As it seems everyone is adverse to having any type of debt. I'm not like that I don't feel the need to pay off my student loans immediately and not be able to take vacations and do fun stuff with it first. DVC goes towards our vacation fund. We did finance it but we paid it off in less then a year. The money we spent on interest was LESS then the money we saved on just one trip down, and we already took 2 and have the third booked so no that wasn't a waste either.
Yes, I am very adverse to debt. I know that life moves fast, and although in your early 20s it seems that it's fine to put off saving . . . it's no time at all 'til you're ready to have kids . . . no time at all 'til it's time for braces, cars and college . . . and most of us could be doing more to plan for retirement. There's another thread on this board right now about a woman whose husband became disabled and will never work again -- that could be any of us in a year, two years . . . and in that type of circumstance, pre-existing debt would feel like an anchor around your neck. And it doesn't have to be something as devestating as a disability: What if your carefully planned baby turns out to be twins, and you face the choice of paying daycare x 2 or losing one income? What if you find yourself a member of the sandwich generation: Needing to financially/physically care for aging parents at the same time as you're paying for your children's college expenses?
If you save a little too aggressively, it's not a problem -- you can vacation more later, give your kids a nicer wedding than you anticipated, buy a beach condo. If you save too little -- well, it's a big problem. Then you're looking at staying in an apartment when you've reached the point you really want a house, forcing your kids into student loan debt, postponing retirement, or other choices that you probably don't want to make.
Don't make light of debt or rationalize it away by saying, "It's only this small amount". This is the best time in your life to pay it off and avoiding accumulating more of it.
My annual dues were twice as much as what I'd spend on a room for one week. So it made financial sense for that to be earning interest for me instead of just forcing me to take a vacation every year or two in accommodations I didn't need. Alot of the "DVC saves money" is true, but only if you would have taken that exact same trip out of pocket. Just because it saved money for what you are getting doesn't mean it saves money on what you normally would have spent...if that makes sense.
It makes perfect sense. To justify a DVC purchase you must compare your cost to upscale rooms (which, of course, you get with DVC). But that
ignores that you have the option to take a Disney vacation and stay in a much less expensive room
for considerably less than the cost of DVC. When you're young and just starting out financially, it makes sense to go the inexpensive vacation route.
I don't know how much DVC the OP owns, but for the cost of it, she
probably could've discharged one of those student loans AND STILL have taken a shoestring Disney vacation.
(He grew up in a house where collection notices were routine and still has many friends for which "afford it" means there is enough room on the credit card without maxing it out). I think it makes more sense to pay off debt first then build up the cash for 6 months once I am debt free.
I grew up in a house with no money also, but I always felt afraid and embarassed -- and it made me determined not to continue to live that way as an adult. Financial security is well worth the effort it takes. You're right that you should pay off debt first, then build up various savings accounts (emergency fund first, then house savings, short-term needs savings, and retirement savings).
