I need to save up for my vacation

[Pengwuino]

"I need to save up for my vacation"

I have just realized something. Using only anectodal evidence unfortunately, i was able to determine one thing about these so called humans that seemingly surround me. People will only save up money for a car or a vacation (at least Americans of course). Every single freaken time i hear someone say they are going to "save up", it's either for a damn vacation or a car in almost every case. And no, I am not talking about people who are financially stable; I'm talking about friends, family, and acquantences who are not at all financially stable, some even being downright poor. I'm being very specific here. I'm talking about financially unstable people who are taking trips that will cost them sometimes thousands of dollars to go on and people who are not satisfied with their financial lifestyles. I am being VERY specific here so no one give me any crap haha.

What is with this? Is this a psychological disorder or something? Can someone really say to themselves that $3000 for a weeks vacation (and no, i am NOT making up these kinds of figures) will be better for their life then putting that $3000 into their families basic necessities? I mean I know mathematically the idea is utter BS since $3000 towards a credit card balance is saving you more along the lines of $8000 in the end... but how can one psychologically validate such a decision? It's as if someone sits down and says "This family is in the gutter, we're broke, we have sky-high bills, the electricity keeps getting cut off, but the hell if I don't need a vacation". Do people not realize that the second they walk back into their house, their problems are stareing right back at them? And if you were disciplined enough to save up so much money... don't they realize that instead of taking a 1 week vacation from your miserable life, you could put a couple thousand bucks into making your life better!

And what about these people (especially young college-aged people) that go on vacations that cost sometimes $5000 just to see say, all of Europe for example. Is it worth it?? I mean many people live there entire lives off $5,000 a YEAR and these people are taking a 3 week vacation for the same amount. And this is in maybe the US or UK or other high per capita countries. $5,000 for most people on Earth is like winning the lotto! Is SEEING a bunch of different cities worth $5,000? If someone handed me $5,000, whatever it goes into must stick around for at least 5 years... or yield a minimum of 5% APY.

Damn I'm just on rant-mode today...

 

[TheStatutoryApe]

The majority of people are all about instant gratification. What makes them happy now is more important to them than what will make them happy later. Or in this case what makes them happy when they go on vacation is more important to them than what will make them happy a year or so down the line (or even in retirement if you want to go that far).

 

[dreamademon]

personally, I'm in that situation, but the only vacations I go on are to see my two nieces. I drive from MA to AL every year (one year I'll go on one's birthday and the next year I'll go on the other's birthday) For me, these two girls are the world. I've grown up with them, they are my best friends, and I would stay in debt forever just to see them once a year. Slightly different circumstances surrounding the reasoning behind my vacation and the vacations you are talking about, to me, my vacation makes a world of difference.

On a typical vacation to see them I drive for three days (stopping over in different cities after driving for about 8-10 hours cause it's dangerous to drive for longer than that) visit with them for about 7 days, then drive home for three days. The total cost of the vacation is generally in the 4k range including museums, food, hotels, taking my nieces shopping and to movies and such, and gas (The last one I went on I actually only spent 1500 cause I could only stay for a couple of days). I work hard the rest of the year, I can afford all of my bills even with the vacation, and I see no reason why I can't splurge once a year to see my family.

Not sure if this will give you any insight into the desire for a vacation or not, but it's at least one point of view on the question.

 

[Astronuc]

When I was young, my parents had little money, but they did save and we took modest vacations. From my parents, I learned deferred gratification. I earned a small allowance, until I obtained my first job at 13. I was happy or satisfied with what I had. I found then and still find enjoyment in simple things.

If one does not have excess of wealth or capital, then one should save and look for modest ways to spend a vacation. Living beyond one's means can lead to difficulties and suffering.

 

[hypatia]

I've saved to take some wonderful vacations...was it worth it? You betch ya!
Now I've also been on vacations that cost very little, and those times were just as sweet. A really good vacation keeps you away from everyday stress for at least 3 to 4 weeks, and can often change my perspective on the work stress I had befor hand.

 

[Pengwuino]

The only thing I am talking about here is people spending money on vacations relative to their current financial situation. If you're the type that is a-ok, ponders paying bills early, and has a savings rate that even the japanese would be fond of... then it's not the type of person I'm talking about here. I think for people with financial troubles, there's only so many times that you can sit down drowning in bills trying to figure out which credit card to pay this month and walk away happy because you remembered your vacation.

This is all pretty much a personal beef for me. I'm fairly sick of these idiot friends, acquantences, and politicians acting like our family owes anyone anything extra simply because we never buy anything extravagent and our last vacation in 3 years was a weekend trip to lake tahoe where my dad went wild and lost a whole $40.

 

[Gale]

well i spent a bit of money (500ish) to go to arizona over thxgiving, and that was totally worth it. i spent 1000ish when i went across the country over summer. pretty soon I'm hopefully spending a few grand to move to arizona, and I'm in mounds of school debt.. meh.

i think there's a lot to be said about enjoying life now, and not always saving and planning for a future that may never be. mind you, I'm one of the thriftiest people i know, and i save my money like crazy, but as soon as i have something worth spending it on, i do, and i don't hesitate. but some people start with good intentions and become misers. you have to enjoy life, even if it isn't the most practical thing to do. sure sometimes, right now, i get real stressed about money cause i don't have a dime, but its been worth it. and after i move, the second i have the money, I'm flying to spain! and i'll be poor all over again. after that, i'll save for my next trip or adventure or whatever i deem important and worth spending money on.

also, i personally would rather save up to travel than for material things. would a car really make me happy? would seeing a beautiful piece of the world? former: no, latter: why yes, yes it would. traveling broadens your horizons, and has a value that's greater than just monetary.

sides, the whole freaking country is in debt... I'm just one more person who is. I'm not going to let that slow me down. i take care of what i need to, and still manage to spend money on fun stuff. go me.

 

[Pengwuino]

Like I said, wait until your in mounds of debt and having your electricity turned and see how many times you can look back on your trips and walk away with a smile It's very easy to say somethings worth it when you don't know what you're comparing it to yet.

And that's the whole thing. Pissing away money when you're not financially stable is exactly the whole 'demand immediate gratification' thing TSA was talking about.

 

[Cyrus]

People are free to spend their money however they want to. I save every last dime I can. My plan is that the people who are not wise with their money, will loose their houses. Then I will go to the auctions and buy their house for lower prices, rent them out, and live on the interest. So, don't complain too much about them

 

[Pengwuino]

People are free to spend their money however they want to. I save every last dime I can. My plan is that the people who are not wise with their money, will loose their houses. Then I will go to the auctions and buy their house for lower prices, rent them out, and live on the interest. So, don't complain too much about them

See, and watch people complain to you!

 

[Cyrus]

Complain about what? If someone is too stupid piss away all their money, they deserve to have their houses repoed. And I promise you I am going to be there to buy their house and rent it out for a profit. That is my retirement plan. I am going to live off of the rent I collect from several houses I will own. It will provide me with an easy extra 5k a month. But this means I will have no vacations, no new cars, no expensive things for the next 15 years. But, after about 20 years, I will earn an easy 140K a year with a modest Engineers Salary with an additional 30-50k from the rent.

 

[Pengwuino]

Complain about what? If someone is too stupid piss away all their money, they deserve to have their houses repoed. And I promise you I am going to be there to buy their house and rent it out for a profit. That is my retirement plan. I am going to live off of the rent I collect from several houses I will own.

Don't you ever get a little annoyed when politicians pandering to the ignorant masses say people like you should be paying 50% taxes and stuff like that?

 

[Cyrus]

Well, people like me would not be the 50% group. That would be people who make over 150k a year (I believe). The people who make millions a year, should be taxed more, but not a whole lot more. The rich are not a bank for the government. At the same time its not fair to heavily tax the poor. The solution is not to have such a big and inefficient government.

As the saying goes, It takes money to make money.

 

[Gale]

bah! and if you die in 10 years? i mean, i like to plan and all, but life is what happens while you're waiting around for your plans to bear fruit. its dumb to save everything for something so far off. what if you hit the lottery? then all the years you saved were silly. live in the here and now, and do your best not to screw things up for later!

 

[Pengwuino]

and do your best not to screw things up for later!

Which is completely against what you have said all along! What if you die in 90 years and have to live those years in poverty and have difficulties getting through life.

 

[Cyrus]

its dumb to save everything for something so far off.

Saving for your future is the best thing you can do Gale.

what if you hit the lottery?

I don't waste my money on things like that. (The stock market is another word for Lotto by the way)

live in the here and now, and do your best not to screw things up for later!

Thats not how I live my life. I live my life so that I know there will be a secure tomorrow.

If I die in 10 years, then my wife will and kids will get all the money and not be left with nothing. I would not want to die and have my wife having to work two jobs just to put food on the table for my starving kids. Not saving your money or investing is a sure fire way to screw up for tomorrow, today.

I want to have a nice nest egg of about $2-mil by the time I retire.

 

[Pengwuino]

I don't waste my money on things like that. (The stock market is another word for Lotto by the way)

Actually its the exact opposite. Every piece of information you need to do well in the stock market consistently is out there. The only reason people think its a gamble is because no one wants to do the research required to make good investments. I mean i can literally go out into the stock market and make 4% minimum yield absolutely guaranteed. The only reason people don't take this guarantee is because 4% kinda sucks relative to what you could make with the right growth stock or what not.

 

[Cyrus]

Stock market = Crap

Too risky, I would not put a penny of my money in it. I do investment realestate. I will buy property.

 

[Pengwuino]

Stock market = Crap

Too risky, I would not put a penny of my money in it. I do investment realestate. I will buy property.

Well its not fair to compare it to real estate :rofl: :rofl: :rofl: But for people willing to do the research, it's a very nice way to make a substantial amount of money.

Oh and real estate is only lucrative if you have the money for it. $5000 doesn't go far in the housing market but it can in the stock market. If i had $100,000, you bet id be buying up property left and right however.

 

[Gale]

what if there is no tomorrow! you're gambling just by saving! you're taking a risk by assuming there will be a tomorrow. you don't know there will be. any day could be the last. and no you silly penguin, i haven't been saying "go crazy and live like there's no tomorrow" but just what if? don't live like there definately will be. i don't think I'm in any serious risk by having some school debt. i just have to get my degree and a good job and all that, and eventually pay it off.

bah, you guys are so boring, you're making want to spend the money I've been saving for textbooks on some candy and a dirty movie!

 

[chroot]

This conversation sounds like a bunch of kindergarteners arguing over brain surgery techniques. Let's say this careful to ourselves: Extremism is bad.

cyrus, I've known people like you, who save every dime they make, and salivate over their bank balances. One of my previous coworkers would literally call me up just to tell me about a 20-cent sale on chicken broth across town. Considering the limit of 12 cans and the gas he'd spend by driving across town, he'd calculated a net savings of say, $1.50. And he'd pass this information on to me as if he were doing me an enormous favor. This man recently bought a $2 million house in silicon valley, at age 63, and tells everyone (whether they want to hear it or not) about how he and his wife only ate out once a month, only went to a movie once every two months, and so. He practically preached his penny-pinching techniques.

This same man also essentially chose to work himself to death. He stayed at work until 2, 3, 4 in the morning regularly, not because our boss really gave him that much work, but because he would convince himself that he had to do everything he possibly could every single day. He was utterly miserable. He and his wife had essentially no life together, he had no social life, and spent the half the day he wasn't beaming about his house grousing about how much he hated his job.

Personally, I'd rather enjoy the next forty years of my life, within reason, and retire with a $1.2 million dollar house instead. I certainly won't need six bedrooms and two foyers when I'm 72 years old, anyway.

On the other extreme, people who are suffering with enormous credit card debt, yet find an excuse to spend $60 a weekend on booze in a bar, or rationalize spending $3k on a vacation, have problems, too.

I manage my finances in moderation. I have automatic deductions for things like my 401(k), my employee stock purchase plan, and so on. I don't have to pay taxes on this form of saving, my company matches it dollar-for-dollar, it barely affects my take-home pay at all, and I can even use it for collateral when buying a home. I live richly, but my "bare minimum" savings is always right on target. If I continue to make the maximum yearly contribution to my 401(k), I will retire with several million dollars even if I spend every single dollar I take home until I'm 62.5 years old. I make informed decisions about what I purchase, I budget for entertainment, and I never have any problems paying for my bills. I even manage to put some away in my savings account every month.

I'd like you all to keep in mind that real estate is generally one of the "last" kinds of investments you'll make, since it requires the largest capital expenditure. If you purchase a $500,000 house at 6% interest over 30 years, you will eventually have paid more than $500,000 in interest. That's right, folks, unless your house doubles in value in 30 years, you're actually losing money on your investment. Sometimes a house's value can double in a year, but such houses are generally already so expensive that you'd need an enormous bankroll to afford them anyway. Most houses do not double in value even over thirty years. If they did, the banks would keep them, rather than selling them to you.

So -- my savings advice is to skim a bit off the top each month, and invest in a 401(k), an IRA, or some other tax-deferred savings plan. If you just put your money in savings account, you're actually losing money over time, since inflation always beats the prime interest rate. If you have extra money at the end of each month, invest it in some other fashion. Once you've met your savings goals, spend the rest on anything else you like -- vacations included.

- Warren

 

[chroot]

i don't think I'm in any serious risk by having some school debt.

School debt is the best possible kind of debt you can ever have. It accrues no interest while you're in school, and only modest interest once you're out. You can pay it off as slowly as you want, for the rest of your life if necessary. You aren't even required to make payments when you're unemployed. Most creditors don't even consider student loans when considering your debt load, so even a large student loan principal will barely affect your qualifications for other purchases. You should literally take every single dollar that the government is willing to give you in loans, and squirrel it away. You can easily invest that money, e.g. as a down-payment for a house, and exceed the interest rate several times over. Student-loan money is as close to a free lunch as it gets.

- Warren

 

[Pengwuino]

I don't think my idea of saving money and staying out of credit card debt is that extreme of an idea...

 

[chroot]

I wasn't talking about you, Pengwuino, I was talking about cyrus' ranting. I agree with you to a large extent.

In my opinion, there are really only two "traps" one must avoid getting caught in. The first is credit card debt, which is the most insidious kind of debt imaginable. You get nothing back for your interest, you pay more interest than virtually any other kind of legal loan, the companies are absolutely rabid with their collections, the fees and additional charges are practically extortion, and a high credit-card balance hurts your credit score more than any other factor.

In my opinion, expensive cars are the second worst use of money imaginable. I should know -- I own a sports car. It's almost paid off, but after a couple of years of ownership, I sincerely wish I had never bought it. It costs me a small fortune every month in payment, and I have squandered an additional $10,000 in interest over the 60 month term of the loan. Cars depreciate faster than any other physical asset on the planet, and are usually completely worthless 2-3 years after you crawl out of their debt trap. It's convenient for the auto industry that most people willingly jump right back into the trap.

- Warren

 

[Pengwuino]

Most insidious kind of debt? PAYDAY LOANS! Aren't those things like 250% interest? I don't really get how they work. Do you just give them a post-dated check and they give you however much money 250% interest over that period would gather? As in like.. let's say there's a 365% interest (for simplicity sakes) and you have "payday" in 7 days and you want $100. Do you give them a check for $107?

 

[chroot]

Most insidious kind of debt? PAYDAY LOANS! Aren't those things like 250% interest? I don't really get how they work. Do you just give them a post-dated check and they give you however much money 250% interest over that period would gather? As in like.. let's say there's a 365% interest (for simplicity sakes) and you have "payday" in 7 days and you want $100. Do you give them a check for $107?

Ah, true, the payday loan is a much higher APR than a credit card. Of course, you have to pay off the payday loan in a week, so the effect is not nearly as great as for the majority of Americans who let credit card balances ride month after month after month...

- Warren

 

[Moonbear]

There's a balance that one needs to find in life. If you're seriously drowning in bills, vacation is not the priority, and I agree with you, Pengwuino, that whatever you can save and scrape together should be spent on recovering from that debt so you can get on to a normal life. Of course, I find that most people who wind up in that much debt have been squandering money away for a long time on frivolous things. Sure, you have the occassional situation where someone got hit with an unexpected car repair or home repair or medical bill that forced them into debt, but most times it's because they run around buying the "must-have" shoes or designer clothing, or big-screen TV, and so on. In that case, they've certainly already indulged themselves, so they need to just cut back and pay the bills before indulging more.

On the other hand, once you're in a financially secure situation, where you are able to pay your bills and have a little bit in savings to cover the unexpected bills, to squirrel away EVERY dime for a rainy day while denying yourself every pleasure in life is no better. My father did that...we did go on a very modest vacation each year, but it was usually driving somewhere, staying in a cheap motel room, and doing all the things that don't require paying admission, or a very nominal admission. When my parents reached their 24th wedding anniversary without having ever gone on a really nice vacation, just the two of them, they decided they were going to plan to go on the cruise they always dreamt of going on for their 25th anniversary. They had talked about going on a cruise forever, but always decided it was just too expensive, it could wait another year, they'd do it another time, they should save up a little more first, and so on. My father died a few months later having never gone on that cruise.

You can't be totally reckless and not plan for your future, but you also can't be guaranteed that tomorrow will come, so you have to enjoy life a little bit as it comes.

 

[Pengwuino]

Ah, true, the payday loan is a much higher APR than a credit card. Of course, you have to pay off the payday loan in a week, so the effect is not nearly as great as for the majority of Americans who let credit card balances ride month after month after month...

- Warren

Actually my mother knows people who in fact, live off payday loans! It pretty much effectively makes it a 250% credit card because she does it every week.

 

[chroot]

Actually my mother knows people who in fact, live off payday loans! It pretty much effectively makes it a 250% credit card because she does it every week.

Well, that's rather scary. It seems like it would only take a person one or two weeks of skimping, to get just slightly ahead, so such loans are no longer necessary. That doesn't seem very difficult.

- Warren

 

[Pengwuino]

Well, that's rather scary. It seems like it would only take a person one or two weeks of skimping, to get just slightly ahead, so such loans are no longer necessary. That doesn't seem very difficult.

- Warren

I think what happens is that she pisses her money away once she gets her paycheck and then boom, you need to actually live for 2 more weeks and she needs the loan again. You'd think something like that is impossible too! The ramifications of doing it are unlike most other things that take a long time to realize. You realize you just screwed yourself over on a bi-weekly basis with this though.

 

[Moonbear]

I think what happens is that she pisses her money away once she gets her paycheck and then boom, you need to actually live for 2 more weeks and she needs the loan again. You'd think something like that is impossible too! The ramifications of doing it are unlike most other things that take a long time to realize. You realize you just screwed yourself over on a bi-weekly basis with this though.

Amazing, isn't it? The last place I worked paid faculty on a monthly basis. It didn't matter to me, and, in a way, I liked it better because I could just sit down and pay the bills once a month and not worry about paying half now and half in two weeks. But, my sister was nearly incredulous when I shared this at some point. She couldn't imagine how I could live with getting one paycheck a month. It's like she could only budget one week at a time on a weekly paycheck.

Then again, for some reason, the university had also decided to stop paying the grad students monthly, and instead paid them their entire stipend in one lump sum at the beginning of the year (I think it was year, it might have just been a semester basis). Thankfully, someone decided to offer them a financial planning type seminar to make sure they budgeted appropriately to make it through to the end of the year. But, boy, did I wish someone did that when I was in grad school! I'd have popped half of it straight into a CD to earn some real interest for 6 months until I needed it, kept a month's worth in a checking account, and put the rest into some other savings account (savings accounts didn't get the pathetic interest then that they do now). I'd have made some nice interest off it before needing to spend it. Actually, I probably could have saved more, because without having to spend it just a little at a time, I could have stocked up on essentials in bulk at a discount rather than having to pay full price whenever I ran out.

 

[TheStatutoryApe]

I think what happens is that she pisses her money away once she gets her paycheck and then boom, you need to actually live for 2 more weeks and she needs the loan again. You'd think something like that is impossible too! The ramifications of doing it are unlike most other things that take a long time to realize. You realize you just screwed yourself over on a bi-weekly basis with this though.

I had a co-worker who did that. Just about every other week he was on an online payday loan site while he was here at work or on the phone with one of those places. At the same time he had a brand new SUV, a tricked out cellphone, a walkman type TV, and a portable DVD player. And that's just what I saw him bringing into work, I have no idea how much else he may have had that he probably didn't really need.

 

[Kazza_765]

I think what happens is that she pisses her money away once she gets her paycheck and then boom, you need to actually live for 2 more weeks and she needs the loan again. You'd think something like that is impossible too! The ramifications of doing it are unlike most other things that take a long time to realize. You realize you just screwed yourself over on a bi-weekly basis with this though.

Well, that's me exactly. But then, I'm a student, my average income is only a fraction above the poverty line, and I have almost zero responsibilities. I pay the rent and the bills (usually on time), because the government gives me enough money to cover that, with almost enough left over to buy food as well. I'll go out and spend $80 for a big night on the town, and then live on rice and soy sauce for the next week. But hell, its fun, and I love it, and right now I wouldn't have life any other way.

 

[Kazza_765]

I had a co-worker who did that. Just about every other week he was on an online payday loan site while he was here at work or on the phone with one of those places. At the same time he had a brand new SUV, a tricked out cellphone, a walkman type TV, and a portable DVD player. And that's just what I saw him bringing into work, I have no idea how much else he may have had that he probably didn't really need.

Lol. I ride a bike, have a 4 year old cellphone, an old school discman I got for $20 dollars and some tokens from the back of cereal packets, and if I want to watch a DVD i got to do it in my computer.

 

[JasonRox]

I totally agree with Pengwuino.

I've actually had the same thoughts about vacations recently too, since my mother just got back from one.

I agree with TSA that it's all about instant gratification. People always say "I deserve this... or that...", but I don't think anyone deserves anything, with regards to things that are outrageous.

At the same time, I don't agree with the views of Cyrus of being almighty of saving every dime or nickle or even COUPON! I was like this before, saving every penny and working hard and all. It affected my life to the extent that I didn't like it. It wasn't a "suck it up" it's life kind of thing. I was working too many hours for a student, just so I can save a nickel. I have closed so many doors to opportunities that I could have taken because I wanted to save a nickel. This in the end impacted my life, just like those who spend too much. In the end, I learned my lesson. I spend in moderation, not too much nor too little.

We can all learn from Aristotle.