pay debt or save for trip?

[disykat]

I think most of us are assuming that the OP is talking about credit card debt, not mortgage, a car, or even a HELOC for home repair. I agree it is normal to have those kinds of debt and still vacation.

What many of us are assuming that the OP is talking about is the kind of "I want/need things I don't have enough money to pay for" credit card debt with no asset behind it. There is a difference.

 

[chimilady]

Virtually everyone I know has debt when in their child-rearing years -mortgage, car payments, orthodontics, and yes, credit cards - and while it is easy for an expert who has made millions on his advice to say "Don't vacation until the debt is gone", Dave Ramsey (or Suze Orman if you prefer) isn't the one who will be left with the "what if"s and regrets when that debt-free someday that we're all supposed to be living for doesn't come until the kids are too engaged in school and other activities to make time for family travel or until the nest has emptied. Balance is key and I think that gets forgotten by many of the anti-debt brigade.

Dave Ramsey says very often that most people who do his plan are debt free (aside from their mortgage) in 18 months. For us, it was less than a year, 8 months to be exact. Waiting 18 months even 2 years is not the end of the world. Teaching your child about consequences and responsibility changes the way they will look at money and prevent them from making the same mistakes as the parents.

 

[Colleen27]

Dave Ramsey says very often that most people who do his plan are debt free (aside from their mortgage) in 18 months. For us, it was less than a year, 8 months to be exact. Waiting 18 months even 2 years is not the end of the world. Teaching your child about consequences and responsibility changes the way they will look at money and prevent them from making the same mistakes as the parents.

I think that is more indicative of the demographic of his fans more than anything. I've read his books, and I feel like they're directed heavily towards above average earners with a bad case of "stuff-itis" and poor money management skills who need to reprioritize and restructure, but who can readily afford to "get gazelle" about it. Not that there's anything wrong with that - anything that helps people live better lives is a net positive in the world IMO - but it falls flat when you try to apply the same standards to people living on average or below average incomes and those who have had to accumulate sizable student loan debt to secure a stable income.

 

[ManyMinnie]

There is a difference in having "debt" and having "significant debt"

I'd say most people (in real life) likely have a mortgage payment as well as a car payment or 2. If that is your debt, then I'd fully agree that taking a vacation (be it big or small) is fine.

However, if I have the above plus other signifcant debt (ie high rate credit cards)....then I feel that you shouldnt be taking a big Disney vacation, even if it is your 10 year anniversary. As the OP states, Disney is their 2nd home --- which implies numerous trips in prior years. Perhaps the past Disney trips are the reason for some of this debt?? Skip the trip this year and put whatever money they were going to spend (or charge) on the trip towards their existing "significant" debt and go to Disney in a few years. You can still take a weekend someplace and spend a few $'s while having family time without going to Disney and spending thousands of dollars.

 

[crisi]

I'll add to a vote to colleens it depends, and think her list of considerations is a good one. However, the few clues we have "considerable debt" and "second home" imply that the outcome of considering all those factors would be the majority advice of don't go,

(Eliza, I'm so very sorry. We lost my brother in law ten months ago and my husband is still in a pretty deep stage of grief).

 

[ilovemk76]

Having credit card debt is not a way of life for those in the hold reading ages. A mortgage or rent is very likely. A car payment is too unless you can use some sort of public transportation or drive a clunker. Braces are usually payed on installments over the life of the treatment. This makes sense the same way paying a contractor to work on a home is paid in installments. Nobody would pay 100% of the bill before any work is done.

Credit cards are not like the others. You are brainwashing yourself if you think that CC debt is the way to raise a family.

Virtually everyone I know has debt when in their child-rearing years -mortgage, car payments, orthodontics, and yes, credit cards - and while it is easy for an expert who has made millions on his advice to say "Don't vacation until the debt is gone", Dave Ramsey (or Suze Orman if you prefer) isn't the one who will be left with the "what if"s and regrets when that debt-free someday that we're all supposed to be living for doesn't come until the kids are too engaged in school and other activities to make time for family travel or until the nest has emptied. Balance is key and I think that gets forgotten by many of the anti-debt brigade.



I think the mental can be worse than the physical. DH is in his 40s and still does the 60-70 hour weeks when needed because he's in a line of work that is very seasonal/weather-dependent. But when it drags into more than a couple of those weeks in a row it really wears him down mentally because he gets to feeling like he's only a paycheck to the kids. He's left a couple of jobs in the past because the hours were incompatible with any sort of hands-on role with our children - at one of those jobs the tipping point was when he didn't get to see a single Little League game for either of our then two children because for all of April to July his hours were such that he wasn't home before our 6pm games had ended and couldn't get even a single Saturday morning off. Physically he can still handle it well enough but since becoming a parent he can't handle it mentally. He doesn't want to be leaving before they get up and coming home when they're going to bed 6 days a week for any extended stretch of time.



That's what it is all about - balance. A little for the past (debt), a little for the future (savings), and a little for now.

 

[pixie921]

I think that is more indicative of the demographic of his fans more than anything. I've read his books, and I feel like they're directed heavily towards above average earners with a bad case of "stuff-itis" and poor money management skills who need to reprioritize and restructure, but who can readily afford to "get gazelle" about it. Not that there's anything wrong with that - anything that helps people live better lives is a net positive in the world IMO - but it falls flat when you try to apply the same standards to people living on average or below average incomes and those who have had to accumulate sizable student loan debt to secure a stable income.

I totally agree. Even if we cut everything to the absolute bone, there's no way we'd have dh's car and student loans (our only debt) paid off in 18 months. I wish!

 

[beansmom]

Not sure. You're right, logically my mind tells me to be thankful for the blessings we did have for over 25 years. emotionally though, I'm pissed. we did the right things and what did it get him? bubsukas!! right now (and like I said, I know i'm in this weird "grief and need counseling" plane) I don't/or can't see that it was worth it. I feel like "yeah, yeah yeah, save save save, live frugally and then watch what happens!! drop dead. what a life".

right now I feel like, gimme me the soup kitchens at least I can say I blew my money having a good time.

I'm contemplating retiring, not because it's the smart thing financially simply because "why bother". why do my 401k if before I reach normal retirement age I'll be 6 ft under. the only reason I haven't is because they say your not supposed to make drastic changes in your life after a major event.


LOL. so maybe I should amend my answer to "I'm an emotional wreck, do not take advice from me"

ignore me, I know I'm whiney

I think your viewpoint is so totally valid. My dh is 68 yrs old--i'm 53 so will probably outlive him--and I, too, want to make sure we do those wonderful things before it's too late. I mean, he's healthy and active now but nothing about tomorrow is promised.

We are in the midst of re-scheduling that trip to Ireland for September. I feel that's the place of balance.

Hugs for you. You are a strong woman and I admire you.

 

[Colleen27]

Having credit card debt is not a way of life for those in the hold reading ages. A mortgage or rent is very likely. A car payment is too unless you can use some sort of public transportation or drive a clunker. Braces are usually payed on installments over the life of the treatment. This makes sense the same way paying a contractor to work on a home is paid in installments. Nobody would pay 100% of the bill before any work is done.

Credit cards are not like the others. You are brainwashing yourself if you think that CC debt is the way to raise a family.

I take a different view. I don't think there is a such thing as inherently "good" or "bad" debt and that the big picture matters more than the details of each account. A huge mortgage because you want a brand new house or a car payment because someone convinced you that it made more sense to buy new than to repair the car you have isn't "better" debt than a HELOC used to make a less expensive house workable or a credit card bill from a repair that kept an older car running for a few more car-note-free years.

I do think debt is a fact of life at the ages when most people are starting a family (mid 20s to early 30s). Those are years when you have student loans hanging over your head, are striving to buy a home, need dependable transportation you likely don't have the resources to pay cash for, and sometimes charge an unexpected expense. And very few of the DR crew limit their scope to credit card debt - the mantra is not to vacation until ALL non-mortgage debt is paid. For the average American family that is not something that happens quickly; it takes years of building a career and watching the pennies, and can easily mean not traveling at all while the children are young.

 

[beansmom]

I totally agree. Even if we cut everything to the absolute bone, there's no way we'd have dh's car and student loans (our only debt) paid off in 18 months. I wish!

then Dave would say one or both of you need second jobs to generate more income so you can get those debts paid. Sell that new car and get an older reliable car that has no payment attached to it.

I think DR's plan is a great one but we don't follow it to the letter...we are paying off our house before we add to retirement savings. We 'tweaked' the plan to work for us.

I agree with Colleen, debt is debt is debt and has no 'good' or 'bad'. It's just debt. But too many people use credit cards for instant gratification and then get in a hole they can't pay their ways out of each month. Too many people try to get to Retirement without a road map for how.

 

[ChiCat]

Not sure. You're right, logically my mind tells me to be thankful for the blessings we did have for over 25 years. emotionally though, I'm pissed. we did the right things and what did it get him? bubsukas!! right now (and like I said, I know i'm in this weird "grief and need counseling" plane) I don't/or can't see that it was worth it. I feel like "yeah, yeah yeah, save save save, live frugally and then watch what happens!! drop dead. what a life".

right now I feel like, gimme me the soup kitchens at least I can say I blew my money having a good time.

I'm contemplating retiring, not because it's the smart thing financially simply because "why bother". why do my 401k if before I reach normal retirement age I'll be 6 ft under. the only reason I haven't is because they say your not supposed to make drastic changes in your life after a major event.

LOL. so maybe I should amend my answer to "I'm an emotional wreck, do not take advice from me"

ignore me, I know I'm whiney

I haven't lost my husband yet but this seems absolutely normal to me. I'm sure I would say the same thing.

Also I'm very sorry for your loss.

I think Marrionette (I believe) said it best, a balance is needed. I don't know how much debt there is but I also think a WDW vacation (expensive) isn't needed unless you've never been and everyone is just dying to go. If you've been then yeah pay off your debt, go camping at a beautiful national park, spend one weekend away with just the two of you at the closest big city, whatever.

 

[mrsklamc]

but it falls flat when you try to apply the same standards to people living on average or below average incomes and those who have had to accumulate sizable student loan debt to secure a stable income.

If someone is in such a poor situation that Dave Ramsey can't help them, they probably shouldn't be headed to Disney.

 

[ilovemk76]

I take a different view. I don't think there is a such thing as inherently "good" or "bad" debt and that the big picture matters more than the details of each account. A huge mortgage because you want a brand new house or a car payment because someone convinced you that it made more sense to buy new than to repair the car you have isn't "better" debt than a HELOC used to make a less expensive house workable or a credit card bill from a repair that kept an older car running for a few more car-note-free years.

I do think debt is a fact of life at the ages when most people are starting a family (mid 20s to early 30s). Those are years when you have student loans hanging over your head, are striving to buy a home, need dependable transportation you likely don't have the resources to pay cash for, and sometimes charge an unexpected expense. And very few of the DR crew limit their scope to credit card debt - the mantra is not to vacation until ALL non-mortgage debt is paid. For the average American family that is not something that happens quickly; it takes years of building a career and watching the pennies, and can easily mean not traveling at all while the children are young.

All debt is not alike. You need a place to live. Choices are a mortgage or rental ( be it an apartment, home, room or staying in your parents basement).

I prefer Gail Vaz-Oxlaide. She teaches balance. Too much house is bad as is CC debt. She would have you sell and rent rather than exceed 35% for "housing". That is more than just a mortgage

You can justify it all you want that CC debt is no worse then a mortgage but they are not.

Debt at 4% is far better than debt at 20%.

There s nobody who understands finances that woul say putting a want on a CC is a wise thing to do.

 

[Colleen27]

If someone is in such a poor situation that Dave Ramsey can't help them, they probably shouldn't be headed to Disney.

I think there's a lot of room between "can't help them" and "doesn't work for them". The comment was made that DR says most people take less than 2yrs to pay off their non-mortgage debt on his plan. For those people, it clearly works. For the people for whom non-mortgage debt includes 6 figure student loans, not so much.The same can be said for working class families who manage their car payments just fine but can't readily come up with 15K or more to pay it off significantly faster than scheduled. That doesn't mean the latter are in dire straits or that they can't afford their payments or don't have enough left over to vacation. Often people can do both without running up more debt, even if Dave Ramsey doesn't think it is wise. And from what I saw when I used to lurk at LLNOE, many of DR's fans are in the first two baby steps for much, much longer than a couple of years.

 

[mrsklamc]

I think there's a lot of room between "can't help them" and "doesn't work for them". The comment was made that DR says most people take less than 2yrs to pay off their non-mortgage debt on his plan. For those people, it clearly works. For the people for whom non-mortgage debt includes 6 figure student loans, not so much.The same can be said for working class families who manage their car payments just fine but can't readily come up with 15K or more to pay it off significantly faster than scheduled. That doesn't mean the latter are in dire straits or that they can't afford their payments or don't have enough left over to vacation. Often people can do both without running up more debt, even if Dave Ramsey doesn't think it is wise. And from what I saw when I used to lurk at LLNOE, many of DR's fans are in the first two baby steps for much, much longer than a couple of years.

Actually Dave says the average is 18 months. So yes, many are there longer than a couple of years. The person who teaches DR at our church started out in six figure debt- from Disney vacations. And there are always people who claim it doesn't work, but when you dig in, it's because they didn't really do it. If you really DO it, it works- at all income levels. Mostly it's just that people don't WANT to sell the house or car they can't afford, or make other tough decisions. Now, it's a free country and they can balance it how they want to, but if you really do DR as he describes, it works.

 

[jodifla]

All debt is not alike. You need a place to live. Choices are a mortgage or rental ( be it an apartment, home, room or staying in your parents basement).

I prefer Gail Vaz-Oxlaide. She teaches balance. Too much house is bad as is CC debt. She would have you sell and rent rather than exceed 35% for "housing". That is more than just a mortgage

You can justify it all you want that CC debt is no worse then a mortgage but they are not.

Debt at 4% is far better than debt at 20%.

There s nobody who understands finances that woul say putting a want on a CC is a wise thing to do.

It's just money. It's the means to an end. And sometimes, you are in a position where you are going to need more money than you have. So yeah, you spend some money on interest because sometimes doing it NOW is important.

My father became very ill shortly after we moved across the country. So that meant many multiple trips back to see him. It meant helping him move to assisted living, and fronting the money. I guess I could have made the "tough choices" to have him out on the street or in a low-rent nursing home and never see him again, but that isn't how we treat our families. I guess I could have gone all Soup Nazi on my 3-year-old and said, "No more Disney vacations for you! Too bad about the childhood!"

I'm not remotely interested in that kind of life. Why bother?

 

[agavegirl1]

So much of this choice depends on the details. Yes, life is short, the kids are only "X" age for such a short period of time (hence latest Disney marketing) etc. etc. etc....

My DB knows this and would love to take his kids to the World. I went in 2011 and brought each of his girls a gift from Disney. They were thrilled beyond belief with their Disney Princess presents. But he doesn't go himself because of "considerable debt"..I gave him a loan in order to save his house from foreclosure back in 2009. I had the cash and loaned it to him. I also prepared a debt repayment program for him and made checks out to selected creditors to get him back on a more sound financial footing. As a condition of this loan, I help him semi-annually to re-assess his debt situation.

Yes, I am an accountant. All debts are not created equal. There is no need to pay off the car before you go if you are current. If your mortgage is affordable and current, no need to pay this off. Each of these is a secured debt.

Know what percentage of your credit limit is unsecured debt you are using (credit cards, home equity loans when you've lost equity etc). If it is less than 16%, pay off credit card debt and charge your Disney trip afterward. Your credit rating will be unaffected. If your average credit limit per card/account is over $5000 and you have used less than 16% of this amount, go ahead and pay off the debt and charge the trip.

If any credit account is "maxed out" (considered 90% of credit limit according to reporting agencies)...pay that off first. Make a plan to pay off all to a maximum of 15% of available credit. Then save money for a trip.

If you EVER need a new car, to refinance your home, to take out a small business loan, to rent an apartment, to apply for credit of any kind....these factors will affect your credit score in unbelievable ways for up to 7 years. Having a mortgage and being current...helps your credit. Paying off a car loan according to the terms, is a positive influence.

Now for the income part...only you can make this determination since you are the only one who knows how much debt you can pay off each month. If you do a monthly cash budget which allows you to pay off debt and reach the goals above (ie: credit card debt below 15% of max, car loans current, mortgage current) and you know you will be able to pay off the Disney trip in 6 months or less....

Then the not quite Suze Orman and dedicated Disney fan who believes that life is short....would approve you. Otherwise....Denied.

 

[sherilaine]

Did the OP ever come back to state what kind of debt they had - credit card debt, car loan, student loan, mortgage. While debt is debt, we do not see our mortgage as the same type of debt we would see a balance on our credit card or line of credit at all. Mind you, some people do not see mortgage as debt at all and never seem to plan out paying it off.

I was just curious if they ever did, after 8 or so pages of comments come back to add to their question.

That said, I can't imagine going to Disney if I did not have the money sitting in the bank and was able to pay it off fully - that is the same for any trip though, trips are earned, not something you should pay interest on after the fact - and as others have said, there is no option on that poll that I would agree with.

However, when I read comments about people staying on site at Disney at the most expensive hotel and having to use more than one credit card to pay for it so they will have enough credit to pay for it, I realize that not everyone shares that opinion.

Takes all kinds!

 

[ruadisneyfan2]

I wonder what is DR's position on aquiring student loans to begin with? Sure it's great for attending medical school where you can be pretty confident it will someday feel like a a car payment compared to the avg college grad entry level salary but does he say everyone should do it? (Am I rambling here? What I mean is a $200k loan is outrageous if you graduate & earn $50/yr. Not so awful if you earn $400k/yr)

I paid for my own college with my little PT job working 20-25 hrs/week. Back then (1985) it was $2k/yr for a nearby state school (Rutgers) and living at home. I grossed $100/week, took home $80 after taxes and $50 of it went to tuition. I never would have dreamed of racking up a huge tab to go somewhere where I needed to pay for a dorm/rent & out of state tuition rates.
Why do people feel like they have to rack up a huge college tab to begin with? I survived without the whole "onsite experience" to coin a phrase. Doesn't anyone just say "no thanks, I/my parents can't afford that school?" Is this another case of "not all debt is created equal"?

 

[agavegirl1]

The OP posted a poll and most, if not all replies came from people who could not respond to the choices in the poll. The poll may be the reason we have not heard from the OP.