Going on a vacation..

[messengerhot]

Hello, guys! We are planning to go on a vacation next week and we are all excited. But, I'm worried about our budget. I don't want to sacrifice our savings but i don't want to disappoint my family either. My friend told me about getting a signature loan or personal loan. She said many company/firms offer a good deals like low rate interest and repayable up to 60 months. Is this something you might consider? Please tell me. Thanks!

[herbgeek]

No I would not consider borrowing money for a vacation. We have taken the vacations we could afford. When we were first starting out, it was camping trips with groups of friends where we all contributed food. We've also done hiking in National Parks for a vacation. That probably isn't going to help you since you said your vacation was next week, and likely already planned out. In that case, I'd look to where I could cut /some/ costs, like packing a cooler of drinks and snacks instead of fast food meals on the road, or if any attractions like a museum has a free day. If the accomodations where you'll be doesn't include breakfast, its easy to pick stuff up at a local grocery store and do it cheaper. Most hotels will have a mini frig if you ask, so you could pick up lunch stuff too, or you could pick up a disposable styrofoam cooler at your destination if you are flying somewhere.

[Williamsmith]

I suspect a few other first responders will react the same way I did when I read your inquiry. With an audible groan. But we have to assume your are very serious here. So I ask myself, would I ever finance a vacation with a personal loan? And the answer is a resounding, "Never!"

But why? Well I'm not against taking on debt. I have had three home mortgages, a home equity loan and countless auto loans. And I have even paid for appliances and a furnace/HVAC system with installment loans ....no interest if paid by a certain date.

The answer is, it all depends on your financial philosophy and where you draw the line on debt.

You are going to run into people who refuse to take a loan ever for anything. You will find the other end of the spectrum some who will pay for everything on credit including necessities such as food and transportation costs. And then there is everyone in between.

What are your principles? Mine are this.....don't take a loan on anything that you couldn't pay for with the liquidation of your assets or actual cash on hand. Never hang yourself out to dry like that. I use other people's money strategically when it benefits me, not them. I have had several no interest loans but I also could have paid for the items I borrowed for by accessing my savings. Instead, I preserved the option to have that easily available if a crisis hit.

But personal loans are going to cost you a high interest rate.....over 6% and that is horrible.

And when the vacation is over, you are paying for it with nothing concrete to look at. Are you going to have that sucker paid off before you want to take another trip? It can become a financial black hole for you.

So the answer for me is, vacation is a luxury that needs to be planned for, saved for and paid for before you leave the house.

[Ultralight]

I would say no. Don't debt yourself for a vacation.

Take it from a full-time loan drone/indentured servant -- don't take on more debt!

[sweetana3]

There is almost nothing worse than having to pay off a loan for a vacation after the vacation is over and you really want to plan the next one. Save for the vacation and then take it. It is kind of like getting a pay day loan when living paycheck to paycheck and never being able to catch up.

[Tammy]

Most of our vacations over the last 30 years were pay as you go situations. But there was one two week vacation in a beach condo in San Diego that we financed. We paid about 2/3 before the event, and then made payments over 6 months afterward.

I don't regret it. It was the last vacation before our kids left home. It still gives us great memories. We had been poor for so much of our kids early lives and finally we could almost afford a great vacation. So we did it and took a half a year to finish paying.

Sometimes there's exceptions to the strict stay out of debt advice.

[Teacher Terry]

Do you seriously want to take 5 years to pay back a vacation? Personal loans have high interest rates.

[Gardenarian]

What are your family's expectations? Is there a way you could have an affordable vacation that would make everybody happy?
It seems like a great opportunity to discuss the realities of your finances with your family.

And, no, I would not take out a loan.

[Simplemind]

Too late for my advice. I always pay for my vacations in advance so that I know what I am working with and I come home to no debt.

[razz]

Reality check again.
If you cannot afford a vacation now without borrowing, how will you afford to pay it back over 5 years and how will your family deal with the loss of dollars over the next 5 years for essentials?

As others have mentioned, when we lacked the dollars, we went camping, did local outings to places of interest, hiking. Look up geocaching as a family activity. Make each day a celebration of a different nationality. Look up local history and check it out. DH and I had a fun day exploring the first oil well in Oil Springs which is still operational today with the old technology from 1867.

[Gardnr]

If this is important to you and you can pay it off in 6months? I would support. Otherwise, I would not. I would do what I could afford. I would spend the next 12months saving the money needed for this "dream" vacation and do it next year while enjoying a low cost family vacation this time.

[messengerhot]

After reading your comments, I now feel guilty of thinking about getting a personal loan (https://www.calcoastcu.org/rates-personal-loan.htm) from my CU. They've got the lowest rates in our area so I thought I'd give it a try but then I read all your comments...

I mean, it's not like I'm borrowing money because of a medical emergency or some other reason that may be considered "valid". Now I realize that I didn't think about my decision a lot and it's a better idea to cut back on other expenses and spend a bit of our savings rather than going for a loan and paying 6% interest for 36 months.

Thanks for being honest on this guys, it made me realize how hubris it was to think it was even a good idea! LoL.

[Ultralight]

After reading your comments, I now feel guilty of thinking about getting a personal loan (https://www.calcoastcu.org/rates-personal-loan.htm) from my CU. They've got the lowest rates in our area so I thought I'd give it a try but then I read all your comments...

I mean, it's not like I'm borrowing money because of a medical emergency or some other reason that may be considered "valid". Now I realize that I didn't think about my decision a lot and it's a better idea to cut back on other expenses and spend a bit of our savings rather than going for a loan and paying 6% interest for 36 months.

Thanks for being honest on this guys, it made me realize how hubris it was to think it was even a good idea! LoL.

This response is just so good for so many reasons.

[Packratona!]

After reading your comments, I now feel guilty of thinking about getting a personal loan (https://www.calcoastcu.org/rates-personal-loan.htm) from my CU. They've got the lowest rates in our area so I thought I'd give it a try but then I read all your comments...

I mean, it's not like I'm borrowing money because of a medical emergency or some other reason that may be considered "valid". Now I realize that I didn't think about my decision a lot and it's a better idea to cut back on other expenses and spend a bit of our savings rather than going for a loan and paying 6% interest for 36 months.

Thanks for being honest on this guys, it made me realize how hubris it was to think it was even a good idea! LoL.

Hope we got to you in time! Spend some man hours researching vacation options that fit within your budget without borrowing. We took our kids on a week-long camping/fishing trip to the same place once a year while they were growing and they have such fond memories of it. Cooked everything at the campsite, very little expense other than the gas to get there about 3 hours away, and the $18 a night campsite. Although there is some initial expense for tents etc. Obviously you have to have a team that is ok with roughing it a little. But there are also other options that are more expensive, if you look for a deal they are affordable. Such as an actual cabin; we are camping at an award winning state park in July, a little under $30 a night. Paying for the airfair with airline miles, we are renting a car but shopped around for a great deal on that; about $170 for the week.