Monday, October 17, 2011

Vacations paid for using the Credit Card

This is a question raised to Dave Ramsey from one of his listeners:

Is there a recommended vacation percentage?

This is a question raised to Dave Ramsey from one of his listeners:

Dear Dave,

Should you skip vacations when you're getting out of debt? Also, once you're debt-free, is there a rule as to what percentage of your income you should use on vacations?

Dear Carl,
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.

I'm not sure that there's a specific percentage involved on vacation spending. It definitely shouldn't damage your financial foundation, or put you back into debt once you've worked your way out. You don't touch your emergency fund to go on vacation, and you don't stop funding your retirement or saving money so the kids can go to college. You just save up, and pay cash!

In most cases, this kind of plan will almost force your vacation spending to be a reasonable percentage of your income.

I love vacations. I love researching, planning and counting down the days to our next vacation. We didn't always pay cash for our vacations. Oh no! I remember going to Hawaii in '92 and it was fully funded by our Credit Cards. It was a wonderful vacation but the devastation that was left behind was just the beginning.


Atlantic City Hotels said...

In the current Economic situation, planning vacations has taken a back stage.

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S. B. said...

"Should you skip vacations when you're getting out of debt?"

In my opinion: no. If you're working hard, you usually need a vacation. HOWEVER, if you're in debt, you should take a vacation that costs little or nothing. For example, you can see sights in your local town, visit friends or relatives, or go camping. Save the expensive vacations for later, after you're out of debt.

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Anonymous said...

Yes vacation are very important to refresh the body and mind.

Dany said...

i think that the coming season is good for the vacations.