Vacationing in Debt-What Do You Say?
Like many PF bloggers out there I am in debt, but I have a plan to rid the debt, get back to EVEN STEVEN, and become Financially Independent. I have a BUDGET all set up for expenses and even have my a large portion of my 7 year plan mapped out sitting in an Excel sheet. With a vacation coming up, this got me thinking are vacations part of my Financial Independence plan? There is many different views out there, let’s take a look first at the always controversial but very well-respected, Dave Ramsey.
In a question and answer on The Christian Broadcast Network, a reader asked how much of a percentage should they dedicate to vacation while they are in debt? Here’s what Dave Ramsey had to say:
“I think you should put vacations on hold while you’re trying to get out of debt. My family and I didn’t go on vacation for nearly 10 years while we were getting out of debt. Why? Because we had work to do! We had bills to pay and kids to feed. That’s just the way it goes sometimes.”
Dave Ramsey didn’t go on vacation for 10 years?!?! I mean he is a multi-millionaire so I can’t argue with the end results, but are you ready to skip seeing Grandpa and Grandma in lovely Montana or decompress from work with a beach vacation in the Bahamas? Let’s see what other PF bloggers have to say.
I checked out the other side of the coin and found Vacations While in Debt, that doesn’t sound like 10 years of NO vacations at all. The article asks a couple of questions:
“So, should I have taken this trip? I’m in debt after all, about the get married and go on a honeymoon. Did I really need it? Should I have taken it even though I still have $8,700 of debt left owing?”
My Alternate Life answered some of her own questions here: “I’d say this vacation was actually much more important that being debt free a few weeks earlier than scheduled.” This is far away from not taking a vacation, they make it clear, they know this will hurt their plan, but it will have a small effect on their long-term debt free plan.
Are you ready to take your trip and not make that big payment next month so you can have a Pina Colada and work on your tan? Does this put your Ragnar Lothbrook attack on hold? Are you just holding the battle-axe for show?
Well we have seen both sides, No Vacation Ever and Vacation is For Me, I’m sure there is something in the middle, there is more than one road in personal finance. I came across Frugal Rules on his thoughts on summer vacation while blogging on Dimespring. Here’s a quick summary from Frugal Rules on his thoughts about Vacation while in Debt:
“If you do find yourself in debt, I would say, without a doubt, that you should be focusing on paying that off, especially if it comes in the form of some sort of consumer debt like credit card debt. Beyond that, it becomes more of a gray issue. If you’re a reader of many personal finance blogs, you know that you can pretty much find at least one person who’ll agree with you no matter what side of the issue you land on. That said, the question of going on a trip or a summer vacation is one that can be a tricky subject.
While I would be cautious about going on vacation while in consumer debt, I do also know that life gets awfully boring awfully quickly if you’re all work and no play. Take it from someone who has been through it: debt payoff fatigue is real and you want to avoid getting close to it as it can possibly impact your debt repayment. The key is to analyze if that fun will be worth the cost and give you a breather in the debt repayment game.”
Here’s what I took away from Frugal Rules. Pay off debt, especially if it’s consumer debt, but you know that paying off debt isn’t the most fun in the world so go ahead and go on vacation just don’t make your vacation staying at the Ritz Carlton, spending your next 3 paychecks so you can relax.
Wellheeledblog has a similar dilemma of the go on vacation while I’m in debt conundrum. She maps out the numbers and even a couple of scenarios, she’s just not sure what to do, go on a vacation of a lifetime to the Galapagos Islands or Just Say No like a DARE promotional video. That’s the thing it’s a really tough decision to make. Live in the moment and go on a vacation or strive for the future happiness that’s off in the sunset? What do I say in this Vacation on Debt Argument? I’m glad you asked:)
Here’s some of the rules I follow. I believe you should be able to take a vacation even when you are in debt. However the vacation must be paid for in cash, it doesn’t make much sense to be attacking your debt to only let a vacation to South Beach drown you in an ocean of debt.
The vacation cost must be to visit friends or family. Taking a vacation to see the people who matter to you is important and I don’t think that should be cut from anyone’s life. This also does a couple of money saving things for your budget. It allows you to stay at their house thus cutting any hotel costs from your vacation. The second money-saving opportunity is it allows you to cook and eat at home. Maybe your friends and family will offer to cook or you can go to the grocery store to make some new home cooked meals, but this will cut out all the expensive meals that go along with your vacation.
Those are the rules I follow when I vacation, I make sure to save up and pay cash, stay with friends and family, and cut costs with cooking at home whenever possible. Yes I vacation while in debt, I’ll be going to see my parents very soon.
Now that you have read and seen what others do, what do you have to say about Vacationing in Debt?
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