What do you mean by 'afford it'? Seriously..

[Marionnette]

Originally Posted by disney4us2002

Didn't you know here at the Dis, EVERYONE pays their cc off monthly. NOONE carries a balance, lol.

Afford to me means we bring in more than we spend each month. I do not insist on having cash for a vacation that may cost $5K or more. If it takes me several months or even a year to pay it off, so what? We have stable jobs, plenty of savings for retirement, an emergency savings acct of 3 months' income. How I choose to pay for my vacations doesn't impact anybody but me (my family) so why does it matter?

Im glad that works for you. But I would prefer to take my vacations knowing that everything is paid up or covered before I step on the plane. To each his own. Ill collect interest. You can pay it.

[Katy Belle]

Funny, DH and I were just having a conversation about what "afford it" means. We just ordered a new Expitdition and someone else had an Eddie Bauer Edition Expedition and DH said we "couldn't afford" that. I said we "choose not to spend the extra money" on that edition.

We are savers, not spenders, and are on track to fund college for our 3 children and retirement. So... we "could afford" most anything....but choose to spend our money on other things, or save for other things. The bank says we "can afford" or qualify for a loan on a house that is 3 times what we feel we "can afford" or are willing to spend.

I think it is more socially acceptable to say "we can't afford it" rather than "we choose to not spend our money on that," but I feel they are sort of mixed up.

Interesting topic!

[KandD]

Afford it to ME means that I can pay for it without taking money out of my emergency savings account. I am paying for grad school (I will graduate in March 2011 hopefully without any student loans-undergrad or grad). My boyfriend and I have a house (he pays the mortage and some of the bills-I pay the rest of the bills). I work fulltime plus two part time jobs, right now I am really wearing myself thin but graduating without any debt is important to me. However I do want to enjoy life so we do save for trips but if I couldn't pay for school or if we had to take money out of the emergency savings account, then we would not be going on vacation.

I put things on credit cards but I pay them off monthly (or until 0% APR runs out). Having no debt is important to me as my boyfriend and I are going to get married within the next year or so and I don't want to start our marriage with any debt.

[MrsPete]

Whether you're talking about a vacation, a new car, or a new pair of jeans, "you can afford it" means -- to me -- that the purchase fits into your financial circumstances. That means both long-term and short-term.

Just saying "I have the cash to cover it" isn't enough. For example, I could pay cash for a new BMW right now . . . but I know that I've got to put braces on one child soon, and the other is heading to college in two years, so I'd be much better off to hold onto my cash (and adding to it!) and keep driving my 2-year old Honda -- especially because I happen to love my car! That's just an example.

Different purchases require different criteria, but these are some typical questions I'd ask myself before deciding whether I can "afford it" or not:

1. Do I need this item? How badly do I need it? If I don't buy it, what will happen?

2. Is this particular item a good value, or could I get a similar product (perhaps used?) for less money elsewhere? Would I be just as satisfied with an older model or a simpler model? Could I borrow or rent this item rather than buying it myself?

3. What other expenses do I have coming up soon? Yearly insurance? Christmas presents? New tires? If I spend on this item, will I be short for any of those things?

4. What does my cash flow look like for the next few months? Do I have the money to pay for this item? Considering my overall financial goals, should that money to earmarked for anything else, or is it really money that's okay to spend?

[disfan07]

You have not been on a vacation in 3 years but you have three listed in your signature (2008, 2009 and 2010). Aren't they vacations?

Not that it's any of your business but we didnt pay for any of those. All of those trips were either with my grandparents or aunt, uncle and cousin who paid for everything and they were overnight trips to DL. We live an hour away from DL. We would drive down around 8AM and drive back around 5PM thr next day.

We havent been ona vacation that WE have paid for in 3 years because we havent had the money. We've just been lucky enough to have relatives to go with for the weekend.

[disfan07]

Just meant as a friendly, helpful tip, but check out car loans via the dealer or banks. Most of the time the interest rates on car loans are a lot lower than putting it on your CC. Might save you some money!!!

Thanks. Yeah we did that this time around with the car. My car was totaled in 2008. We had to buy a car before we got the money from the insurance so we just put it on our credit card since we knew it would be paid of within the next couple of weeks. But we made the decision to trade in that car this past march (it was a recalled toyota camry) and we got a loan through carmax this time.

[Kaler131]

I work extra hours specifically to pay for a WDW (or any other vacation). My DS makes a LOT more money than I do, so we use his income to pay our mortgage, car payments, etc. and my income pays other bills and pays for our vacations. I always have our trips paid for in cash at least a month before we go.
My co-workers always know when we have a trip planned because I volunteer for extra assignments and pick up any unwanted shifts and work lots of extra hours....lol!!

[crisi]

Originally Posted by MrsPete

Whether you're talking about a vacation, a new car, or a new pair of jeans, "you can afford it" means -- to me -- that the purchase fits into your financial circumstances. That means both long-term and short-term.

Just saying "I have the cash to cover it" isn't enough. For example, I could pay cash for a new BMW right now . . . but I know that I've got to put braces on one child soon, and the other is heading to college in two years, so I'd be much better off to hold onto my cash (and adding to it!) and keep driving my 2-year old Honda -- especially because I happen to love my car! That's just an example.

Different purchases require different criteria, but these are some typical questions I'd ask myself before deciding whether I can "afford it" or not:

1. Do I need this item? How badly do I need it? If I don't buy it, what will happen?

2. Is this particular item a good value, or could I get a similar product (perhaps used?) for less money elsewhere? Would I be just as satisfied with an older model or a simpler model? Could I borrow or rent this item rather than buying it myself?

3. What other expenses do I have coming up soon? Yearly insurance? Christmas presents? New tires? If I spend on this item, will I be short for any of those things?

4. What does my cash flow look like for the next few months? Do I have the money to pay for this item? Considering my overall financial goals, should that money to earmarked for anything else, or is it really money that's okay to spend?

Agreed - also...."what am I giving up for this?" If I have to give up something I want more than a Disney vacation (while meeting my responsibilities - which for us are college, retirement funding and savings) then I "can't afford it" - or - more properly "choose not to afford it" because I'm choosing to afford something else.

[Swimalie]

Originally Posted by Katy Belle

Funny, DH and I were just having a conversation about what "afford it" means. We just ordered a new Expitdition and someone else had an Eddie Bauer Edition Expedition and DH said we "couldn't afford" that. I said we "choose not to spend the extra money" on that edition.

We are savers, not spenders, and are on track to fund college for our 3 children and retirement. So... we "could afford" most anything....but choose to spend our money on other things, or save for other things. The bank says we "can afford" or qualify for a loan on a house that is 3 times what we feel we "can afford" or are willing to spend.

I think it is more socially acceptable to say "we can't afford it" rather than "we choose to not spend our money on that," but I feel they are sort of mixed up.

Interesting topic!

Exactly. People often say "can't afford" when for us it's that we choose not to spend money on something. We're looking in to buying a new car next year and we're looking in to the extras right now. So we're looking in to what are good values and what we feel are wastes of money. Could we afford to pay cash for a BMW? Yes but that is not a wise decision. Instead we can pay cash for a Forrester and save the rest. Okay, so we might splurge on a moon roof but it's a car we plan (barring no accidents) on having for more than 10 years and a $300 moon roof is worth it to us. We've saved over the last 10+ years with our used car to afford that 1 luxury.

[Colleen27]

I probably have a more flexible definition than most budget boarders, because we do live on a modest income and try to balance living well now with saving for the long run. There are probably those who would say we can't really afford the trips we take, because our retirement and college funds could undoubtedly benefit from any extra we could throw that way, but we're not willing to focus completely on tomorrow at the expense of living/enjoying today.

We can afford something if we have the cash to pay for it without dipping into our emergency fund or postponing other payments. We don't have credit cards so having enough liquid savings to cover our high insurance deductible and living expenses for an extended period is non-negotiable, but we don't necessarily max out all our long term savings plans before taking a vacation or buying a new "toy".

[Colleen27]

Originally Posted by Katy Belle

I think it is more socially acceptable to say "we can't afford it" rather than "we choose to not spend our money on that," but I feel they are sort of mixed up.

Weird, isn't it? But so true.

[MaleficentandGoons]

Afford means CASH in hand. That is I bought it, do it whatever, I don't have to reorganize my bills or not pay one. I think the word budget is miss used by many. I consider budget to be setting up a plan of action with your money. When things are being paid, whats coming out of the account when.

When it comes to vacation our budget is mostly thought of ahead of time so we know how much cash we want to carry and how much we want to just debit each day since or bank has a max on how much you can use daily. I think it's sad to see people eating every meal in their room, eating tuna fish for a week, limiting their park days.. that's just sad. How is that fun? How are you enjoying life, why are you living beyond your means for a theme park ? Why are you making your family miserable for the mouse?

[cseca]

We budget for everything. And if the vacation can be covered by the vacation budget then we can afford it.
If not, then we can't. Easy peasy...

Do we use CC? Absolutely! I love the free 1%-5% back they give out... Some years we could get up to $300 of free $.
I just don't give them any interest $ ... so banks pretty much hate me.

[padawans]

My dh and I have seperate checking accounts. He saves for emergencies and retirement ie IRA,401k and stocks. I put 25% of my paycheck in a vacation savings account. It works well but I usually take advantage of the 6 month interest free on mydisney visa why not its free money. Then at the end of the 6 months I pay off whatever is left on the balance with vacation savings account. I never pay more for a vacation than I have in my vacation savings account. To me that would be foolish.

[dispor]

Originally Posted by disfan07

Not that it's any of your business but we didnt pay for any of those. All of those trips were either with my grandparents or aunt, uncle and cousin who paid for everything and they were overnight trips to DL. We live an hour away from DL. We would drive down around 8AM and drive back around 5PM thr next day.

We havent been ona vacation that WE have paid for in 3 years because we havent had the money. We've just been lucky enough to have relatives to go with for the weekend.

I was wondering the same thing, and I think it was a valid question given the topic. When people are talking about the sacrifices they make, and someone says they haven't TAKEN a vacation in three years, that gives a very different picture than what was actually taking place. Again, given the discussion, I wonder why you didn't phrase it differently. It's kind of like someone saying "I don't even have a mortgage," when in fact they inherited the house they live in. KWIM?

I also think that most people have never been offered a vacation (or two, or three) completely paid for by another person, hense the confusion. I agree that it is noone else's business how you spend your money, but I do appreciate that you clarified the circumstances for us.