WDW with credit card debt?

[ValpoCory]

I don't want to give the impression that I believe giving up *everything* for your family is a good thing, either. Balance.

Time enjoying hobbies and friends (for both Mom and Dad) is a great thing and makes us better partners and parents. Personal time is important for everyone.

Definitely agree. My wife and I are sure to give each other personal time. Just last week I took the kids away for the weekend to give her a weekend off for the first time since we had kids. Likewise, I was going to go with friends to the Final Four in New Orleans this weekend. My team lost in the Elite 8 game, but the point is we both want each other to have the personal time needed to recharge the old batteries.

 

[barbarabini]

Checking in here. Credit card debt - check. Vacation - check.
Reading through the threads, there seem to be a couple of types that the posters fall into:
(1) people who absolutely do not have any risk tolerance for debt- thus the main priority for their peace of mind is being debt free ; (2) the live for today group - I'm going on vacation and who cares if the lights get shut off; (3) the everything in moderation group - some savings, some debt, some vacations.

I fall into the third group. I think it is just C-R-A-Z-Y advice to pull money out of your house or savings to payoff credit cards, or medical bills, or any other unsecured debt you may have. You'll pay it in time. What is going to happen? The bogeyman is going to call you for payments? Being a litigator for some years now has given me the perspective, that unsecured debt - so what - nothing is going to happen. Eventually, you'll pay it or settle it. After many years, maybe they can get a judgment? maybe for a portion of it owed? I think the people in the first group, either just have an ethical aversion to debt or don't truly understand the actual consequences of default.

Usually, I would say, stay on top of and try to pay off your secured debt. That way you have a paid off asset. However, after what I am seeing in courts regarding the foreclosures, I am starting to rethink my stance on debt secured by real property. Some of my clients have been able to last two-three years without being foreclosed on. (rent-free). There is certainly a case to be made for strategic default in many cases. Certainly, it amounts to a better economic decision in many cases.

What I have seen now is that cash is king. I wouldn't go tying up assets in restrictive accounts, keep it cash, keep it in stocks or funds, but keep it unrestricted and able to become liquid.

 

[mefordis]

Thanks for the song. When I got married and later had kids, I gave up a lot of things I used to spend my time on. Sometimes I long to be able to consistently play 18 holes again or regularly sign up for adult sports leagues. But songs like that reinforce that the priorities I now have, spending time with my family every night, are where they need to be.

And a bonus, my kids are just getting to that age where they are getting interested in things in which I used to regularly partake. I have started taking my daughter golfing. It's fun for us and I have no guilt, and get no grief from my wife, for abandoning my family for 6 hours.

That's great! How old are your kids now?

 

[disykat]

Checking in here. Credit card debt - check. Vacation - check.
Reading through the threads, there seem to be a couple of types that the posters fall into:
(1) people who absolutely do not have any risk tolerance for debt- thus the main priority for their peace of mind is being debt free ; (2) the live for today group - I'm going on vacation and who cares if the lights get shut off; (3) the everything in moderation group - some savings, some debt, some vacations.

I fall into the third group. I think it is just C-R-A-Z-Y advice to pull money out of your house or savings to payoff credit cards, or medical bills, or any other unsecured debt you may have. You'll pay it in time. What is going to happen? The bogeyman is going to call you for payments? Being a litigator for some years now has given me the perspective, that unsecured debt - so what - nothing is going to happen. Eventually, you'll pay it or settle it. After many years, maybe they can get a judgment? maybe for a portion of it owed? I think the people in the first group, either just have an ethical aversion to debt or don't truly understand the actual consequences of default.

Usually, I would say, stay on top of and try to pay off your secured debt. That way you have a paid off asset. However, after what I am seeing in courts regarding the foreclosures, I am starting to rethink my stance on debt secured by real property. Some of my clients have been able to last two-three years without being foreclosed on. (rent-free). There is certainly a case to be made for strategic default in many cases. Certainly, it amounts to a better economic decision in many cases.

What I have seen now is that cash is king. I wouldn't go tying up assets in restrictive accounts, keep it cash, keep it in stocks or funds, but keep it unrestricted and able to become liquid.

This post demonstrates exactly why people care about what others do. The whole "eh, eventually they'll settle it or we'll just default" attitude that more and more people are getting about debt. That kind of thing does affect the rest of us through higher costs etc.

 

[jodifla]

Checking in here. Credit card debt - check. Vacation - check.
Reading through the threads, there seem to be a couple of types that the posters fall into:
(1) people who absolutely do not have any risk tolerance for debt- thus the main priority for their peace of mind is being debt free ; (2) the live for today group - I'm going on vacation and who cares if the lights get shut off; (3) the everything in moderation group - some savings, some debt, some vacations.

I fall into the third group. I think it is just C-R-A-Z-Y advice to pull money out of your house or savings to payoff credit cards, or medical bills, or any other unsecured debt you may have. You'll pay it in time. What is going to happen? The bogeyman is going to call you for payments? Being a litigator for some years now has given me the perspective, that unsecured debt - so what - nothing is going to happen. Eventually, you'll pay it or settle it. After many years, maybe they can get a judgment? maybe for a portion of it owed? I think the people in the first group, either just have an ethical aversion to debt or don't truly understand the actual consequences of default.

Usually, I would say, stay on top of and try to pay off your secured debt. That way you have a paid off asset. However, after what I am seeing in courts regarding the foreclosures, I am starting to rethink my stance on debt secured by real property. Some of my clients have been able to last two-three years without being foreclosed on. (rent-free). There is certainly a case to be made for strategic default in many cases. Certainly, it amounts to a better economic decision in many cases.

What I have seen now is that cash is king. I wouldn't go tying up assets in restrictive accounts, keep it cash, keep it in stocks or funds, but keep it unrestricted and able to become liquid.

I agree. We are also in the third category. Cash is king. And once money goes into savings, it stays there. We'd rather have some CC debt for a while than dip into our savings. We also have college savings and 401 (k)s and pensions.

In the past, we've taken trips on credit cards. Now we have the money before we go. But I wouldn't trade all my vacations for some of the interest we paid. It was totally worth it.

I always think of the movie "Up." Every time they got some money saved, some crisis wiped it out. Not the kind of life I'm interested in living.

Not the kind of life I'm interested in living.

 

[ValpoCory]

That's great! How old are your kids now?

My daughter turns 7 this summer. I bought her some discount junior golf clubs from a store called Academy. A nice quality driver, iron, and putter for $11 total.

My son is 2. He has the standard plastic clubs for the backyard. I'll give him a shot at the driving range in a year or so.

 

[mefordis]

My daughter turns 7 this summer. I bought her some discount junior golf clubs from a store called Academy. A nice quality driver, iron, and putter for $11 total.

My son is 2. He has the standard plastic clubs for the backyard. I'll give him a shot at the driving range in a year or so.

Great age difference. You can enjoy golfing with your 7 year old then can also look forward to doing it in 4 or so years with your little one!

 

[barbarabini]

Ahh, maybe in a very microeconomic manner, those people's personal decisions or defaults matter, but only when they were failed to be priced in to the market by the original risk taker.

On the macroeconomic level, everyone one of the no-debt, generally sanctimonious americans that answered this question, needs to understand that even thought their personal balance sheet may say zero in the liabilities column, portions of their lifestyle are being funded by debt incurred by virtue of them being an American citizen. That US debt, is wholly owned by us, the american citizen. Now, it will either be paid down by higher taxes and less services, or some lender is going to take a haircut on it.

I do object to the very myopic view of economics held by DR fans. They like the black and white, no shades of grey. In practice, economics and economic decisions are generally a little more complicated.

And last, I think that the characterization of "eh, eventually they settle.." mindset is a mischaracterization of the economic thought and decisions that go into a strategic default - as it happens both on the individual level and in significantly higher amounts by corporations. For example, sometimes the strategic default on a large apartment complex, or resort, is the only way to keep a companies' other businesses intact. So, you weigh the pros/cons and move forward with default. Personally, sometimes its the only way to keep a family afloat.

 

[ZephyrHawk]

First, I have to fess up and say I've traveled with CC debt. However, that is mainly because I put the trips themselves on the cards. Why? Because I want the points you receive from big ticket items. If I pay them off regularly, then what's the difference between cards and cash? I also have a mortgage, a car loan and student loans that kick my behind.

I would say that one's comfort level does have a lot to do with whether you vacation on debt, but that "comfort" means different things to different people. I have good health insurance, I have never worried about the lights being turned off, I have always saved when I could, I work to pay off my existing debts (though perhaps not as quickly as I would without vacations). Were either I or my DH to lose our job, things would need to be tightened significantly, but we would be okay. Mind you, if we both simultaneously lost our jobs we'd be screwed, but I think most couples would be screwed in that situation. In other words, I don't need to be completely out of debt to be in a situation where my way of living day-to-day is threatened. If I were "struggling", then no, I wouldn't vacation, but having a little debt isn't necessarily struggling.

However, I think the another issue is what sort of importance vacationing has to you. For some, its just a way to relax...a treat for getting all your other work done. For me, my DH and my parents (who passed on their opinions to me), we work so that we can go on vacation. Going away from our real lives is what we live for. It's what we plan for months and years ahead. We don't care about clothes or date nights or keeping up with the Jones'. What we like is looking at our vacation photos and saying, "Hey, remember when we went there? That was awesome." So for me, spending on a vacation is not an excess. It's a life necessity.

 

[ccgirl]

First, I have to fess up and say I've traveled with CC debt. However, that is mainly because I put the trips themselves on the cards. Why? Because I want the points you receive from big ticket items. If I pay them off regularly, then what's the difference between cards and cash? I also have a mortgage, a car loan and student loans that kick my behind.

I would say that one's comfort level does have a lot to do with whether you vacation on debt, but that "comfort" means different things to different people. I have good health insurance, I have never worried about the lights being turned off, I have always saved when I could, I work to pay off my existing debts (though perhaps not as quickly as I would without vacations). Were either I or my DH to lose our job, things would need to be tightened significantly, but we would be okay. Mind you, if we both simultaneously lost our jobs we'd be screwed, but I think most couples would be screwed in that situation. In other words, I don't need to be completely out of debt to be in a situation where my way of living day-to-day is threatened. If I were "struggling", then no, I wouldn't vacation, but having a little debt isn't necessarily struggling.

However, I think the another issue is what sort of importance vacationing has to you. For some, its just a way to relax...a treat for getting all your other work done. For me, my DH and my parents (who passed on their opinions to me), we work so that we can go on vacation. Going away from our real lives is what we live for. It's what we plan for months and years ahead. We don't care about clothes or date nights or keeping up with the Jones'. What we like is looking at our vacation photos and saying, "Hey, remember when we went there? That was awesome." So for me, spending on a vacation is not an excess. It's a life necessity.

This is us too. Very well put.

 

[budafam]

I wouldn't go if I had credit card debt looming over my head. I use my credit card a LOT but I also pay it off every single month so I never get charged any interest. This is what gave me $500 free cash for our upcoming trip and 4 round trip flights!

We live frugally. I cut coupons, shop sales, go to garage sales/thrift stores and hardly ever buy brand new unless I have to. We have an emergency fund set aside and we are able to pay all of our bills every month on time with a little extra to put away for vacations. I try to always have the vacation fund full before we take one. If I'm a little short, I will still take the trip but pay it off afterwards. I couldn't put it on credit and take months to pay for it...

 

[elaine amj]

I have one in his 70s whose wife is in her 70s and they both still NEED to work. They still live beyond their means and simply can't afford to retire - something they'd really looked forward to.

(It doesn't help that he was self employed and under reported his income for his entire career, he doesn't qualify for much social security).

I think the key here is balance, to me, I do need to enjoy today, but I also need to save for tomorrow. If I'm carrying credit card debt consistantly, that makes that second part really tough.

That's the kind of worry I guard against. We save a LOT and live well within our means because we have a certain vision of the life we want, and I hate feeling like I don't have "enough". I watch my friends freak out when their paycheque arrives a day late because their employer made a mistake, I watch my friends worry about retirement, I watch them deal with collector's calls (For a couple of months, I WAS a collector!). That's not what I want for my life.

So, I choose to spend less to have the security of knowing my finances are comfortable. I still have to scale back my retirement dreams (because they were hopelessly unrealistic), but I LIKE the security of knowing I have enough for whatever it is I choose to spend on. I LIKE knowing that when our aircnditioning unit busted last year, we had the $3000 to replace it with no real strain.

You're not asking the right question. You can't look at just vacations and ask whether you can/can't afford them with debt. Why? Because you can't look at any one portion of your budget without considering every other portion.

What matters most to you? Do you want a super-nice house? Or car? Buy it, but don't complain when you can't afford to go out to dinner. Do you feel better about yourself if you can have new clothes on a regular basis? Then buy them, but don't whine when you're still working and your friends are retiring. Do you want to be sure you can retire at a reasonable age and live comfortably? Save, but don't complain that others have more luxuries now.

Decide what matters to you. But since your money probably won't allow you to have everything that you want, be prepared to do without whatever you rank as a lower priority.


For my family, we've always placed a premium on financial security, which includes being able to send the kids to college and being able to retire. We do live in "less house" than most of our friends and don't spend as much on consumer items. However, with a child heading to college in the fall, it feels wonderful to know that we can write a check for her entire bill, and it isn't even a sacrafice. Also, I'm not burned out at my job, but I can see it from where I'm standing -- I'm glad to know that I have 10 more years to work, and I can retire comfortably. If I knew I had to work 'til I'm 70 or older, I would be very depressed.

ITA. That's exactly how we are. We live in a modest house (abt half of what the bank says we can afford). In the past 2 years, we have been in "vacation mode" and have been really into a variety of expensive vacations. This year we are doing a cruise, Disney, and several long weekend trips. That's a LOT for us and our budget. Therefore, we stopped spending on home decor. My living room needs a refresh, I could use some new furniture, etc. But - we've decided to stretch our stuff a little while more and spend the money on vacations instead. I really want a dog - but affording one would mean giving up on some vacations - and I'm not prepared to do that. So we won't be getting a dog.

What I think is important is to make your decisions with your eyes wide open. If you pay for your expensive vacation with CC debt, understand and ACCEPT the consequences - then I think you've made your choice. I have to admit, it's hard for me to watch though.

My dad is wealthy. But he spends money like water. If the day comes when he runs out of money, I'll have to pick up the pieces and support him on my moderate income. I really wish he wasn't so shortsighted with his money.

I worry most about the folks who close their eyes to the facts and have to "have it all" and dig themselves into a financial mess with no real idea how they got themselves in there or how to get themselves out.

 

[disykat]

Ahh, maybe in a very microeconomic manner, those people's personal decisions or defaults matter, but only when they were failed to be priced in to the market by the original risk taker.

On the macroeconomic level, everyone one of the no-debt, generally sanctimonious americans that answered this question, needs to understand that even thought their personal balance sheet may say zero in the liabilities column, portions of their lifestyle are being funded by debt incurred by virtue of them being an American citizen. That US debt, is wholly owned by us, the american citizen. Now, it will either be paid down by higher taxes and less services, or some lender is going to take a haircut on it.

I do object to the very myopic view of economics held by DR fans. They like the black and white, no shades of grey. In practice, economics and economic decisions are generally a little more complicated.

And last, I think that the characterization of "eh, eventually they settle.." mindset is a mischaracterization of the economic thought and decisions that go into a strategic default - as it happens both on the individual level and in significantly higher amounts by corporations. For example, sometimes the strategic default on a large apartment complex, or resort, is the only way to keep a companies' other businesses intact. So, you weigh the pros/cons and move forward with default. Personally, sometimes its the only way to keep a family afloat.

I'm not a DR fan. I've never needed to be. I've operated on the basic premise of only buying what I could afford and it's worked fine. (And yes, sometimes "affordability" involves some debt/credit.) I think you overestimate the brain power of most people who haven't had a basic enough understanding yet to understand "if you can't afford it, don't buy it." Have you seen the SNL clip of that skit? There really are people that don't understand that basic premise and just assume they can rack up debt now and have it eventually just "disappear" becauser they can't pay it.

I've known people who've had to foreclose, consolidate, etc. for honest reasons. Everyone knows there are valid reasons for that sort of thing at times. I don't consider accumulating consumer debt and not being able to cover it an honest reason. I consider it theft.

 

[ssleblanc]

Likewise, I was going to go with friends to the Final Four in New Orleans this weekend.

Have a great time! The weather has been beautiful here this week. There are a bunch of free concerts downtown and the city is really geared up to be a lot of fun - even if your team isn't playing.

-----

I wouldn't attempt Disney or a big vacation if I were in over my head in credit card debt. Right now, I have just under $1000 in credit card debt. I don't consider that big debt and it will be paid off in a few months. It could be paid off in two months if I really pinched pennies, but will probably stretch it to 3 to 4 months. I don't pay minimum payments.

Prior to Katrina I was debt free except for mortgage and student loans. Katrina killed that - homeowners insurance, outrageous contractors, and stupid-high prices on materials meant that we went back into extreme credit card debt rebuilding our house and just getting our lives back in order. It's almost paid off though.

Right before Katrina we refinanced our mortgage to a much lower rate and cut the 30 year mortgage (with 25 years left) down to a 15 year mortgage. The payment was only slightly higher and we would be done 10 years earlier. Had no idea we were about to be hit by a big storm and that homeowners and flood insurance would more than double. Now the mortgage+insurance escrow is not nearly as comfortable. Had I known then what I know now, I wouldn't have shortened the time on our mortgage when we refinanced. It's made us house-poor but we now just have 8 years left before the house is paid off. Our oldest two will be in college when that happens, and our youngest will still be in middle school.

We are still paying student loans for my husband but can finally see the light at the end of the tunnel. We actually made it through undergrad with no loans - it was grad school that put us into heavy student loan debt (one year of law school is the majority of the debt - still paying those stupid loans).

I won't go into debt to take a vacation, but I would take a vacation if I had a small credit card debt (under $2,000 total). If I were in serious debt that I was struggling to get out of, I would find cheap vacation alternatives for my family (camping at a state park, things like that). For our upcoming Disney trip, it will be paid in full before we leave - and not on credit cards.

As far as college - my husband is a college professor and they do NOT make a lot (at least not in New Orleans). Both of us work full time and are not able to save much for our kids college. Obviously, we value education. And we both paid our own way through school. I do think there is a value in paying your way through college. There is a certain amount of ownership that comes with it (either working to pay for it, or earning scholarships). My husband sees it with his students. The students who have to maintain grades for scholarships, and the students who are busting their butt to pay their own way take classes more seriously than those who have it paid for by someone else (parents or government grants). Not to say that all kids who get grants from parents or government are bad students ... but you can certainly see a trend. While I would like to pay for my kids education 100% (I would if I could) ... since I can't, I choose to see the benefit of them having to work a little for it. I took pride in taking care of myself.

(I will say that when I was in college full time - a full semester with books cost as much as one 3-hour class today. The college inflation rate is astounding!)

 

[sophie832]

I think you overestimate the brain power of most people who haven't had a basic enough understanding yet to understand "if you can't afford it, don't buy it." Have you seen the SNL clip of that skit? There really are people that don't understand that basic premise and just assume they can rack up debt now and have it eventually just "disappear" because they can't pay it.

DH and I love that SNL skit! It's hilarious...and also a spot-on commentary on how many people view credit cards.

Anyway, I know there are a lot of people on the DIS who state that you should never spend big on any vacation unless you are out of debt with a good savings built up, but we've done every time we've gone to WDW. DH just finally got a permanent job last month after 3 years of unemployment. During the unemployment, we've been paying our mortgage, which hasn't been easy. Still...we went to WDW once while he was unemployed, and twice while he was working temp jobs...and we also went to Alaska. We didn't rack up a ton of debt, but we did use credit cards for the trips. Now we've paid those off, still have a little debt, have a new student loan and a new car, and are off to WDW in Oct. I don't feel bad about it at all. I'm not going to wait my whole life to travel. My mother has health problems at age 65 that prevent her from flying anywhere, and I can't help but worry that might be me someday. Also, I assume once we have kids we will want to spend/save for them, and vacations will have to be a lot less expensive (road trips!).

I would never spend $ to the point where I couldn't pay off my debts, but I certainly wouldn't wait around to have a perfect financial state either. Traveling makes us happy...like, banana happy

Just my opinion, of course, and I applaud everyone who does live a debt-free life.

 

[Ember]

All of my friends who had their schooling paid for are now hip deep in dept. The couple of people I know who paid their own way are dept free. Now, I don't think one automatically leads to the other, but I definitely think being financially responsible at a younger age makes people appreciate both their education and their financial situation more. (To be fair, I'll also own up to the green eyed monster here - every weekend and holiday, and many evenings, I was working while the people I knew who had everything paid for were enjoying their time off and going fun places.)

As to travelling with debt, I've done it. I can't say I'd do it again without a very good reason, but I do think there has to be a balance between living now and living for the future and going to either extreme isn't a good idea.

Of course, I also don't think living debt free makes you a morally superior person. It means you've been lucky and made some good choices. But you can make all the smart financial choices in the world and still wind up in a bad place financially, or make really bad choices and still be okay due to various situations.