pay debt or save for trip?

[ReneeA]

We vacation, and we have debt. At one point, all but the mortgage was paid off, but DH was laid off for 9 months a few years back while I was still in nursing school. We used the card for gas, groceries and basic living expenses until I graduated & he went back to work.

I have a stressful job, work long hours, and my one and only splurge is vacation. I don't spend anything on clothing (my scrubs have been washed & worn so much you can see through them...good thing they're navy), I don't buy purses, don't go to bars or spend much on entertainment. We have a plan to get all but a car payment and mortgage paid off within a 5 year period. We're on track even with going on vacation every year.

There is not one thing wrong with that. People can be responsible & still have credit card debt. As long as you have a doable plan for paying your bills, you truly can do whatever you want with your money.

 

[pixie921]

First, let me say that if you are fine with the debt you have, I'm not criticizing that at all. I don't want this to be confused with me arguing with you about your personal circumstance because I wasn't there and I don't know.

When I personally have spoken with people who say Dave Ramsey's method 'doesn't work,' what has always been the case is that they did not want to make the sacrifices he suggests. They can't really afford to be a homeowner, but selling the house is not an option they want to consider. They don't want to drive a less than new car, or cut out massages or manicures or eating out.

Everyone has to decide what an acceptable level of sacrifice is for them. I can think of ONE time when Dave Ramsey told a couple on the radio he couldn't help them, and zero times when I have seen it real life.

I totally get what you're saying. And to clarify, I'm not saying Dave's methods don't work; all I'm saying is that 18 months is a goal that a lot of people (including us) couldn't reach. His principles are extremely sound, but like anything, can be taken too far (as in people telling me if dh's degree was "important" enough we should be able to magically make thousands of dollars to fund it fall out of the sky or else he wasn't "entitled" to do it).

 

[bopper]

To me this all depends on the kind of debt you have. If it is mortgage/car payments, then go ahead to Disney. If you have other credit card debt, then pay that off and don't go to Disney until you have saved up the money.

 

[mrsklamc]

I totally get what you're saying. And to clarify, I'm not saying Dave's methods don't work; all I'm saying is that 18 months is a goal that a lot of people (including us) couldn't reach. His principles are extremely sound, but like anything, can be taken too far (as in people telling me if dh's degree was "important" enough we should be able to magically make thousands of dollars to fund it fall out of the sky or else he wasn't "entitled" to do it).

Makes sense.

The other reason Dave Ramsey- and probably a lot of other people- are so adamant about 'debt free' is that they carried levels of debt that society said was 'workable' and it came crashing down on their heads.

Personally, I just like the freedom it's given us.

 

[DLgal]

A Disney vacation is NEVER a need. There are ways to take breaks without spending that much money. Plus setting a child up with Disney as their only coping mechanism is putting them in a horrible position should they ever not be able to afford it themselves.

If people who subscribe to the "no debt" philosophy had no self control, they wouldn't be able to do it.

I didn't say Disney trips were a coping mechanism. But, for us, we have tried "other" vacations, and they just don't work out as well for us. Our kids thrive on familiarity and routine, and they get that when we return to the same place over and over again. Every time we go somewhere new, it's a disaster. They have known DL their entire lives because they spent their first 7 and 5 years, respectively, visiting weekly, as a sort of therapy, since we lived so close. It's very important to our kids and to our family as a whole.

As for their future, there is a very high probability that we will have to support them throughout their adult years, so we are not setting them up for any kind of failure by taking them to Disney parks every year.

Disney has had a very positive impact on our family, and if the only way we can continue to go is by putting the trips on the credit card, so be it.

My point about the "no self control" is that there is really no legitimate reason to have no debt, be afraid of using credit cards, and saving every penny you have like some kind of hoarder. The people that feel the need to do this, IMO, have deeper issues that make it impossible for them to spend money wisely. I refuse to live my life like that. We have been "debt free" several times in our life. And, it doesn't make me feel any better about anything to not have a credit card bill to pay. It's not some huge burden lifted off my chest, because in the grand scheme of things, we only owe like $5k at any given time. No mortgage (we rent, and get a housing allowance that pays for it), no car payments, etc. I feel no different when I have a $0 balance for a few months or when I have a $5K balance. So, what's the point?

 

[DLgal]

I'm sorry your kids lives are so stressed. I hope they/you find a way irl to be happy. :/

Me too. Autism is a tough thing to live with. So is having a daddy in the military who has been deployed for more than half my kid's lives up to this point.

I am happy, and we try so hard to make happiness a priority for our kids, because at the end of the day, that's the most important thing for us. It's difficult, though, when your kids spend most of every day frustrated, crying, and worried about doing everything "the right way." It's also tough when your husband comes home from work stressed out to the max every day from his job. We all need a vacation every year. Doing without is not an option.

My childhood was a cakewalk compared to my own kids. I hate that. Disney is our happy place, and they spend the rest of the year looking at picture books, videos, etc. because when they can relive those moments, they get to forget about their problems for awhile.

 

[disykat]

My point about the "no self control" is that there is really no legitimate reason to have no debt, be afraid of using credit cards, and saving every penny you have like some kind of hoarder. The people that feel the need to do this, IMO, have deeper issues that make it impossible for them to spend money wisely. I refuse to live my life like that. We have been "debt free" several times in our life. And, it doesn't make me feel any better about anything to not have a credit card bill to pay. It's not some huge burden lifted off my chest, because in the grand scheme of things, we only owe like $5k at any given time. No mortgage (we rent, and get a housing allowance that pays for it), no car payments, etc. I feel no different when I have a $0 balance for a few months or when I have a $5K balance. So, what's the point?

Seriously? I'm a hoarder with deep issues that make it impossible to spend money wisely because I try not to spend money I don't have?

According to your other thread, you make a lot more money than my family so maybe that's why financial security is as important to you?

 

[mrsklamc]

I didn't say Disney trips were a coping mechanism.

As for their future, there is a very high probability that we will have to support them throughout their adult years, so we are not setting them up for any kind of failure by taking them to Disney parks every year.

Disney has had a very positive impact on our family, and if the only way we can continue to go is by putting the trips on the credit card, so be it.

My point about the "no self control" is that there is really no legitimate reason to have no debt, be afraid of using credit cards, and saving every penny you have like some kind of hoarder. The people that feel the need to do this, IMO, have deeper issues that make it impossible for them to spend money wisely. I refuse to live my life like that. We have been "debt free" several times in our life. And, it doesn't make me feel any better about anything to not have a credit card bill to pay. It's not some huge burden lifted off my chest, because in the grand scheme of things, we only owe like $5k at any given time. No mortgage (we rent, and get a housing allowance that pays for it), no car payments, etc. I feel no different when I have a $0 balance for a few months or when I have a $5K balance. So, what's the point?

First of all, I'm sorry you are dealing with all the stress you are dealing with. I have a dear friend with 3 boys with autism and it is anguishing. Thanks for your service to our country as well.

There is nothing at all wrong with it, but a coping mechanism is EXACTLY how you are describing Disney for your family. You lead extremely stressful lives and Disney vacations help you process that and enjoy your lives, and that is wonderful.

It also sounds like you are in a drastically different situation than the OP who describes her debt as 'considerable.'

Being debt free is not about hoarding every penny, it's about putting your money to work for you, not for a bank, so that when you don't have all those payments, you CAN go on vacation, etc. Many people's spending power is totally crippled by all the payments they have. Or, in my friend's case, making sure that she WILL be able to continue to provide for her autistic kids throughout a lifetime. So many therapies and things are not covered by insurance.

Many, many people are buying whatever they like and assuming they will always be able to so.

 

[ilovemk76]

Seriously? I'm a hoarder with deep issues that make it impossible to spend money wisely because I try not to spend money I don't have?

According to your other thread, you make a lot more money than my family so maybe that's why financial security is as important to you?

ITA

Saving $75K in 3 years and being able to afford a $4K mortgage is only possible with a very good income ($150K) . Getting an inheritance that paid off two cars is something most will never see.

We are far from hoarders, but keep thinking that way.


Colleen - Using a CC, like we do, for our daily expenses and paying it off at the end of the month is fine. Buying wants, that you cannot afford, and paying up wards of 20% interest is a very bad idea. Telling others that it is fine with you will not do it yourself is wrong in my book.

 

[hsmamato2]

That was when I realized those people were living in a completely different reality than me. Dh was working FOUR irregular part-time jobs (I was working full-time) and there was NO money to "cash-flow" anything but our daily needs.

it's not always possible to get out of debt super-fast if you don't have the flexibility in your income, that's all.

Sigh. I think the point of many pp's here (myself included) is that if you can even THINK about spending on a WDW vacation,*that right there is flexibility.* Enough flexibility so that you can contemplate spending that money,which means you have enough to play around with,and enough to decide if you want your DH to continue working all those jobs to pay for these things. If you both are working as much as possible, and you have 'just enough for your cash flow needs' then that is enough to live on,not enough for 'extras'. That's why I had problems choosing one repsonse for your poll- and I'm just an average frugal person who doesn't like to mess around with unnecessary debt.

 

[pixie921]

Sigh. I think the point of many pp's here (myself included) is that if you can even THINK about spending on a WDW vacation,*that right there is flexibility.* Enough flexibility so that you can contemplate spending that money,which means you have enough to play around with,and enough to decide if you want your DH to continue working all those jobs to pay for these things. If you both are working as much as possible, and you have 'just enough for your cash flow needs' then that is enough to live on,not enough for 'extras'. That's why I had problems choosing one repsonse for your poll- and I'm just an average frugal person who doesn't like to mess around with unnecessary debt.

Wondering why you are "sighing" and quoting me? I'm not the OP and never said anything about planning a WDW vacation ...

 

[Christen99]

That's a wide brush.

I think people who subscribe to a no debt philosophy and preach it do so because its had such a positive impact on their lives. It's put more money in their pockets, it's reduced financial uncertainty, it's improved their cash flow. And they want to share.

I'm not rabidly anti debt, although I don't think most people can afford credit card debt. If you can afford it and its how you choose to spend your money, that's fine, me, I'd rather make interest than pay it, and I'd rather use my money for shoes and vacations than interest, especially credit card interests (in the interest of disclosure, I maintain a mortgage because I make more on the market than I pay in interest, it's hard to find investments that are going to pay more than a credit card interest rate). And honestly, I don't get why people would choose to pay interest instead of having stuff. If your credit card debt is stable, it really wouldn't take much to pay it down, you are living within your means, just a little ahead of yourself. If its increasing, that isn't sustainable.

We live debt free because if the **** hits the fan, or my husband loses his job we are totally fine financially. The impact wouldn't be huge, we won't lose our house, we won't have to lose our cars or downgrade, we wouldn't have to uproot our kids. It has zero to do with a lack of self control in spending.

When I got pregnant with #2, I hated my job. I went out on bed rest, and I never went back to work. We didn't have to juggle finances to see if it would work on one income, it was never a consideration. My husband lost his job 2 months before our son was born, and instead of freqking out about house payments, car payments, credit card payments, etc. He and I hung out a lot, we spent time with our oldest son who was about to start kindergarten, and we didn't stress because we didn't have any debt. He stayed home with me for 2 months after our son was born, and didn't even attempt to look for a job because we were totaliy fine financially. He knew those precious newborn days would never come again, so he enjoyed every single moment of our son. He finally woke up one day, and decided he was ready to go back to work, made a few calls and had several interviews lined up within a matter of hours. He found a job within the week, and was comfortable going back to work (He's an IT Admin who loves his career). Our standard of living didn't change during those 4 months. Everything we had before not working was there after not working. The regular bills were always paid on time or early (we always paid twice what was due, at least one month before it was due).

He doesn't regret one moment that he spent with his newborn son, and adjusting to our new family. We had zero debt which made those memories possible without a care in the world.

Living debt free isn't a lack of financial control, but it really does provide the lack of worry over juggling debt, credit crds (who the hell would choose that??), and being a slave to your credit score. We have two special needs kids, and our copayments are approximately $1,000 per month. We are able to provide everything they need, and we don't have to charge it. People constantly ask how we can afford all of their treatments and therapies, and we can afford to do it because we don't have debt. There is no way we could if we were carrying a large amount of debt (I had almost 100K in student loans when my husband and I met, and he had 30k). We aren't rich, we aren't materialistic, and we live within our means.

 

[jodifla]

A Disney vacation IS NOT a Need for a happy childhood

Visiting a sick relative would be a need from an emotional point of view but one should still cut out other wants to fund as much as possible.

GVO treats mortgage and car payments differently. She does not push for a paid off house in 3 years. She presents percentages that are based on your income and then you get to do as you want with the percentages. You might want to check her out. She will help you see that a life with CC debt is not a life.

This is the most ridiculous thing I've ever heard.

And taking care of my sick father is a "need from an emotional point of view"? Most reasonable people would simply call it the moral and honorable thing to do.

I'd much rather have a few credit cards bills and a lifetime of travel under my belt than stay at home and count my money.

 

[Granny square]

This is the most ridiculous thing I've ever heard.

And taking care of my sick father is a "need from an emotional point of view"? Most reasonable people would simply call it the moral and honorable thing to do.

I'd much rather have a few credit cards bills and a lifetime of travel under my belt than stay at home and count my money.

Maybe I'm totally misunderstanding but I don't see an "emotional need" and a "moral and honorable thing to do" as being that different.

Jodifla it seems from what you said earlier that you are in general fiscally smart, savings, college plan for your son, etc. so in theory were you to cc a trip in the midst of that family difficulty, and loss a job etc you could have paid a dot sunk. The op (a troll?) used the word "considerable" and wanted to potentially add to that indebtedness. You and she seem a million miles away.

I do agree that no one needs a vacation. We may want them a lot. But if one is being literal no one needs a vacation.

 

[Colleen27]

I'll answer Colleen's question. Because something about spending money that isn't yours feels like stealing. There, I said it.

I understand the need for credit. I've certainly had mortgages, car payments, etc. I even carried a credit card balance once for a brief time when I felt like it was more important for me to have cash available than pay the whole balance. But, to me, credit card debt for the purpose of fulfilling "wants" just feels wrong so it's always been a goal to avoid that.

Although there are times debt is a "necessary evil" so to speak, that shouldn't mean people should consider it absolutely normal to put everything on credit while paying a minimal % of it and forget they are spending money they don't have.

Stealing is a non-consensual act, though. No one is stealing from lenders - they're willingly providing those loans and making good money to do so.

That's a wide brush.

I think people who subscribe to a no debt philosophy and preach it do so because its had such a positive impact on their lives. It's put more money in their pockets, it's reduced financial uncertainty, it's improved their cash flow. And they want to share.

I'm not rabidly anti debt, although I don't think most people can afford credit card debt. If you can afford it and its how you choose to spend your money, that's fine, me, I'd rather make interest than pay it, and I'd rather use my money for shoes and vacations than interest, especially credit card interests (in the interest of disclosure, I maintain a mortgage because I make more on the market than I pay in interest, it's hard to find investments that are going to pay more than a credit card interest rate). And honestly, I don't get why people would choose to pay interest instead of having stuff. If your credit card debt is stable, it really wouldn't take much to pay it down, you are living within your means, just a little ahead of yourself. If its increasing, that isn't sustainable.

I totally get what you're saying. And to clarify, I'm not saying Dave's methods don't work; all I'm saying is that 18 months is a goal that a lot of people (including us) couldn't reach. His principles are extremely sound, but like anything, can be taken too far (as in people telling me if dh's degree was "important" enough we should be able to magically make thousands of dollars to fund it fall out of the sky or else he wasn't "entitled" to do it).

That's what I was saying too - by "don't work" I meant "don't mesh with the family's goals, priorities, and other restrictions" not "fails even when followed to the letter". To use a close friend as an example - she's a teacher married to a teacher. Between undergrad and masters degrees they had about 150K worth of student loans between them when they met. I'm sure they could have paid it all off much more quickly if they had opted for a justice of the peace instead of a wedding, didn't buy their modest house, postponed having children (though they were already in their mid-30s when they started a family), etc. But DR's plan didn't work for them, not because it fails when followed but because following it means making being debt free the most important thing in life and they weren't willing to do that. And you know what, there's nothing wrong with that! They are on track to pay off the student loans with enough time left to pay off the mortgage before the kids start college, freeing up a great deal of cash-flow ability to help the kids reach adulthood without so much debt already weighing them down, and they've managed to do it while vacationing and enjoying life at the same time.

Makes sense.

The other reason Dave Ramsey- and probably a lot of other people- are so adamant about 'debt free' is that they carried levels of debt that society said was 'workable' and it came crashing down on their heads.

Personally, I just like the freedom it's given us.

Having read his books, I have a very hard time imagining that the levels of debt he talked about weren't ever regarded as risky. Lenders and sellers push a higher "acceptable" level of debt out of self-interest but I don't think society as a whole says that negative net worth is "workable" at all.

Colleen - Using a CC, like we do, for our daily expenses and paying it off at the end of the month is fine. Buying wants, that you cannot afford, and paying up wards of 20% interest is a very bad idea. Telling others that it is fine with you will not do it yourself is wrong in my book.

Living beyond one's means is a very bad idea. No one is saying "make the minimum payments and charge the trip". The OP presented a situation where they can afford to save for the trip by cutting back on the extra payments they're making, or they can continue making those extra payments but add debt for the trip. There is flexibility there that suggests to me that the trip is within their current means regardless of whatever past situation led to the debt, and if you recall I did ask a few other questions for clarification (like is there an emergency fund so a future crisis won't go straight to the credit cards and are their jobs stable).

As far as what we do or don't do, that's just an acknowledgement of our circumstances. For virtually all my married life we've lived on a single, variable, and frequently unstable income. As such my comfort level for my own finances if very different than it was when we had dual incomes with mine being as dependable as the tide, at which point I was far less debt-adverse. Now I do border on obsessive about keeping our monthly obligations to a minimum; even with little things like cell phones and cable service, contracts give me hives. I want to be able to cancel the luxuries and save those payments should we hit an unusually long bad patch.

 

[mrsklamc]

Having read his books, I have a very hard time imagining that the levels of debt he talked about weren't ever regarded as risky.

He doesn't give specifics, other than he was making over a million dollars and felt that the payments were very affordable.

 

[ilovemk76]

We have a considerable amount of debt that we have been paying off, but our 10th wedding anniversary is coming up and we want to surprise the family with a trip to our "other" home- WDW!
Do we save for the trip or pay off debt and then charge the trip!?!?

That's what I was saying too - by "don't work" I meant "don't mesh with the family's goals, priorities, and other restrictions" not "fails even when followed to the letter". To use a close friend as an example - she's a teacher married to a teacher. Between undergrad and masters degrees they had about 150K worth of student loans between them when they met. I'm sure they could have paid it all off much more quickly if they had opted for a justice of the peace instead of a wedding, didn't buy their modest house, postponed having children (though they were already in their mid-30s when they started a family), etc. But DR's plan didn't work for them, not because it fails when followed but because following it means making being debt free the most important thing in life and they weren't willing to do that. And you know what, there's nothing wrong with that! They are on track to pay off the student loans with enough time left to pay off the mortgage before the kids start college, freeing up a great deal of cash-flow ability to help the kids reach adulthood without so much debt already weighing them down, and they've managed to do it while vacationing and enjoying life at the same time.

$75K in loans for a teaching job was the problem. The earning potential for a teacher is not high enough, even in the past, to hand this large of a loan value. I am not sure exactly how old they are, but since you said mid-30s when they started their families, they could be early 40s. That was a huge amount of loans when they went. I am a little more than 10 year older than they are and DH's and mine loans combined were $21K. Neither of our parents paid anything toward our educations. Both of our degrees cost a little more than $50K combined. Where did they go to college?

Living beyond one's means is a very bad idea. No one is saying "make the minimum payments and charge the trip". The OP presented a situation where they can afford to save for the trip by cutting back on the extra payments they're making, or they can continue making those extra payments but add debt for the trip. There is flexibility there that suggests to me that the trip is within their current means regardless of whatever past situation led to the debt, and if you recall I did ask a few other questions for clarification (like is there an emergency fund so a future crisis won't go straight to the credit cards and are their jobs stable).

You really read much into that one sentence. Paying off debt could mean paying the payments and nothing more or it could mean paying many times the minimum payment. Only the OP knows and will not tell. I believe the OP may be trolling.

As far as what we do or don't do, that's just an acknowledgement of our circumstances. For virtually all my married life we've lived on a single, variable, and frequently unstable income. As such my comfort level for my own finances if very different than it was when we had dual incomes with mine being as dependable as the tide, at which point I was far less debt-adverse. Now I do border on obsessive about keeping our monthly obligations to a minimum; even with little things like cell phones and cable service, contracts give me hives. I want to be able to cancel the luxuries and save those payments should we hit an unusually long bad patch.

Our jobs are much like you describe. We have to live below our means so we can live during very little means.

Maybe I'm totally misunderstanding but I don't see an "emotional need" and a "moral and honorable thing to do" as being that different.

Jodifla it seems from what you said earlier that you are in general fiscally smart, savings, college plan for your son, etc. so in theory were you to cc a trip in the midst of that family difficulty, and loss a job etc you could have paid a dot sunk. The op (a troll?) used the word "considerable" and wanted to potentially add to that indebtedness. You and she seem a million miles away.

I do agree that no one needs a vacation. We may want them a lot. But if one is being literal no one needs a vacation.

Neither do I . I was just trying to use the word need and not call this a want, like a WDW vacation is.