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

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

  1. DreadpiratK

    DreadpiratK Mouseketeer

    Feb 21, 2001
    I don't mean in terms of a specific dollar amount, but in terms of your overall finances? Several threads on here have gotten me thinking about this today, especially as we are only 5 days away from leaving for our big Disney vacation, our first in 5 years.

    So, whether you are talking about a Disney vacation or some other non-essential (please lets not dive into how Disney is an 'Essential' in your mind, if you won't go hungry or homeless without it, it's not an essential) how do you determine if you can afford it in relation to the rest of your financial life?

    For us, in years past affordable = available credit, then we crashed and burned, as everyone who lives that way eventually will.

    Then it was, well, if we can do it and not get too far behind on the bills, i.e they won't turn of the lights or anything. That only works for so long, and it minimized our ability to enjoy things because of the stress it induced.

    After some terrible financial times, and I mean real bad, we've grown up a lot, and for this trip and going forward our definition of affordable has been:

    1: We don't touch our normal monthly budget at all.
    2: We don't touch the emergency funds
    3; We haven't stopped our planned savings for retirement
    4: We don't stop or reduce our tithes and offerings, in fact we increase them.

    We decided that if we can meet all of these criteria, and pay for a trip (to Disney in this case, but could be anything we want but don't need) we could go. I actually wrote this down when we first started planning this trip about 8 months ago.

    Now, on the verge of leaving on this trip, I'm looking back and seeing how we did with our criteria.

    How do you decide if you can afford something like Disney? I'm really very curious to know!
  2. A Mickeyfan

    A Mickeyfan DIS Veteran

    May 31, 2000
    Afford it means that you have the "cash" to either by via cash, or charge it & pay off the charge bill in full when it comes.. that is afford to me.. if I have to take from a savings, unless a special vacation savings, then you cannot afford it.. I have lived by this rule all my adult life. I pay off my charge bill in full every month.. only time I have taken from savings was to pay homeowners insurance, but then again, I put my income tax check in there to pay the homeowners insurance when it arrived..
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  4. Hannathy

    Hannathy <font color=darkorchid>When I stop laughing I will

    Jan 24, 2006
    All of the above AND we can pay for it without charging it. Yes I put it on the credit card for the protection and miles but we are able to pay for it when the bill comes. And we don't owe anything on the credit cards before the trip or special thing.
  5. disneychrista

    disneychrista DIS Veteran

    Dec 26, 2002
    For me being able to afford something means I have saved the money in advance to pay for it. If I haven't saved the money for an extra then I can't afford it. And just because I have money saved for extras does not mean I have to go out and spend it.

    I am hoping to go to Disneyland in November. I could afford to stay at a nicer hotel, eat at more expensive places but I would rather stay at a basic hotel and eat at counter service to save the money so that I can afford other things too.
  6. disney4us2002

    disney4us2002 Tagless by choice!!

    Jun 16, 2001
    Didn't you know here at the Dis, EVERYONE pays their cc off monthly. NOONE carries a balance, lol.

    Afford to me means we bring in more than we spend each month. I do not insist on having cash for a vacation that may cost $5K or more. If it takes me several months or even a year to pay it off, so what? We have stable jobs, plenty of savings for retirement, an emergency savings acct of 3 months' income. How I choose to pay for my vacations doesn't impact anybody but me (my family) so why does it matter?
  7. DreadpiratK

    DreadpiratK Mouseketeer

    Feb 21, 2001
    I'm not implying that it matters, in the sense that how you do it impacts me at all, but, having paid more than my share of stupid tax, I'm simply interested in continuing to grow in my understanding of matters financial , and so am curious about other peoples approaches to budgeting. From reading this board for a while now, there seems to be quite a variety of positions. No judgment was intended or implied.
  8. pigletto

    pigletto DIS Veteran

    Oct 27, 2007
    I no longer use credit of any type so afford it also means for us that it can't come out of emergency money or the regular budget.. unless I can shave the regular budget (put away our monthly mad money or shave grocery costs e.t.c).
    I don't judge anyone who can charge a trip and pay it off.. it's absolutely their choice. I just hated paying off things that had already come and gone. It was way harder to do it that way rather than saving up and being excited.
  9. CleoPahd

    CleoPahd Mouseketeer

    Jul 26, 2009
    I'm sure we're probably in the minority, but for years we went without and really skimped and saved to make sure we had a comfortable amount put into savings. There was a point in my life when I literally had just about nothing to my name. My life got a little sidetracked when I had my daughter 1 year into college. It was a huge sacrifice, but I've never carried any credit card debt. Credit card debt was the first thing I made my husband pay off before we got married. He never really realized how much he was paying in interest and that his payments were never actually touching his debt. It was a struggle for a few years of not buying anything on impulse...no fancy electronics, but looking back it was completely worth it. When we reached a certain larger number that was our "goal savings", we decided it was ok to splurge a little on vacations every other year. We do have a mortgage & a car payment, but we also bought what we felt we could comfortably afford in that department too.

    I really like Suze Orman and I think she makes a lot of valid points, though we made these decisions long before I heard of her. We have managed over the last few years to maintain at least one years + worth of salary in our savings. When we get our tax money back it goes right into the savings. Having a high interest bearing savings account has also helped because in the past when the interest rate was really high, the interest alone on our savings would almost pay for vacation. We also both have money in retirement accounts, but don't consider that our money...it's like it's there, but we don't think about it.

    We're finally at a point where we feel comfortable. We're certainly not loaded by any means, but we're doing ok. My daughter was 8 the first time we could afford a trip to disney as a family. Now we vacation every year, sometimes more than once. She's now 15 and she gets it. She says she didn't really ever understand why everything had to come from the clearance rack when she was little, but is glad now because now we can do things that many of her friends can't do. She has seen family members and close friends lose their homes, but saw them spend money on brand new big screen tv's, cable tv packages with all the bells and whistles, eating out all the time, etc. I guess what I'm getting at is it all worked out and I don't think my kid suffered because we waited to do things until we could "afford" it by our reasoning in what affording meant.
  10. BridgetBordeaux

    BridgetBordeaux DIS Veteran

    Jun 27, 2008
    We live beneath our means. We drive old cars, buy the house brand at the store when we can, use coupons, visit the thrift store about every month or two, cut our own grass and trim our own bushes, pay our CC bill off each month and it is a rebate card.

    We are within driving distance and now stay off site in order to keep the cost low.

    While there, we bring picnic type lunch items in the park and use counter service if needed.

    When we hit Mickey D's, we eat off the value menu (same for Wendy's)

    All of these efforts help us afford a trip to WDW a couple times a year on our AP. We get to drive the whole way, so transportation costs are low for us...about 100-120 bucks round trip.

    We could not justify the costs if we had to pay for airfare.....unless it was one of those crazy/super cheap fare sales.
  11. fabmic

    fabmic Mouseketeer

    Aug 22, 2010
    We can afford it if it is paid in full (room, tickets, transportation) before we leave, we have the money to pay off what we will spend on vacation, we are funding our retirement, we have no consumer debt, we have a fully funded emergency fund that will not be used to pay off what we spent and we are not behind on any bill.
  12. neatokimmo

    neatokimmo DIS Veteran

    Jul 1, 2006
    Now keep in mind, I've been super slacker girl this year, not tracking my spending as I should. But I've not bought crazy expensive stuff either so its all worked out.

    In previous years, and next year, I'll have a budget broken down into sections (have to have, want to have) and categories (utilities, toys, clothes, car maintenance, eating out, vacations etc..). I can afford it if I have the money left in that column. If I want something that isn't on my list, like say a laptop, I'll take the money from a fun section. I won't steal from "have to have" to get a "want to have", does that make sense?

    So if excel says I can have it, I can afford it :hippie:
  13. TnTWalter

    TnTWalter DIS Veteran

    Sep 13, 2005
    It's truly amazing the difference when the only person you owe is yourself. Our money doesn't go to Ford, Capital One, Sears Credit.....it goes to kids' college funds, vacations, new to us vehicles, household repairs, Christmas, etc.

    put in the smileys so my son could see them.
  14. QVCshopper

    QVCshopper DIS Veteran

    Dec 8, 2008
    Well, I think that people have many different levels of income. Some people make a lot of money; others make less. What really matters is how you spend what you have. I see this every day with my BIL, who is a dentist but also a bar tender and college professor to pay for his fairly lavish lifestyle.

    Not everyone has to scrimp and save to go to Disney, or anywhere for that matter. For us, we don't have a mortgage, car payments, etc. We're not rich and have never made an incredibly large amount of money (we're in the 15% tax bracket), but we watch our money and save as much as we can.

    I could *afford* to shop retail Gymboree, Gap, etc., but I choose not to. Instead, I just got a fabuluous Gymboree sweater (never worn per owner) for $2.50. So, it's really about making choices.

    Honestly, I don't save for a specific goal per se. We save for college, retirement, cars, and pay our bills and credit card off every month. Everything else goes into a money market for savings.
  15. Marionnette

    Marionnette Children see magic because they look for it

    Sep 26, 2009
    For us its simple. If there aint money in the bank to pay for it then we cant afford it. We even paid cash for our house. We have car loans. But there is money in savings to pay for them right now if we had to. But with zero percent financing why would we? Anything we put on a credit card. The kids dont have student loans for college. They would be at community college if we didnt have the money. I know that were not like most people. We arent rich but we are comfortable. But we always had this philosophy. Even when we were starving college students.
  16. Disney-Kim

    Disney-Kim DIS Veteran

    Aug 17, 1999
    For us it used to be the exact same as you ....available credit = afford it. :rolleyes1 and we crashed/burned same as you.

    We now live cash only and have learned to live on a budget...this was a huge change for us. But we have been successful in changing our financial ways.

    so to us...affording it means being able to pay cash for it.

    We can not go to WDW tomorrow if we wanted...it HAS to be planned. All trips are planned in advance and we have to save towards them.

    Vacations are important to us and we save towards them specifically.
    We also Ebay to help fund them.
  17. eliza61

    eliza61 DIS Veteran

    Jun 2, 2003
    For me it's not that cut and dry.
    First, I'm use credit and use it wisely. so I have no burning desire to be "Debt free". For example I had to replace my roof after the horrible winter we had on the East coast.
    Now the roof cost 12K, I was not going to deplete my savings by 12K when I could easily afford the 12 month free financing. So we paid cash for 6K of it and financed the rest.

    Same thing with a new car. Typically we spend around 25K for our automobiles. Would I pay cash for one nope, I fully comfortable with putting down a nice down payment and 0.9% financing.

    Vacations we generally save for but my 25 anniversary is coming up in 2012 and we plan on touring Europe for 25 days. This will also be the same time I'll have 2 kids in college so next year we'll start seeing how we can juggle all these things.
  18. ceecee

    ceecee DIS Veteran

    Apr 6, 2001
  19. Swimalie

    Swimalie DIS Veteran

    Sep 11, 2009
    Afford it means the money for the item/vacation/whatever is sitting in my bank account before I buy it. The only exception is a house and then it's a matter of looking at my husband's income and making sure no house will make us "house poor".
  20. WheelCEO

    WheelCEO DIS Veteran

    Jun 8, 2010
    I keep Suze Orman and Dave Ramsey on speed dial before I make ANY purchase! /sarcasm
  21. mamaLori05

    mamaLori05 DIS Veteran

    Feb 4, 2008
    Affording a vacation for us means having the money by the time we leave so that it is paid off. We tend to plan vacations close to a year in advance so that we can budget for it and put money away each paycheck so that we can pay it off before we go.

    Now, I'm not going to lie and say that we have absolutely no debt. We do have a mortgage, and we are about to add on a car payment (we buy new because we run them into the ground, buying used for our family doesn't make sense. We keep our cars for 10-15 years.) Affording a house and a car to us means that we can easily pay the payments each month and be able to have a few months payments set aside for "just in case".

    As for credit cards, we use them daily. Every once in a while we will have a SMALL balance carry over, but for the most part we tend to pay them off every month. If we do have a SMALL balance carry over we plan ahead and know exactly how and when that balance will get paid off (usually the next week). By small I'm talking under $100.

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