I have been getting quite a few emails from loyal readers in the past few weeks, really ever since the start of 2013. I enjoy getting reader emails because it not only shows that they want to engage with me, but they also are looking for answers from someone that has “gone through it”. I may not be a financial professional, but I do carry around some common sense in the good ol’ brain bag.
A few readers have emailed me with similar questions regarding debt and vacations. I won’t get into the specifics of the emails, but I will address my concerns here about the trends between the two emails.
When I was digging myself out of my credit card debt mountain, I realized that I wasn’t going to be taking any vacations in the near future. My wife and I like to have a good vacation at least once a year with some smaller, yet still equally good vacations spread throughout the year. This was our lifestyle until I put myself on a strict money diet.
I realized that if I owed credit card companies over $50,000, then I needed to pay my obligations. I used their money to finance my lifestyle and they wanted it back. Yes, I could have added another expensive vacation onto my credit card and been done with it, but that is not how I roll (at least now that is not how I roll, a few years ago, maybe!). Once I committed myself to paying off all of my credit card debt, I was going to complete my challenge. Here is my word of advice to those thinking about vacationing while being in debt.
The readers that emailed me were asking about how I thought about spending money on a relatively expensive vacation when they were still in a good amount of debt. My answer was simple and to the point. It is NOT a good idea! If you owe money to a credit card company, on student loans, or any other type of loan (I will exclude a mortgage), then you should not be spending money on expensive vacations. There is no point to it. You are just either adding to your debt or increasing the amount of interest you will pay because you are using money that could be going toward your debt. It is a lose-lose situation.
Some of you may remind me that I am an advocate of rewarding oneself when working on a large challenge such as paying off debt. While this may be true, I do NOT advocate rewards costing a lot of money. Vacations would be in this particular category. When I was in the game, I paid myself with a dinner date with my wife. I might have went to the movies, but I did not pull out my credit card and buy myself an iPad or charge up a vacation. That would be just silly and without reason. These are not the type of emotional rewards that people should be using.
The rise of the Debt-cation
Yep, I just coined that term, Debt-cation! What I mean by a debt-cation is when you create a vacation away from your usual life and don’t spend much doing it. My debt-cations were usually camping trips or trips to the beach to stay with relatives. These usually only cost me about $100 (gas and food) for a 3 day trip and you will be hard pressed to find something that cheap, even on the internet.
If I was going camping, it usually only cost me about $50 because I would share gas money with friends and the food is expensive when you are hiking (I don’t car camp often). I want people to get away from their normal lives once in a while, but you should never spend a lot of money doing it.
If you are in debt and you want to go on a vacation, you better make sure it is a debt-cation. Spending a lot of money is always ridiculous when you are in debt, but it is especially crazy if you want to spend that money on a vacation. I don’t condone this activity and I won’t tell anyone to splurge on a vacation just to provide themselves with a little emotional reward when they hit a debt payoff milestone. That defeats the whole purpose of getting your financials in control.
Do you think it is wise to spend money on a vacation when you are in a lot of debt? I want to hear what you have to say!