Vacationing and having debt

[Dugette]

As for vacationing with credit card debt- we make far, far more than the minimum payments. We have a plan that will have the credit cards and car paid off by the end of next year. We have been budgeting for this trip for the last year, and having a trip to look forward to has made it easier to stick to our budget of paying off debt. We tried doing the "every extra penny towards debt" thing and it didn't work out well for us. We were miserable, and would inevitably blow it and not end up making any progress. Now? We've managed to pay off a nice chunk of our debt, and are doing so at a pace that is comfortable for our budget and lifestyle. Sure, we could speed things along and be out of debt faster, but this is working for us in a nice balance. I suppose it's kind of how like the differences in approaches to dieting- some people have a strict 100% adherence, some have a cheat day or meal.

I second this mindset! We haven't had any debt other than our mortgage for the last five years, but we started our marriage saddled with a lot of debt - credit cards, car loans, student loans, etc. We were not adding any additional debt, as it was due to past circumstances, so we were able to very aggressively pay down our debt. However, it was a significant amount and, even with very large monthly payments, it took us several years to eliminate. And we didn't want to live without anything fun for that long, so we didn't minimize our lifestyle down to bare bones, but we didn't live extravagantly either (and still don't).

I think the key is having a plan that you can follow that shows you when you will have your debt paid off. Then, stick to that, adjusting as needed, but always knowing where you are going. In our case, we played with numbers and realized that taking a vacation before the debt was gone would only add about 3 months to our debt-free date. We were okay with that and took a cruise and it was a great decision. It was paid for in cash, as we planned it in advance, and we continued to pay off our debt according to plan.

I was actually reminded of this the other day, as we are planning a Disney Cruise now and I looked back at this 2008 Royal Caribbean cruise on my budget spreadsheets for comparison (it was almost $4k, including all expenses). At first, I was surprised we spent that much for a vacation when we were still in debt, but upon reviewing our strategy outlined above, I don't think it was unreasonable to do that trip and I'm glad we struck a good balance during that time in our lives.

As others have said, nobody knows what the future holds and whatever good memories you can make now with your family, within your financial comfort zone, are worthwhile.

 

[Colleen27]

I assume you are paying off the cc monthly. That will show use and improve your score. No need to pay interest.
I don't see any reason you shouldn't vacation. Sounds like your only debt is the small student loan. Reasonable. The problem with student loans is when they are disproportionate to income. The problem with credit card debt is that it was likely accrued purchasing thing that someone couldn't afford, whether due to a medical crisis, irresponsibility, job loss, whatever. I feel, as do many financial gurus, that the cc should he paid prior to spending a bunch of money on a vacation. That said, to each his own.

That was my point - it doesn't make sense to say "this kind of debt good, this kind bad" because that's only one piece of the bigger picture. Credit card debt accrued during a period of medical crisis or job loss that has since been resolved, being paid down over time, isn't the same as maxing out the cards over and over again on impulse buys or because of a chronic lack of savings. Student loan debt that is equivalent of a few months' income isn't the same as student loan debt in multiples of one's annual salary. A mortgage may be necessary debt, but that doesn't mean an unmanageably high payment is better/more acceptable than a small student loan or credit card payment. Individual circumstances matter and aren't as simple as black and white categorization of debt by type.

 

[ellie05]

OP what works for some doesn't work for others. Do what you are comfortable with and doesn't cost you any extra stress.

 

[lauradis]

Money is a tool to get me the things I need first, then the wants.

I never have understood why some people tie emotions into money or debt.

Needs are:

Place to live
Food to eat
Clothing to wear
Heat/lights
Transportation to make money

Everything else is a want.

We plan vacations to be pre paid
We are basically renting our house from the bank we don't plan on staying here forever.
Our car loan is cheaper then paying off and deterring extra money from retirement to pay it off.

We have no other debits and it isn't hard to stay out of debt with the mind set of needs vs wants.

 

[yaddakal]

I am a hospice nurse and what i have seen has changed my outlook. Vacationing even with credit card debt is something we do. However I will not charge a vacation . That we pay in cash. Life is just to short. These kids will only want to be around us for the next 5-8 years. My friends have lost their husbands . I'm only 40. Do it now. If you can, do it. I have seen so many people die I love to live!

 

[saraschoening]

If your not paying a mortgage, your paying rent... but maybe I say that because here the average house cost is between 6 and 7 hundred thousand so most people don't pay those off too quick. If you don't have a car loan, your generally paying for car repairs (at some point) or taking the bus, or biking (which does cost money) so I consider all of those to be normal costs of living. Your not going to NOT vacation because you have to buy food right? Well shelter is a basic necessity of life as well as food.

I agree with what everyone else is saying.. if you are comfortable with your finances then by all means.. travel. But if you are just getting by then maybe hold off. I personally have a huge phobia of credit card debt (WAS a debt collector) so I could never put a vacation on credit but I don't believe that there is anything wrong with it as long as you can pay it off in a timely manner. Life is so short and we need to enjoy ourselves and spend time with our family. Here where I live it costs a $100 to go to a movie.. I would rather skip all the eating out and movies for the year and play at Disney for a few days... but that's just me.

 

[WaltTheImpaler]

the average house cost is between 6 and 7 hundred thousand so most people don't pay those off too quick.

Pardon my crazy question, but I am very curious, why you elected to transcribe "between 6 and 7 hundred thousand" that way?
Did you intentionally eschew writing "between 600k and 700k" or even "600 and 700 thousand” ?
Was there a reason you elected the entire thing out, with no abbreviations, almost like writing a check?

 

[kathy884]

I think it's more about your vacation fitting into your budget than anything else.

I just have a mortgage, but car payment or not, monthly escrow or not, I need to have money available to pay for those things if I am to buy them for cash too.

My monthly budget includes:
-- 401K retirement savings
-- basic expenses
-- charitable contributions
-- mortgage
-- money in fund for taxes and insurance
-- monies for college for DS
-- mastercard fund -- I put a little in an excess fund each month for fluctuations in spending, so I don't have to go into emergency reserves. This is not meant to build up, but to stay about even from month to month, allowing me permission to have a little spending flexibility.
-- vacation monies (I put monies in here every paycheck and pick vacations that the monies in here will cover.)
-- car fund monies -- I buy two modest cars every 10 years

And there is always the flexibility to shift monies around a little.

 

[Marionnette]

Pardon my crazy question, but I am very curious, why you elected to transcribe "between 6 and 7 hundred thousand" that way?
Did you intentionally eschew writing "between 600k and 700k" or even "600 and 700 thousand” ?
Was there a reason you elected the entire thing out, with no abbreviations, almost like writing a check?

Not the OP but my phone does that when I dictate rather than type any text.

 

[BenbowInn]

So I've become a lot more philosophical about debt and money since losing my husband. So I'm probably a lot more skewed.

I no longer put off vacations in order to pay off my mortgage or car note early. Now I did not grow up on credit cards so that was never really an issue.

BUT, let me add that a vacation does not have to be Disney. I can and have done cheaper vacations and have had just as "magical" times.

So my standard answer is, if I had most of my financial life in order (emergency fund, saving for retirement etc) I would not delay my vacation just to pay off my mortgage early.

I agree with this. My only debt is a mortgage so I'm okay with spending so much on vacation. Husband and I both drive older (a 99 and a 03) cars so the money we save on car payments and low insurance premiums more than pays for a few nice vacations a year. In the 8 years we've been married, we've spent roughly $4,000 in car repairs and never had a car payment.

Now if we had car payments, outstanding medical bills, student loan payments, credit cards, etc then no, I wouldn't vacation until I got some of that paid off. I personally couldn't imagine having a good time on vacation knowing how financially crunched I am. Also we are fortunate in our incomes and if for some reason it got drastically cut then I wouldn't feel comfortable funding vacations over savings. To each their own though. We all have to make choices and live with the outcomes.

 

[saraschoening]

Pardon my crazy question, but I am very curious, why you elected to transcribe "between 6 and 7 hundred thousand" that way?
Did you intentionally eschew writing "between 600k and 700k" or even "600 and 700 thousand” ?
Was there a reason you elected the entire thing out, with no abbreviations, almost like writing a check?



You know.. I don't know. I used to work in Finance and write numbers all day.. and I had a rule.. no numbers or math after 5 pm so maybe it was just my crazy, different mind working subconsciously. Or maybe I just get so upset when I think about high housing costs that it distorys any and all logical thinking in my brain. I hate how expensive it is to live in Victoria, BC.. Don't get me wrong it is gorgeous but I feel like its very overpriced. Houses have fallen a lot in the past couple years but they are still high and I really don't think that its too much to ask that we all have a place to call home. Most people work hard and it seems like no one can get ahead and it hurts my heart.... (way too sensitive by the way) anyhow way off topic but to answer your question truthfully.. I don't know.. sorry Have a beautiful day!!

 

[bcwife76]

Off topic too, but I agree with you Sara, we live in Surrey (near the Surrey/Langley border) and can't AFFORD to live any closer to the city if we want any sort of decent sized home. So my husband commutes to work from here to Richmond and then to North Van. So yeah, 1.5hr commute EACH way every day, just so we can live here. Dude, I'd move to a cheaper area in a heartbeat, but dh is the one who doesn't want to move.

 

[pigletto]

Off topic too, but I agree with you Sara, we live in Surrey (near the Surrey/Langley border) and can't AFFORD to live any closer to the city if we want any sort of decent sized home. So my husband commutes to work from here to Richmond and then to North Van. So yeah, 1.5hr commute EACH way every day, just so we can live here. Dude, I'd move to a cheaper area in a heartbeat, but dh is the one who doesn't want to move.

When Dh graduated last year he was offered a job with the city of Surrey. We did a little research and quickly completely ruled it out. It is absolutely jaw dropping what homes cost out there. We would have had to stretch ourselves right to the limit to even get into a townhouse. The higher income that they were offering out there vs. here didn't even begin to cover the disparity in living costs. I really feel for you guys.

 

[pinkprincess30]

In my opinion there's a difference between having some debt that you are in the process of paying off responsibly versus being completely swamped with debt and unable to make timely payments, etc. When your debt obligations lead to you no longer being able to live a comfortable lifestyle and/or you are struggling to pay them while making ends meat, then yeah I think it is irresponsible to spend more money and take on more debt just to vacation.

HOWEVER...if a family has some debt and they are actively paying it off w/o any problems at reasonable interest rates, I see no problem with taking vacations provided that you are not going into further debt to do so. For example, DH and I have a mortgage, car loan, student loan, and a balance on one credit card. But we are able to comfortably make our payments each month and still have enough left over for day to day living expenses and put a little away for vacations. Now ideally, would it be better if we took the vacation money and paid extra toward our cc? Well technically yes, but vacations are important for us--they are our time to unwind and enjoy each other as a family. I try to strike a good balance between being responsible AND enjoying life because ultimately life is short.

Just my two cents

Yes! My thoughts exactly. My husband and I took on student loans to put him through college (stupid, stupid, stupid!) and have been in debt ever since. One year, after never having been on vacation (like anywhere, not even a weekend trip), we threw caution to the wind and used our tax return for a family trip to DLR. BEST THING WE EVER DID! Now our finances have improved and we are able to pay all of our payments (plus a little extra here and there) and still have extra every week. We are diligently paying down debt as much as we can but have hit the *pause* button to take another vacation (it has been four years since the last one). This will make 2 vacations in 15 years of marriage. Our boys will only be kids for so long and while I KNOW nobody ever died from not taking a vacation, it is something that is important to us.

I know it will be worth it in the long run, and it will do us all some good. But when we get back, it's nose to the grind stone!

 

[bcwife76]

When Dh graduated last year he was offered a job with the city of Surrey. We did a little research and quickly completely ruled it out. It is absolutely jaw dropping what homes cost out there. We would have had to stretch ourselves right to the limit to even get into a townhouse. The higher income that they were offering out there vs. here didn't even begin to cover the disparity in living costs. I really feel for you guys.

When we got ready to buy, we moved to New Westminster (from North Van where we grew up) and bought a condo. When our first child came along we sold our 1bed condo and bought a townhouse in Port Moody. Then we hated everything about it (except the location) and with 2 kids we wanted more. So my mom sold her condo in North Van, we sold our townhouse and we bought a house in Clayton Heights. Without my mom we would be stuck in our townhouse (it's basically like we are living in our inheritance!) On the upswing, we could sell our house for about $75,000 more than we paid for it 3 years ago so silver lining LOL NOT that we are looking to move again for a loooong time I think!

 

[smiths02]

My philosophy is that as long as I am in reducing my debt and I can continue to reduce my debt (and save a little for retirement), then I won't deny myself/my family every unnecessary expense. I would, however, be uncomfortable with adding to my debt by going on vacation.

 

[smcabee]

I watched and listened to my parents say "one day we will go to Mexico", "One day we will take that Alaskan cruise" and many other places and then my mom died at age 55. I was 27 at the time. Since that time, I have no debt except our mortgage and 1 car loan that is about to be payed off. I say go, make memories and live life. Your one day may never come if you put things off.

 

[WaltTheImpaler]

People should have a minimum of 5 years of living expenses saved in cash.

 

[Marionnette]

People should have a minimum of 5 years of living expenses saved in cash.

 

[FairestOfThemAll37]

People should have a minimum of 5 years of living expenses saved in cash.

I have to assume this is a joke?