Is It Ok to Travel While in Debt?

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I’ve been reading some things in the blogosphere lately that have me thinking about my previous post in which I share my plan to take an international trip next year once out of credit card debt, but while still in student loan debt.

Trent at The Simple Dollar blog recently posted  about the importance of celebrating achievements in a smart way, and not in a destructive way. Yes, as usual, he makes some good points. It is wise to be deliberate in one’s decision making and to celebrate achievements in ways that do not sabotage one’s goals.

There are a lot of opinions on whether or not travel while in debt is acceptable.  At the most basic level, there are two opposing camps.

Tianna Madison of the U.S. competes in her women's 4x100m relay heat during the London 2012 Olympic Games at the Olympic Stadium

On one side of the argument are those who are against someone taking a trip while in debt regardless of circumstance.  The motto: “Stay the course. No detours. No distractions. Go! Go! Go!”

Anti-Travel  (while in debt)

  • (1) It’s all about the money

Numbers tell the story. Every penny thrown at debt is a penny closer to freedom, in the form of lower principal and less interest paid. Creditors are entitled to every penny you make until they get their money back. Not taking a trip means getting out of debt sooner.

If I take this trip, it will delay my student loan payoff by two months. To this camp, it is better to pay off all the debt first, then take the trips. If I throw everything at the student loans (minus bare minimum 401k contributions), I could pay them off in 4-5 years. I would be 45 before I could travel. If I contribute to retirement more aggressively, it would take me 10 years to get out of student loan debt. I would be 50 and graying before I could travel. ‘Oh well’, say the anti-travel people, ‘Them’s the breaks. You shouldn’t have gotten into so much debt’.   Believe me, had I known better back in those years, I would not have!

  • (2) It’s all about discipline

You must deny yourselves your wants, until your debts are repaid. It is the responsible thing to do. Taking international trips while in debt means that you aren’t really committed to debt repayment. Such trips are wasteful indulgences that will lead to a cascade of financial belt loosening in the future.

These are good arguments.

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In the other camp however are those who support more flexibility in high and long term debt payoff.
Motto: “Pace yourself. Don’t miss the important stuff.”

 Pro-Travel  (while in debt)

  • (1) It’s all about balance

If you have deep debt and are facing several years of  repayment, 5, 10, 15+ years, these people say that you need to pace yourself.  You need to be aggressive about paying off debt, but no so consumed by it that you risk burnout.

If you are no longer quite so young, say over 35 or over 40, you need to look at your projected length of debt repayment and make sure that you don’t let life pass you by while you are in repayment mode.  That would be the equivalent of living in debtor’s prison. It is ok to pick one or two important experiences that you want to have in your life and make sure that there is room for them throughout your repayment plan.

About this trip:
This is an organized trip that I had an opportunity to go on about 4 years ago. Because of certain conflicts (long story), I chose not to go. I have seriously regretted that decision ever since. This is a destination I’ve been wanting to visit for the past 8+ years. I always told myself that if I ever had another chance to go, I would jump on it and not let time pass me by.  As it turns out, I may be eligible again to do this trip. Of course, it would be saved and paid for in advance with cash. NO ADDED DEBT.

  • (2) It’s all about priorities

Red Debted Stepchild has written a fun, clever and witty argument for why she shouldn’t take heat for spending money on her #1 want – dining out.  In short, she writes that as Americans, we already spend money on wants. Very few things are truly needs. Having our own house/apartment (vs. having roommates) is a want. Having a car, children, pets, are all wants, not needs. Having them are choices. They are not required for us to live our lives.

Some people don’t want those things (or are willing to give them up for a significant period of time) and instead choose to direct their money to other wants. Assuming that the writer is financially responsible overall (actively paying down debt), just because her prioritized wants are different than someone else’s, doesn’t give anyone the right to judge where she allocates every penny of her money. Her burrito analogy is gold.

Pay-off-your-debt

So What is the Verdict?

I am not entirely decided, although I am leaning towards going on the trip. Getting out of debt is a priority for me, but I can’t let it become my only reason for living. We can always recover lost money, but we can’t recover lost time.

Andrea @SoOverThis faced a somewhat similar dilemma. At the the time she felt shamed by the personal finance blogosphere into reconsidering her decision to take a business trip.  Unfortunately, I don’t know what she ultimately decided, but commenters encouraged her to go because she had a responsible plan.

I have several months to think things over before making any decisions.  In the meantime, I’m staying focused on making my payments and looking for more ways to lower my living expenses.

What do you think? Which camp are you in?

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

5 Reasons to be Thankful for Your Debt

I’ve been thinking about my financial situation a lot. And lest I come across as a Winnie Whiner, I started thinking about what I have to be thankful for. Out of every adversity there is growth and development. Here are five things that those of us in debt can be thankful for:

5. You Learn Patience. 

patience

If you don’t have the money, then you’d better have the time. When you are broke, you learn to adjust your life to other people’s schedules. You can’t go to work until the bus shows up at your stop. You can’t leave the party until the person who drove you there is ready to leave.

I have ‘The Hunger Games’ on queue at my local library. I didn’t get to see it while it was in theaters, obviously, because I’m in debt. I added it to my checkout queue a couple of weeks ago. Today, it’s in position 331 on the Hold list. I won’t be watching it for a while.

When you are back on your feet financially, you’ll have more options. But until then, patience, Grasshopper.

Just don’t wait too long…

waiting too long

4. You Can Forget About Keeping Up with the Joneses.

faux mansion

They won. Let them feel smugly superior. They’re probably broke too, or will be soon.

You are now free to plan to really be rich, instead of just looking rich.

Oh, and the Joneses usually have tacky taste so you’re better off not trying to be like them anyway.

3. You Learn What’s Really Important

priorities

When freed of all the pressure to compete, and purged of all of the plastic crap that we’ve been conditioned and socialized to stuff into our lives, you have the space to think about what you want your future to be like and feel like.

This is an opportunity that many never experience. Take advantage of it.

2.  You Learn the Harsh Truth about Personal Finance

prey

Remember the Animal Kingdom shows you watched as a child where you learned how animals get their food? Well hitting your financial rock bottom and living behind the bars of debtor’s prison do nothing if not teach you about the Financial Kingdom. There are predators and prey.

Those of us who were too slow or immature to learn the rules of the financial game were easy targets. Those who earn interest grow financially fat off of those of us who pay interest. Once you learn that cold simple truth and realize what years of interest payments have done to your financial future, you become angry and do something about it. You make a change. Those of us who are digging out of debt are choosing to be financial victors not victims.

And the number one reason to be thankful for being in debt.

1. No One Asks You for Money

crumpled dollar bill

Well, no one asks you for money except for homeless people. Little do they know that they are the rich ones in any interactions with us. They are poor and have no money, but they rarely have debt either. That’s something to aspire to.

So there you have it – five reasons to be thankful for your debt.  Remember that there are silver linings to every cloud.

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)