Travel debt

Old Oct 8th, 2007, 09:39 AM
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Life is too short!

My mother is 72 and is still "talking the talk" about taking a trip to Europe.

My husband and I never travelled anywhere with our families growing up other than an occasional trip to a beach. When we married, we decided that travel would be important part of our marriage. Now we're dragging our 3 kids with us.

For our family, we have a vacation fund. This is how we manage travelling each year.

I'm enjoying the journey while I can still move and am not going to be travellin with a walker!
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Old Oct 8th, 2007, 05:24 PM
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We opened a restaurant in our thirties and learned hard lessons about debt. We have borrowed for cars (modest ones except for the Prius) and the house but no credit card bill goes unpaid. We traveled but only when my parents took the family to celebrate one of their major birthdays. After 19 years of marriage we finally traveled by ourselves. In order to do that we saved for a year to have the wherewithal to pay the bills. Since then we save for a year and then travel. Though I will admit we didn't save all of the cash before we took our 25th anniversary trip in June. But the bills were paid when we returned.
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Old Oct 8th, 2007, 06:22 PM
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To each his own, but I'm with the group that saves for the vacation. Oh, I still have some debt, but it has low interest and I have paid it down consistently and expect to be debt-free (except for my mortgage) in another 3 years. Of course, by then I made need a new car, so...

But, I saved for my upcoming trip to Italy/France. Oh, I could have put it on credit cards, but I just know I could not enjoy the trip worrying every minute about how much it would cost me afterward. I think it's much more fun, too, to "earn" the money toward something you really want, whether it is travel or a new Hummer. I like the pot of gold at the end of the rainbow. I know I will enjoy my trip much more, knowing that I've already earned and payed for it!
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Old Oct 8th, 2007, 06:33 PM
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My logic in saving before I go is so I know how long and where I can afford to go...

If I save $2,000, I can budget my trip accordingly. If I save $5,000, it will be a longer trip or a more exotic trip.

If I use credit cards, then I don't have that budget worked out so how do I decide how long to go and where?
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Old Oct 9th, 2007, 06:02 PM
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Two houses - Only one with a mortgage.
3 cars - no car payments.
CCards paid every month.
One salary.

Although this might sound good - the 2nd house is a fixer-upper (think along the lines of no electric, plumbing or occupancy permit and you'll get the idea ) there will be no travel for the next couple of years- well, perhaps a short trip to NY and DH has a business trip to Florida later this month. I think I'll go and look at using some FF miles

We prefer to pay as we go.

Pity since I could really do with lying on a beach in the Caribbean for a week or so might be enough time to get the Red Mahogany stain out from under my fingernails - the parlour is looking good though.
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Old Oct 9th, 2007, 08:16 PM
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No money = no travel.

No debt = no worries.

One dinner in Rome > 10 dinners out at home.

One day in an amazing museum (Ufizzi, Louvre, Tate, etc.) > 10 nights at the movies at home.

One totally unique souvenir of a special place > 10 items of clothing.

Two admitted weaknesses: books and chocolate. OK, gelato too. So I guess it's a wash.
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Old Oct 9th, 2007, 08:41 PM
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I have a mortgage, a car payment and one credit card. I never charge what I can not payoff in 90 days. I work hard and earn a salary that allows me to squeeze in a trip to europe every other year. After last months market fluctuations and seeing that I lost more than 18K in one day, why not withdraw 3K for a vacation. Life is way too short and precious to wait until...

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Old Oct 10th, 2007, 03:58 AM
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I strive for balance.

My first trip to Europe was at 28. DH picked most of the bill as I was only beggining to earn a 'real' salary. Before that I was broke and did not travel.

We get a major vacation not more than once a year. It gets immediately paid for.

I owe a car I purchased for my mother. We keep completely separate finances so I owe DH some money that he loaned me to remodel a rental property. We dont carry CC debt at all.

Like Toedtoes, I use my budget to decide where/how long to go. Upcoming vacation might need to be cut down from 3 weeks to 2. Or shift from Italy to Argentina. Those are budget-based decisions.

I pray that I can celebrate my 90th birthday toasting with Bellinis in Venice. This means that I need to live financially responsibly NOW so that I can have a good time in the present as well as in the future. It might happen or it might not. I have hopes for my future so its not only about NOW.
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Old Jan 28th, 2008, 06:09 PM
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I am 55 now. For most of my life I owed money: for house, for land, for car, for education of daughters, for mistakes, etc... And paid interest

About 5 years ago, daughters grown up, no more education expenses, I got completely out of debt and started to save money. Now I earn interest

What a joy! What a bliss! No more debt, no more unslept nights.

I retired a couple of years ago and last year finally went on that much longed for trip to Italy (three months stay).

My wife and I had great fun for those three months. To my astonishment, when we got back home, I found out the savings were virtually untouched.

This was due to lots of planning and cautious spending: renting an apartment off season for three months in a tourist location can be very cheap, and you do not depend on restaurants, which are damned expensive. Public transport, instead of hiring cars, etc...

Got enthusiasmed and more confident...

Just got back, a couple of days ago, from a two weeks trip to Argentina - obscenely cheap compared to Europe and therefore not much of a burden on personal economy.

I started paying (second installment now) for an 18 days cruise to Europe in April 2009 - unbelievably cheap if booked and paid for almost a year and half in advance. Etc...

Booked another two weeks trip to the Amazon a couple of months from now, again off season with great a promotion.

Found out that, when you retire, if you are cautious, careful with how you spend your money and plan way ahead in advance, you can almost "live out of a suitcase".

I can't wait to see India, Russia, Nepal, Egypt, etc... (I will, before I die - that's for sure).

No debts and sound planning are a must, though.

I am feeling 20 years younger.

And gee... IT FEELS GOOD.
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Old Jan 28th, 2008, 06:58 PM
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The stages of my trips are paid at the time of booking. I pay the airfare usually 6-9 months in advance. So that charge on the credit card is paid the next month. Then some of the hotels charge the credit card for the first night and that is paid long before the trip. Next is the rail pass. I usually buy in about 5-6 weeks in advance, so that is also paid in full before I depart. So I really only need the money that I will be spending while I am there. The remainder of the hotels are charged on a credit card and paid off as they are billed. So, it's not like I have to come up with loads of money all at once.
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Old Jan 28th, 2008, 07:03 PM
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Tuscan - we have two car payments and a mortgage.

We travel. If we are not in revolving unsecured debt and have a viable income... I will travel
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Old Jan 28th, 2008, 07:50 PM
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My mother always told us to "spend money on memories, not things."

I'd much rather be paying CC debt remembering a trip to Venice or other great vacation, than paying CC debt for a remodeled kitchen or a TV or....

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Old Jan 28th, 2008, 08:12 PM
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Chartley and Momliz, agree with you both! I've been lucky enough to do some traveling, but had three major (two were life-threatening) illnesses that restricted most travel in recent years when I finally had time and money. I wish I had traveled more with my children when they were teenagers and more myself, before the health issues. While I don't advocate being irresponsible, if you can make it work at all, just go and do, especially with your kids.
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Old Jan 29th, 2008, 12:36 AM
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I am another one that does not believe in debt & learned that one early. It does not feel right living off money that you do not have. You can say it does not matter, but studies show that it adds tremendous stress to life to live under debt.

Live smart, live beneath your means!

It is interesting that I recently read that a study of people who retire early showed that all had this attitude about debt.( We retired early in our early 50's). None had EVER had any debt except a mortgage and all had always lived far below their means.

It made me smile, because that is how we always lived. We enjoy finding ways to live large on little and hate wasteful spending.

Travel really does not cost that much. Buying and Maintaining all the endless, useless STUFF is what eats away most peoples freedom.

We are traveling the world with a lot of luxury and living on much, much, much less than at home. We live a life of travel on 25K a year or less, while we continue to grow our nest egg with all the money we save.

So one certainly does not have to have debt to travel or live large. As I teach my daughter, it is not the one who buys the most stuff who wins, it is the one who saves and invests, so that their money works for them. Why be a slave to stuff that just soon clogs up basements and garages?

As we enter a US led serious global recession & severe credit crunch, it is an especially bad time to have debt and cash will be king. Most Americans are just a paycheck or two away from destitution with nothing saved or invested....even baby boomers.
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Old Jan 29th, 2008, 12:52 AM
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Oh and for those that do not know we retired with our 7 year old child, so you do not have to wait to travel or retire until a child is grown. Our expenses include all her homeschool needs, including her own mac ( although she does go to school in her second language while we winter in Spain, primarily for the language/cultural immersion).

Since flights are one of the main costs of travel, if you stay longer, you save a lot more money and have a deeper experience with the culture.

Yes it is wonderful to travel as a family and with children, but I do not think it is worth debt. If one stays longer in the off season it is very cheap.

We have a beautiful, brand new 3 bd, 2ba ocean & mountain view village house in a gorgeous 15th century white village in Andalucia with cable TV and adsl that goes for a pretty penny in the summer high season by the week, but is only 650 dollars a month is the warm winter.

By staying longer, the kids also get a real experience about what the culture is like and my child will have lifetime friends from all over Europe.She is already emailing kids from around the world.
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Old Jan 29th, 2008, 07:36 AM
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I am the original Poster and would like to mention that I am retired and will be leaving in 3 weeks for a winter trip in England. Paid for my rail pass, flight, and a couple of hundred pounds in cash. I will write a check for the remaining expenses when I receive the bill. I strongly believe that one should not go into credit card debt for pleasure. MY wife worked hard all of of our lives as did I. We have had a good life, seen a lot, met a lot of people. But the key, when young, we saved for a trip and went without movies and dinners out in order to have the funds. Today, of course, life is good. Enough money to basically do what ever, however, we enjoyed our trips when we had to do without something else. Trust me, don't just live for today, stay out of credit card debt.
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Old Jan 29th, 2008, 07:47 AM
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Different methods seem to work for different folks.
For me personally (I am a CPA, married to a CPA, and the daughter of a CPA ;-) ), I couldn't sleep at night if we were to carry any debt other than our mortgage payment. We bought a house far less expensive than what we can afford, max out our retirement savings every year and stash excess funds away in other savings instruments, and reward ourselves for sticking to our plan by taking 1 or 2 trips to Europe a year.
This works well for us. Being able to take a couple trips a year really helps motivate us to be very disciplined throughout the remainder of the year, and hence we have beaten our financial goals every year since our marriage in 2004.
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Old Jan 29th, 2008, 08:32 AM
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mjslacker, it's not a choice between debt for travel or debt for material things. It's a choice between debt or no debt. Credit card debt is not the standard, expected condition. I bet your mother didn't tell you to go into debt for your memories.

I wonder if perhaps the value of J_Correa's house has gone down and if it will still be worth enough to pay back debt and provide a down payment on his next house.

What gets me are people who say, because they work so hard or life have been difficult, they deserve a splurge, a splurge they can't afford. If you can't pay for it, it doesn't matter how deserving you are.
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Old Jan 29th, 2008, 09:06 AM
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Credit card and consumer debt is such an interesting topic. It evokes all sorts of moralizing and tut-tutting, self-righteousness and accusations, defensive crouches and yes buts…

I guess my view is that people are different, and everybody makes poor choices from time to time. And of course one person's "poor choice" is another's "seize the moment." There's a matrix in us that arrays life experience, technical knowledge about finance and money topics, moral values, opportunities and drawbacks, urges and restraints.

How many little sayings can you dredge up about this? "A penny saved is a penny earned." "A borrower nor a lender be." "You can't take it with you." And one I'm very partial to, "The future is uncertain - eat dessert first."

I am certainly in no position to tell somebody that travel should be postponed until credit card debt is extinguished, any more than I can say that a new fridge is more important than a stack of photos from Venice. Multiply these varying personal values by around five billion and you have a global economy. Lots or room under the tent.

For us, we manage credit card debt the same way we manage real estate debt and other expenses - carefully, but not obsessively. Many millions of people don't have income that comes in regular monthly or weekly chunks, us among them. Instead, some months you make more than others, because that's the way it works. So sometimes credit card debt works best for relatively big-ticket items, like advance-purchase plane tickets or cruise fares, then paid off when the irregular income (which is statistically predictable, just not clockwork) hits. For us, we don't generally keep great liquidity in our savings, so credit facilities like credit cards or homeowner lines serve a purpose - an instant resource that doesn't require disposing of illiquid assets where the exit costs outweigh the benefit.

But that's us, and we're not you, or you, or you over there.
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Old Jan 29th, 2008, 09:12 AM
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Although we have debt, we have what we refer to as the slush fund. It is primarily used for travel but it has been used in the past when the fridge and clothes dryer died.

Incidentally, when the dryer died, I was gung-ho to get a model with all the electronics gadgets & goodies. Faced with a price almost double that of a regular, garden-variety dryer, I opted for the cheaper model. I went the reverse for the fridge, as I had lusted after a bottom freezer for years. I still fondle my fridge as I pass it. But I digress.....

To sum up, we save up separately for our trips, enough we may have other debts. Life is too short to be all work & no play. We are responsible people but also want to enjoy ourselves while we can.

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