Money Dock: Money woes averted with a little planning

Oct 24, 2020 by Alex Kempin

This month, I would like to bring some real world examples to the column. Thus far, I have written about emergency funds, financial independence and the importance of saving and investing. My intention for this article is to showcase some real clients I have come across to help bring some of those concepts to life. (The names have been changed for privacy.)

Deckhand David was actually my first client, and I probably learned much more from him than he did from me. A few days prior to contacting me, he was dangerously close to signing an investment contract drafted up by a major yachting investment firm. Although I had heard of the firm before, I had never been able to analyze their investments or contracts since I wasn’t a client. 

Like most yacht crew, through no fault of their own, investment contracts, financial jargon and investing practices are foreign. Schools and media fail to teach and broadcast financial literacy and, consequently, newly inducted yacht crew earning a full salary fall prey to ill-advised financial advice. Despite David’s intentions being good and his actions progressive, the investment contract he was close to signing could have been very problematic. 

Once I had read the contract and explained its advantages and disadvantages, David decided to instead invest the money himself in index funds. Compared to what the contract offered, David is well ahead in returns and most critically, he’s learned how to manage his own money successfully. 

I will explore the intricacies of investment contracts and what to look out for in another article but for other crew in David’s position, it is vital to understand what the contract says before signing and trusting someone else with your money. 

Deck/Stew Jess is a veteran yachtie and has earned great money throughout her career. However, like most crew, she struggled with saving and subsequently has little savings and has not invested much. She is a self-declared spender and admits to paying for group bills to avoid awkward conversations and failing to ask for money she is owed from friends. 

Jess was actually in debt by a fairly large sum when we met, and our challenge was to change her spending habits and encourage saving. Financial management doesn’t always mean investing in the stock market or buying property. To some, it simply means starting a savings account, which was the case with Jess.  Everyone is at a different point along the road to financial independence. 

With Jess’s busy work schedule and intermittent internet, we required a simple yet effective approach. All Jess did was set up a direct debit from her spending account to her debt account. So, each month, a percentage of her salary was automatically plunged into her debt account. Two major things happened here. First, she became used to living and spending only what was available in her newly slimmed-down account. And second, her debt was being paid off each month and her interest was reducing. Further, anytime she receives a tip, she shoots that into her debt. 

Jess’s debt is now 75% smaller and she’s on track to being debt-free within six months. The automated money transfer trick will continue and as soon as she earns the debt-free title, she will begin to build her savings account.

I cannot recommend enough the direct debit trick. It happens automatically and continues long after you’ve forgotten about it. It is especially helpful for debt reduction or saving for a specific purchase. 

Lastly, there is absolutely no shame in debt. Money is a difficult topic and difficult to manage. For those crew who need assistance with debt management, check in with me or follow the simple steps outlined in any credible online financial blog. 

Bosun Alex Kempin has worked on yachts for more than three years and combines his passion for personal finance and his degree in psychology to share personal finance information for yacht crew at or themoneydock on social media. Comments are welcome below.