Travel debt
 

After reading about people going on trips while they have outstanding debts, say, credit card debt, I wonder how they can justify increasing debt? Wouldn't it make more sense to pay off all debt, then travel, or it this more self gratification? I am not saying it is right or not, just trying to understand.

My reaction to reading about traveling while having outstanding debt was to feel guilty about my very small mortgage payment and reasonable car paymnet (together they don't equal most mortgage or rent payments).

Maybe we shouldn't go at all until we don't have a mortgage, no car payment (which has happened through most but not all of our adult lives). But then I just don't know. I guess I would not go if I had cc debt, or other debt.

I'm curious if others with mortgage/rent payments and a car payment travel. We bought a two year old car, put down a large amount and financed the remaining. It is a very average, smallish car, with high performance and safety ratings. Am I just justifying travel while I'm paying for a car?

Anyone else want to comment?

I don't believe in owing money with an exception made, perhaps, for a house and college (as Christina recently said on another thread.) I love nothing more than travel, but I make a modest income. So to pay for it, I live in a small condo, drive an economy car, and shop at discount stores (it helps that I'm childless). And although my trips are becoming increasingly luxurious, I have stayed in some dives and and survived on street food on many trips.

I can't enjoy myself knowing that I am spending money I don't have.

Debt is not in my dictionary. We do have friends who take money out for travel - I cannot imagine. We have never owed money for vehicles or anything but of course on houses. That is the only thing I personally would be in debt on. We do not use credit cards except for booking things where we need a number.

One thing that bothers me more than almost anything is living beyond peoples' means. For example, we heard of a poor family we hadn't met so took over groceries anonymously, feeling for them. Well, immediately after that we heard that these people somehow purchased a 5th wheel and are now in the process of building a 4,000 square foot house! No longer feel sorry for them. I know how much they make - one makes minimum wage and the other an average wage. And they will be in debt until the day they die. And not just a little debt, either.

While in university I was dirt poor. Did dirt poor things, bought dirt poor food, had a dirt poor apartment, walked 38 blocks to university (was in great shape!), just because I refused to do it any other way. Like many others, I'm sure, I worked two jobs while in university to avoid student loans.

I personally would not feel right about taking out loans to travel but that is my opinion. My husband is a Chartered Accountant so our minds think alike!!

rogerdodger, I know of one instance in which a close friend (a woman) went through a divorce and took a month off that she really couldn't afford but came back with a new perspective and got it all back together very quickly.

But that is rare. More often, people do it for other sorts of reasons. Sometimes it is because some people have an insatiable desire to appear <i>cool</i>; or because they constantly crave attention and one way of getting it by talking about things others don't do on an everyday basis; or because they don't understand the basics of financial discipline or planning. It is for the same reasons as why some people drive cars that are more than their annual salary (I am referring to instances where they don't have trust funds)! May be something to do with parents not hugging them enough times?:) I don't know.

Frankly, it is really kind of sad specially when you are close to someone who is otherwise sweet and gentle but with an incessant desire to impress you, and you really want to gently shake it out of'em! One can be cool (heck, ice-cold) without the constant need to always live in the moment by consuming one's future.

I don't think I can enjoy my vacation if I had a lot of bills to pay. I didn't travel until I was 28 because I was saving money to buy a house.
My husband is the same way, no traveling or extras if there are bills to pay.

Like the OP I am not saying my way is the right way, it just works for me, then I can justify ordering that lobster for dinner or buying that beautiful purse and 4&quot; high heels.

We have credit card debt and we still travel. We don't increase our debt to travel though - we have a travel savings account that we put money into throughout the year.

Our credit card debt is not outrageous and we have a very low interest rate. Most of it was incurred fixing up our house, which we plan to sell in a couple years, using the equity to pay off the debt and as a downpayment on the next house. In the mean time we pay down the debt each month.

To some, this may not seem prudent, esspecially to those who are esspecially debt adverse. It works for us though, and I am not about to let life pass me by because our finances are not absolutely perfect.

Few can ever go without debt at least not when they want to go, the memories and pleasure from travel after a year's worth of work, far outways the debt. Why wait until retirement, and even then who knows if a person will be able to go - I adjust my staying &amp; eating to a reasonable budget. Also, there's plenty of free sights and things new in another country without going hay-wire.

I have no debts and am one of the unpleasant people who talked about not traveling when in debt on the other recent thread.

However, being in debt and being behind and/or unable to make your debt payments are two different things. If you are still diligently paying off your debts, you should be totally free to do whatever you want with the rest of your money (or credit).

I have been too reasonable all my life and missed out on those exceptional occasions when one can pursue a passion or live a dream. I have always admired people who have told me why they dropped everything and went halfway around the world without a second thought.

But I make a distinction between falling in love and needing to immediately go to Buenos Aires or the Maldives to seal the deal, or a lingering and constant desire to see Rome or Paris, which will still be there next year, in 5 years, in 10 years or even later.

I think if you do not have much invested and/or your net worth is very small and on top of that you have debt, travel is probably something you should think twice about.

HOWEVER , when you have lots of wise investments and your net worth is very high, but you some some reasonable debt and have a good solid plan for paying it down ( much more than just minimum payments on credit cards), I would not put off travel. Life is just too short for that.

But with that said all of the vacations are paid in cash.

We are in the camp of always paying yourself first; this is why we have alot of very wise investments and high net worth.( we also do happen to make alot of money as well) I know alot people pay off all the their debt; a good idea, yes indeed, but still have very little to show for it.

In the long run, plan to have enough money so you don't outlive it.
The small amount of debt we owe ( mostly houses and 1 car and some cc debt) is peanuts compared to the amount we have saved and invested and our total net worth. That's why we travel so much.

I went on my last trip though I had about $2000 in credit card debt. I charged the whole darned thing, and I now owe $5000. I wish I'd had enough self-control to pay off my debt before I traveled again, but I'm still glad I went.

I just transferred that balance to a card with a $75 transaction fee and a 1.9% interest rate, so interest rates aren't going to break me. I'll have it paid off within a few months anyway.

I don't have other debts than my mortgage, though I do have expenses that are as unavoidable as debt--insurance, utilities, etc. So I don't feel guilty about traveling while still owing money.

I am creeping up relentlessly on 72 years of age. Time is getting away from me. In a little over three years I will no longer be able to rent a car in Europe. I'm in good health and pretty good shape now, but who knows what lies in store for me, ready to spring out and bite.

The other problem is that having a debt makes me reasonable about how I spend money. When I have no debt, I get carried away, and I tend to spend too much on the house and the yard, and I get OVERLY generous about giving money away.

There are worse things to be in debt over but I don't like paying interest.
So, no debt for us but I think it could be worse. Imagine owing money on clothes you no longer wear or are out of style, or Christmas gifts you gave people that they sold at their last garage sale.
At least with travel you have good memories.

I have a completely cavalier attitude about travel debt. I do what I want and then figure out how to pay for it and erase any debt I might incur in the short run. But I'm not on a fixed salary and have almost limitless opportunities to earn extra money if I want to and am willing to work very hard, which I am. The down side to that, of course, is that I very rarely get to do an all-out &quot;vacation,&quot; where I'm unplugged from my work and obligations. Suits me fine, though. I'm also not extravagant and don't need fancy hotels or Michelin meals, except for the very occasional splurge.

Travel is a privilege and a luxury. I pay cash. I have no debt. In order to go more often, I've been known to stay in hostels and eat picnics. I've also had a few luxurious experiences but mostly they are the frugal kind and it makes for a wonderful trip.

While putting children through college and paying off a mortgage I didn't travel much or far. I'm making up for that now. I also pay cash for cars so no SUV's or luxury vehicles either.

I can happily say that I've never paid a penny in interest charges on credit cards, but if I did, I guess I don't see any real difference in adding a worthwhile trip to that debt any more than buying clothes, Christmas presents, a new computer, going out to dinner, or about a thousand other things. I agree that the travel memories will last a lot longer than must &quot;stuff&quot; you can put on a credit card.

Ditto St. Cirq!

We've always traveled, even when we were younger and probably could have used the money for more practical purposes. One thing we have never done, though, was to go into debt for our trips. We saved throughout the year for our travels, and did not stay in high end areas until later in life. Even now, we try to be as economical as we can - i.e. renting apartments rather than expensive hotels, eating in much of the time, searching for the best fares, etc. We can take a month-long trip for the same cost that many people pay for a week.

Other than our mortgage, I refuse to pay interest on anything.

Personally, I do have debts and as long as I can pay them, I will not stop traveling. What will stop me traveling is age and poor health and since time flies by so fast and poor health could surprise you at any moment...I will travel while I'm healthy and capable, then I'll worry aobut paying off my debts.

Too many people put things off until the &quot;right time&quot; and the right time may or may never come.

Somehow when I'm older and unable to travel, I'd rather have the memory of &quot;when I was in Venice drinking a cappucino...&quot; vs &quot;when I had no debts and stayed at home stifling my traveling desires bored to death&quot;.

It realize it is not wise economics, but travel is one thing I will carry a small amount of debt from.

Of course 'debt' can mean different things to different people, ranging from putting clothes on the children and feeding them, or paying for that giant flat screen TV and new car. I suspect that most indebted Fodorites are in the second category.

True true, I am single with no dependents so my finances are my own and affect no one else.

People who can not &quot;afford&quot; to travel and people who travel while having debt(s) are obviously not created equally.

If one lives paycheck to paycheck &amp; does not have an emergency savings, I agree they should not travel.

However, being in debt should not prevent some from traveling. In our state, one should always have a mortgage (debt) for the property tax deduction. Most Americans who own a home have a mortgage. That debt should not stop them from traveling.

Even when DH &amp; I can afford to pay cash, we always borrow ALL we can at 0% &amp; low interest. Then use our money for investment at a higher rate and/or tax advantage. That qualifies as &quot;debt&quot;, but we travel a lot. On 0% interest, we bought our last 2 cars (3yrs 0%), our $4500 TV (1 yr), our furniture (1yr), and our last PC (1yr). That did not prevent us from traveling &amp; should not have done so. Obviously, we pay off the loans before the interest begins.

To me, there is no one answer for everyone. If one's net worth &amp; income is high enough, debt is not an issue in deciding to travel.

Age also matters. We are in our 60's, been retired since 55yo, &amp; have a spend down plan for our investments/savings. So debt would not matter in deciding whether to travel.

No shoe fits everyone.

Julie

Agree no shoe fits everyone. A financial planner would likely tell me to stop traveling for a few years. So it's a good thing I don't have a financial planner.

When I'm on my death bed, my &quot;net worth&quot; will mean absolutely nothing to me. As my dearly departed grand-mother would say &quot;I've never seen a hearse carry a U-Haul.&quot;

I'm the opposite. I pay for my vacations, never charge. As to the other debt for whatever... screw it.
It'll get paid when it gets paid.

Prefer to travel now when I can, then be sitting there in my 80s (if I live that long) in that rockin chair having the words &quot;could've&quot; &quot;should've&quot; &quot;would've&quot; pass my lips. Rather have the memories of the adventures and tales to tell, whomever wants to listen to a crotchedy old lady :)

Life's too short... eat dessert first!

I'm similar to Sandi. I always pay cash for my vacations. I charge little normally, but will occasionally buy something expensive, charge it, and pay it off on time.

If I don't have the cash to cover a trip, I don't go. The year before last, I bought a new (used) truck. I'm paying on time. That first year, it took a bit extra to start compensating for the car payments, so I didn't go on vacation that year. This year, I was back on track so I took my vacation.

I do think there is a difference between going into debt irresponsibly and having some debt while enjoying life.

I had resisted posting on this thread, but now that the OP on that other thread has answered, I must say that it was exactly what I feared. That OP was saved money for a trip at the neglect of her debts. That is just bad form.

Normally in those cases, the OP should really take that money, pay off her debts, then start saving for a trip. But since money had already been invested in the form of a plane ticket, it was best that OP go on with her trip. Why waste that debt?

I just hate paying unnecessary interest, home mortgages and car payments aside. Credit card interests are the pits!

That's not to say I don't use my credit cards. I like the cash backs and points! I just pay it all off at the end of the month. And after that and saving in 2 separate accounts with 2 separate purposes, I'm broke at the end of each month. ;)

Yes, &quot; 'debt' does mean different things to different people&quot;.

You are responsible to yourself both financially and emotionally, often one is at the expense of the other. Both are important.

Not everyone is debt free. Often debt arises from totally unforseen and uncontrollable circumstances. Sometimes the need for emotional survival is urgent and overwhelms a pragmatic and dutiful fiscal response. I once took a trip that was really not within my budget. I met an exceptional person who triggered the most profound shift in my thinking in the last 15 years. This cannot be measured in dollars/euros.

Outside of mortgage payments I have never made a car payment or any other interest payment in my life, including credit card interest, and I have never paid an annual fee for any credit card.

I do charge everything I can on one of my credit cards including utility bills, but I pay the balance in full each month. I receive FF miles for this credit card.

I haven't travelled as much as a lot of Fodorite's but I feel I have had some very wonderful trips. I always have the money available in my money market account to pay for all the charges on my credit card when the statement arrives.

I have always been conservation when it comes to financial matters. That has worked for me. As far as what others do I don't worry about it although I admit I have cringed regarding the way some people I know have handled their finances. But it is not my business of course. I am just glad that I am happy and relaxed with the financial decisions I have made.

Some persons reach the most ridiculous and contradictory conclusions when they try to manage other people's finances...much less, their own.

I can cite a personal experience.

About 30 years ago, when banks first introduced charge cards, some uptight bankers debated whether or not charge cards should or should not be used to pay for certain products or services.

One particular fellow, I recall, became very red in the face when it was proposed that groceries be charged on the card. He thought this practice would lead to all kinds of spendthrift spending. &quot;Besides,&quot; he shouted, &quot;how do you repossess food?&quot;

The reply he received: &quot;We are not proctologists...we are bankers. And so tell me, how do we 'repossess' an airplane trip?&quot;

The banks accepted cards, thereafter, for anything legal.

USNR, ironically that banker wasn't so far off. Just a couple of days ago I saw (on Today?) a piece about how much more people charge when they use a credit card instead of cash. Of particular note were fast food restaurants and groceries. The main reason fast food restaurants started taking credit cards is because they quickly learned that people will buy more when using a CC than when using cash. They add the &quot;super size&quot; or a dessert for example. And those who use cash at supermarkets are far less likely to pick up the &quot;big ticket items&quot; or to &quot;stock up&quot; on things like wine than those who are going to use a credit card.

&quot;And those who use cash at supermarkets are far less likely to pick up the &quot;big ticket items&quot; or to &quot;stock up&quot; on things like wine than those who are going to use a credit card.&quot;

We use our air-miles credit card for EVERYTHING we can - utilities, insurance, travel, and yes, even groceries. But we pay it off every month. We never pay a penny in interest; otherwise it would not be worth using the card. And I don't think I buy more with the card than I would with cash.

I know I don't charge more on my FF credit card than I can pay in full when my monthly CC statement is received. And yes I put utilities, groceries, insurance premiums, gasoline, travel expenses, shopping purchases, you name it on my credit card. But some people know what they can afford and some do not.

I feel very old fashioned. In high school we were taught that, with a few exceptions (travel not one of them), interest is something to be earned not paid. It was a lesson that has served me well.

Debt and Travel. The world's economy is based on debt. Some debt is the result of irrational decisions to borrow money using a credit card and then paying 36% interest! Today our banking system is writing off billions of dollars of owed debt because they lent money unwisely. Anyone without debt should also be aware that they are paying for this debt because of increased prices. Merchants add dollars to their prices to cover non-payers. Bankruptcy allows credit abusers to escape their financial folly. Guess who pays for that folly.

There are times in our lives when we have money, and times when we do not. For most people, it is when they reach late middle age that they have most money. Their house are paid for, or their mortgages are low, their earnings are highest, their children have left home, they may have inherited wealth.

Younger people with children are often the least well-off. However, that is a time when you have more energy and can tolerate less comfort. Taking your children to visit other countries can be very rewarding, and will give you all memories that will bring you together as a family. Borrowing money to do that, provided you are careful, can be worth doing. If you wait until you have the spare cash, you will wait forever. Your children will have grown up and left home.

&lt;&lt;If you are still diligently paying off your debts, you should be totally free to do whatever you want with the rest of your money (or credit).&gt;&gt;

Absolutely!

The main issue is how much debt the OP is referring to. I see no reason to wait until being &quot;debt free.&quot; Having a manageable balance on credit cards shouldn't keep anyone from traveling, but it's a different story if the cc debt is large and traveling would put it beyond the person's ability to make timely payments.

I'm curious if any of the people who think nothing of traveling on credit and then paying their miminum or even just not paying their full balance monthly on credit cards are the same ones who post on the Europe board about which credit card or ATM card to use to avoid paying a 1, 2, or 3 percent conversion fee. Kind of seems silly to worry about the latter and not the former.

&lt; &lt; Younger people with children are often the least well-off. However, that is a time when you have more energy and can tolerate less comfort. Taking your children to visit other countries can be very rewarding, and will give you all memories that will bring you together as a family. Borrowing money to do that, provided you are careful, can be worth doing. If you wait until you have the spare cash, you will wait forever. Your children will have grown up and left home.&gt; &gt;
Chartley, you are entirely right, and that is why we travel now - although we are older parents, we are dipping into our savings so that we will have less for our golden age. But, the golden age is now! With the kids we have traveled around the States, we went to France, will be in Egypt this winter and Botswana next. The kids have had experiences that not many their age have had, and have had their minds broadened incredibly. We waited till the kids were old enough to remember the trips, and were somewhat settled financially and career-wise.
We are selling off a bad investment (a rental house) at a loss to get out of some debt and free up more income so as to travel more.

I do have a mortgage, and college loans, and credit card debt (all cars are paid in full). The credit card debt is all on 3% or less - even the house is less than 6%.

I do travel, because the credit card debt will be paid off when husband gets out of college and starts working. We traveled to Maine this summer, to visit his grandmother - at age 92, she probably won't be around when we're out of debt.

I am also planning on having a baby - something others say we shouldn't do when in debt. However, we are still planning on it. Can't wait forever (I'm 38).

I am fiscally responsible, and know all will be paid off eventually. In the meantime, I keep my cash flow going and the debt going down.

I used my bonus to pay my last trip to Paris. Waiting decades might work for someone else, but I don't come from long-lived people and no one can tell me how far I'm going make it. My mother is nearly blind and in her mid-50s. Should that be my fate, I'll have the sights of Paris etched in my memory. And also, the memory of the spring time air on my still young and smooth skin as opposed to whatever it might be like a few decades on.

No place is guaranteed to always be there. That's what I learned when WTC fell and when New Orleans was flooded. Those places will never be like they were *before*.

There are many ways to regard and deal with finances. One has to choose and live with the consequences as best one can.