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

Discussion in 'Budget Board' started by DreadpiratK, Aug 29, 2010.

  1. bettymae1121

    bettymae1121 sure. fine. whatever.

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    Please don't get me wrong, I'm not making light of your illness or any other challenge your family has faced. And I absolutely agree that being prepared like you were made a huge, huge difference for you. Had these things happend to someone in debt and with no savings, the outcome would have likely been bankruptcy.

    What I'm trying to say is that sometimes disasters that strike can be so huge that they overwhelm any preperations we make. We can do our best but sometimes you just can't overcome what life throws at us. Case in point, a lot of people that lost homes in Katrina. People that had huricane riders and flood insurance thought all their bases were covered. But the homeowners insurance said the house was a loss due to flood damage and wouldn't pay, and the flood insurance said it was wind damage and wouldn't pay, so the homeowner is stuck with a mortgage on a house that is unlivable. Who foresees insurance companies weasling out of their payments? Sure those people sued, but lawsuits take years, if not decades, and what do you do in the meantime? They did everything right (had the right insurance), and still lost it all, and no one can prepare for that kind of financial loss, unless they were independently wealthy to begin with.

    As bad as things get, there can always be something even worse lurking around the corner, and no one can possibly prepare for it all. It does come down to luck sometimes. That doesn't mean we shouldn't prepare for life's curve balls, but it's just not possible to cover all possiblities.
     
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  3. mom2val

    mom2val Can't wait to go back

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    In response to OP- airfair, tickets, dining plan, room are all paid in full before we leave. We bring cash and use our debit card for spending money, tips, parking at airport ect. Once trip is over we owe nothing and begin to save for next trip. That is how we define afford it.
     
  4. jodifla

    jodifla WDW lover since 1972

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    The problem with the budget board is you don't get the broad range of answers here for a question like yours. People here are very focused on the "never any debt" angle. The average American just doesn't live like this...most people use credit at least some of the time.

    For us, we make make sure we have substantial retirement savings, college savings, an emergency fund of about 8 months. We drive our cars 10 years or more. Our current cars have 14 and 15 years on them; we are just in the process of buying a newer car to replace one of them.

    But we don't dip into savings to pay cash for cars, for example. We get good financing and simple interest loans. Our last car loan was at 2.9 percent. Yes, it's costing us a bit in interest, but we got a great deal on the car, and we'd rather have the liquid cash on hand.

    We did pay cash for our boats. And today, we pay cash for most of our trips, using frequent flier miles and credit card rewards for our airplane tickets and free baggage.

    But if we had a great opportunity, but didn't have the cash saved up -- we'd use credit for the trip. We believe in living life now. You don't really know if you have tomorrow.

    I did rack up some debt a few years ago with very frequent trips to see my dying father. There was no putting off those trips -- it was now or never. It took awhile to pay them off, but I wouldn't change a thing.

    To me, moderation is the key...and you don't find a lot of moderation on the budget board.
     
  5. Brooknwdw

    Brooknwdw DIS Veteran

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    Wow. Great post! I admire what you've accomplished & appreciate the balance as well! :)
     
  6. padawans

    padawans DIS Veteran

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    I agree with everything you've done. You will get no arguments from me. You asked why I would pay the interest on a car. Its because my return on my investments is way more than than the 3% intersest I pay on my car. I don't put my money in a low interest savings account. I'm diversified in stocks, metals, 401k etc. My $300 car payment is hardly missed each month but I would definetly miss having the opportunity to use that 20,000 to trade stocks and make more money. Debt is not the devil as long as you keep it in moderation and use it wisely. Everything I buy including food I put on my credit cards and pay them off each month. I like the rewards. I am a really frugal person I rarely buy anything I don't need except trips to WDW which I have a special savings account for. I too feel I am doing what is right for our family and the future whether the economy gets better(doubtful) or continues to crumble. We just have different approaches.
     
  7. friskykitten

    friskykitten Mouseketeer

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    I agree with your post 100%. It does amaze me how many disers are completely debt free or pay every rotating debt off in full each month. Especially in this economy where so many have been hit with job losses and houses that are completely underwater in value. There are a whole lot of hurting families out there right now but we tend to only hear from those who have all their finances perfectly worked out. Which is never really perfect, if you think about it, depending on what happens in life.

    One could have three years of expenses set aside in an emergency fund but the reality is that if that person ends up out of work for four years then you could still say they were not prepared. And that could happen to anyone. Even those with no debt and an emergency fund. If you lose your source of income, go through your entire savings, then still have no income coming in once your savings are exhausted you are going to be in the same situation as someone else who happened to go through their savings faster than you did.

    On the other hand, those who have no debt and ample savings are going to be "richer" with the money they have not spent on interest payments. They are probably a lot less stressed than those who worry about debt in their life.

    The best you can do is be as prepared as you can possibly be for your own family. And realize that there will always be judgments made about what you decide. No matter what you do someone will agree with you and someone will condem you. Such is human nature. What one may think is affordable in a good economy may not be the same thing if the economy stinks. If the OP had asked this same question several years ago there would probably be completely different answers than what we are posting today.
     
  8. homercrispy

    homercrispy Earning My Ears

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    everyone has their own definition of what they can afford, and pay their bills according to their own systems.
    good luck to all
     
  9. jewjubean

    jewjubean <font color=deeppink>You can call me Bean<br><font

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    I pay my vacations like I pay my bills. If its 1,000 for a trip I want to take. I budget it into my "bills". I am a college kid that doesnt have alot of money, but I'm also going to "treat" myself with the extra money that I've earned through out the year.
     
  10. padawans

    padawans DIS Veteran

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    I couldn't agree with you more. Moderation is the key to everything in life.:thumbsup2
     
  11. rentayenta

    rentayenta <img src=http://photopost.wdwinfo.com/data/500/dm.

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    MTE! :rotfl2:
     
  12. dvcgirl

    dvcgirl DIS Veteran

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    Well, I think that these kinds of threads bring out those of us who are debt-free and follow that type of lifestyle.

    But I will say that in the past two years we have had tons of threads where people are reaching out for help because they are struggling. In the years before the crisis, there were hardly ever any threads about people struggling.
     
  13. Ava

    Ava DIS Veteran

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    Agree with this 100%. Our regular budget is VERY tight right now, but we are still planning a trip to WDW for next year. We chose for my partner to be a SAHM, even though we knew money would be tight on just my income, because we feel it's what's best for our family. We're paying for WDW with "found" money - money earned from doing focus groups, rewards sites, selling on eBay, bottle returns, our change jar, & Disney Visa Rewards. Could that money be put towards something else? Sure it could. But we're able to pay our bills on time every month, we have about 6 months of expenses in savings, I contribute to my 401k, we have no debt except my student loan (we rent so no mortgage & we don't own a car) - and we want to go to Disney, so we're working extra to earn the money to do it.

    I respect those who have chosen not to take any vacations or buy any extras until they reach certain savings goals, or who spent their young adulthood eating ramen in order to save their meager income for a rainy day, but that's just not the way we choose to do things. We're frugal & careful about what we do spend our money on, but we wouldn't be happy spending years never going anywhere or surviving on mac & cheese just to save for the "what ifs" of life. I'd rather have the experience & memories of taking my toddler to WDW than have an extra $2000 in the bank.
     
  14. friskykitten

    friskykitten Mouseketeer

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    Trust me when I say I am very envious of those who are debt free. And we are trying to follow their example and get there ourselves. Maybe not completely debt free as we will probably always have a car loan or credit card.....something to keep the credit score alive.

    We were one of those who reached out to the Disers over a year ago and got wonderful advice and support.

    I do admire those who were debt free even before the economy went south, such as yourself dvcgirl. And we should admire those who have had the guts to come here and ask for advice and been honest about their situations. Whether they were foolish, overly confident or whatever in their financial situation some of the nasty comments made have probably kept others from posting about their own situations.

    My previous post just mirrors what many others have been thinking from time to time. All of a sudden everyone seems to have no debt and pay off their cards in full each month. disney4us2002's post said it well and with humor and jodifla hit on it too.

    I still get some of my best ideas from this board and the people who share their thoughts and advice. That is when I can find some time away from work and the family. :cheer2:
     
  15. a1tinkfans

    a1tinkfans Spreading Some Pixie Dust Today!

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    My idea of "affording it" means I have the money available to cover the cost....and I want to spend it :rotfl2: :rotfl2:
     
  16. Swimalie

    Swimalie DIS Veteran

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    You said it very short and sweet but, if I may, I'd like to add something.

    "My idea of "affording it" means I have the money available before I buy it to cover the cost... and I want to spend it"

    Thank you.
     
  17. dvcgirl

    dvcgirl DIS Veteran

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    I hear what you're saying. And I agree with you....that an awful lot of people are jumping on the "debt-free" bandwagon these days. And that's because a lot of people have been caught this time around with a lot of debt and realize that it really does create an incredible amount of risk in their lives. And so even if they didn't experience a job loss in The Great Recession....they probably know someone who did. Or they know someone with a giant mortgage and a house that is now worth less than they owe....or someone with massive student loan debt who can't find a job....or tons of CC debt and nothing to show for it....it goes on and on.

    It's become fashionable to be debt-free when just a few years ago, those of us who were living that way were labeled as simplistic or even foolish/stupid for not using OPM (other people's money) to leverage up our lives.

    I think that living debt free is sort of like losing weight and sticking to a healthy diet, or quitting smoking and never going back. Sometimes people who are new to the concept come across as sort of "anti-debt evangelists".....if you know what I mean. Still, I think it's great that we are moving in this direction and away from the insanity we've seen in last decade. Sure, we're going to experience much slower GDP growth as a nation as Americans pay down their very high levels of debt, but in the long run, we'll be stronger for it. Hopefully Americans are smart enough to never go back to their old ways.....
     
  18. punkin

    punkin <font color=purple>Went through pain just to look

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    :rotfl: That is so true.

    We have debt. We have a hefty mortgage and one car loan (at 0%). I am not averse to debt. I do believe it has its uses. It is not evil. Credit cards are not evil. However, I have been watching the out of control debt addiction of some people over the past decade and have no desire to do that either. When the bubble blew up, we were hurt financially, but not devastated because we had never leveraged to that extent.
     
  19. CloveLeaf

    CloveLeaf Earning My Ears

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    They are still in better position financially than someone with just one year's expense saved up, or even worse just 3 months' expense.
     
  20. padawans

    padawans DIS Veteran

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    I would love to be debt free, but not willing to make the sacrafice. My kids are 6 and 8 If I were to eat "rice and Beans" like dave likes to say for the next 10 years to pay off my mortgage. I may have a great retirement but my kids would have a really crappy childhood. Not to mention I woud miss out on some great vacation memories with my kids. Definetly not worth it. You gotta enjoy life just not go to overboard.
     
  21. kristenrice

    kristenrice DIS Veteran

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    First of all, I only read the first two or three posts in this thread so I have no clue about any subsequent discussion.

    We have a direct deposit set up into a vacation savings account. We deposit what amounts to about 4% of our monthly income into that account. On top of that, I take advantage of whatever rewards programs I can to earn vacation money. We have the Disney Visa, American Express Blue Sky and Discover credit cards (all paid off monthly, in full; only the AMEX has an annual fee of $35) and I also participate in online programs like Sunshine Rewards and MyPoints.

    When, and only when, we have enough funds between the rewards and savings, then we will take a vacation. I plan our vacations at least a year in advance. I put together an estimated budget (usually a little high) and I am fairly accurate at predicting if we will have enough to do what we want to do when we want to do it.

    In April, we went to WDW over Easter. We drove down and our total trip was 9 nights. I needed less than $800 from our vacation savings account since everything else was covered by rewards program earnings.

    Our next vacation is planned for April 2011. We are going to HHI for 5 nights (with 2 more on the road). My projected budget is $1600. As of today, I have accumulated $926 in rewards alone. Based on my projections, we should have enough "money" in rewards to cover the entire trip and the vacation savings account can go untouched.

    When I mentioned this to my mom, she made a comment about how it "must be nice to have all that money". In reality, there is only about $350 that could be converted to cash. Everything else is in the form of specific credits or gift cards. This makes it very easy to justify and "afford" a vacation. I can't spend the "money" on anything else so it goes towards a trip:).
     

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