved up some money to invest. But before you hand your hard-earned dollars to a broker, determine your tolerance for risk.

You can find sample "risk tolerance" questionnaires on the internet. It's almost like a personality test. If you work with a financial planner or investment counselor, he or she will most likely have you take such a quiz, or at least ask you similar questions before setting you up with a suitable investment plan.

Besides your age, income, assets, expenses, and plans for your money, you will be asked questions like, "What percentage of your investment are you prepared to lose?" and "How important is it for you to keep up with inflation?" "Can you stomach putting some, or all, of your principal at risk?" Some quizzes ask you what synonym for "risk" comes to mind. Danger? Opportunity? Thrill? You might be given scenarios to choose from: an investment that would never go down more than 10% but would only gain a maximum of 5% versus an investment with the potential of returning 30% but could lose 30% or more. Or you might see a question like, would you prefer Door Number 1—$1000 as a sure thing—or Door Number 2, with a 25% chance to win $10,000?

It's important to understand how you react to risk before choosing an investment. If an investment constantly keeps you awake at night, it might not be appropriate for your portfolio. If you have to check your account balance hourly and rush to sell your stock the first time its price goes down, investing in the stock market might not be the right choice for you. The stock market goes up and down, and if you get euphoric and buy when it's up and panic-sell when it's down, you will lose money.

The younger you are, the more risk you can handle with long-term investments, such as a retirement fund, provided you have the courage to stay invested despite market fluctuations. Historically, the stock market has yielded better returns than bonds or cash equivalents. Downturns actually provide opportunity to grow your wealth by purchasing more shares of stock or a mutual fund at a discount—if you stick to a plan of investing regularly. (You can do this automatically by reinvesting dividends and capital gains, i.e., dollar-cost averaging.)

What some risk-averse investors don't realize is that, by not investing in stocks or more aggressive mutual funds, by keeping all their money in cash accounts where the principal is secure but growth is almost non-existent, their nest egg may not keep up with inflation. And despite their cautious approach, they still won't have enough money to live on in retirement. So they are accepting risk whether they like it or not.

The closer you get to retirement, to the time when you will begin living off your assets, the more conservative you'll want to become with your investment allocation. Like with your emergency fund, you'll no longer have time to weather a major downturn, and if you have to start withdrawing the money, you'll be locking in losses.

Risk and reward go hand in hand. Aggressive investors are willing to risk losing a chunk of money in exchange for the prospect of greater reward. Conservative investors prefer to preserve their principal, but in exchange for that security, they must accept more modest returns.

What kind of investor are you, and have your views changed over time? I'd love to hear your comments. 

Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.

Countdown to Financial Fitness: The Emotional Side of Spending

Countdown to Financial Fitness: The Emotional Side of Spending: Most people understand that overspending can wreak havoc with their financial goals. Spend less than you earn, don't take on unnecessar...

The Emotional Side of Spending

Most people understand that overspending can wreak havoc with their financial goals. Spend less than you earn, don't take on unnecessary debt. Our rational mind gets it.

But there are external forces at work, out to undermine our resolve. Advertising is notorious. Look at the beautiful, happy couple using this product. Translation: I, too, will become beautiful and happy if I buy this product. My life will be perfect, just like theirs.

My movie idol endorses that product. It must be good.

And we care too much what other people think. The old adage, "Keep up with the Joneses," comes into play. Everyone on my block drives a new car. What will the neighbors whisper to each other if I don't trade in my five-year-old Honda for the latest Lexus? I want them to know I'm doing just as well as they are—maybe even better.

Even if you don't care what others think, your children do. Your child needs designer sneakers. Do you want him bullied at school for wearing some uncool generic brand? What will his friends say about him—and about his parents—if he doesn't upgrade to the latest iPhone? And don't be surprised if he makes you park that five-year-old Honda down the street when you pick him up.

Some people equate love with how much money they spend on others. You buy the flashiest, most expensive bouquet so the recipient won't think you're cheap, or that you don't really love her. I once had a vacuum-cleaner salesman tell me I was jeopardizing my family's health, that I must not love them, because I wouldn't buy his over-priced product.

Guilt is another reason people overspend. You miss your child's game, so you make it up to her by buying her that fancy new toy she's been talking about. You fight with your wife and then try to make amends with a pair of diamond earrings. You lend your sister money you can't spare because she reminds you that you were always the favorite, the reason she could never catch a break. You invest in a cousin's ill-conceived start-up because he's family, and you don't want your refusal to help to be the reason his business fails.

We spend to treat ourselves, to celebrate a victory or other joyous event. We indulge in "retail therapy" when we're depressed.

And if something is billed as a bargain, we can't resist, because we want everyone to know we are savvy shoppers. Save 75%! Buy a pair of $400 shoes for only $100! Hurry, before the deal disappears! Of course, if you didn't plan to buy those shoes in the first place, you could save 100%, and use that $100 for something you really need.

My husband and I used to drive past a furniture store that had a "Going out of Business Sale" sign up every week. A year later, they were still having a "Going out of Business" sale. We joked that they must have made enough money from the "Going out of Business" sales to stay in business.

Product placement is also designed to lure us into forsaking our budgets. Necessities like milk are located at the back of the grocery store. Impulse indulgences—a mouth-watering candy bar you've seen advertised, a magazine with a salacious story about the latest celebrity romance, lottery tickets promising you instant wealth—are right by the register, so the cashier can ring them up before you've had time to decide you really don't need them.

One of the lessons I learned in Weight Watchers is, before taking a bite, ask yourself why you are eating. If the reason is emotional and not hunger, stop. Visualize your future slim, healthy self. Think again about what you must do to get there. This lesson can be applied to spending as well.

What tips can you share about controlling spending? I'd love to hear your comments.

Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.

Countdown to Financial Fitness: Navigating Cuban Currency

Countdown to Financial Fitness: Navigating Cuban Currency: I returned last week from a cruise to Cuba, and I wish I had done more research on that country's currency system before I left. I ...