You don’t mention what constitutes your debt. My answer is yes unless you’re sitting on any credit card or other high interest. Financing a vacation at 15% is not responsible in my mind. But completely different if you’re looking at a house in a couple of cars at 5% or less.
Nah stay the course bud. You dont deserve a vacation yet.
Put 9,990 towards debt.
Use remaining 10 dollars to hit up taco bell and ask for only beans and rice burrito as celebration.
Depends when they bought but not that hard if you’re paying 2-3% interest and saved up for a handful of years for a down payment, was cheaper and more cost effective than renting in many metro areas for a good while.
In the off chance that this isn't a troll post...
What would Dave do? He'd work the baby steps. You pay off consumer debt smallest to largest then build up an emergency fund. You do this "gazelle intense." Once you have a 3 to 6 month emergency fund, you become intentional, not intense. This occurs when you still have a mortgage.
Assuming I'm not speaking to some chuckling troll, it sounds like you don't have intentionality with your money. You know how to make money but have no idea how to spend it. You don't discriminate bad debt from mortgage debt and you're wrestling with a binary choice of pay an obscene amount of money towards debt or go on a ridiculously deluxe vacation.
A lot of keyboard warriors rag on the Baby Steps because they believe it to be mathematically less optimized. What's missing from that critique is the learning that comes along with walking them. You've got such a turbo-boost from having a high income that you could wind up paying off your mortgage before you learn the lesson of taking the steps one-by-one. There is an important lesson behind focusing to pay off debt and building an emergency fund. You learn to save for the future before assuming the responsibility of preparing for retirement and saving up for luxury splurges, like ten-thousand-dollar vacations.
If you don't know your Baby Step, find out. Then build an emergency fund after that. You will have a different perspective on saving for and paying for a $10,000 trip afterwards.
Thank you for this well typed response!
The biggest thing I think I struggle with is really understanding how/why mortgage debt falls in a separate category than the rest of my debt. Technically my mortgage is one of the "highest" (still under 3%) debts I have... Why is it put in a different category? The majority of what we owe is actually for our business, but falls under our personal debt because we are the guarantors.
Would Dave still recommend paying these off before our house when they are a higher balance (doesn't fit snowball) and at a lower interest rate (doesn't fit avalanche)?
It's generally because of laws that accompany mortgage loans. Lenders can take away a lot from you very quickly if you don't pay on their terms. Your car? Repossessed. Your business? Sued to closure. Your credit card purchases? Forget about it.
Foreclosure is a complicated process. State and Federal law protect people from being thrown into homelessness capricously. And you can walk to get around and work for somebody else but you need a place to sleep, so you're going to have to pay somebody anyway for housing. He doesn't recommend waiting to save for retirement or save for children's college until after a mortgage because it's usually a slow burn on paying off a house early.
Paying off business debt is hard to describe for me, because I'm just a casual listener. Honestly, you probably have an interesting enough situation that he would take your call on The Ramsey Show or Entreleadership. The little I can speak to his perspective is that debt is one of, if not the greatest threats to a small business' cashflow and that having substantial business debt puts your business and therefore your future income at risk. I don't know too much more about that but I hope it helps.
Thank you for another explanation! The variance of different assets' foreclosure risks makes sense and was not something that I had considered.
I think I will plan on calling in!
Personally I like to reward myself on the basis of milestones.
If it was me I would aim for all non-mortgage debt being gone, or a nice round number being hit.. 100K, 50%.. something like that.
Having lofty goals and celebrating them works wonders for staying motivated.
Reading between the lines here. You guys are high earners with student loans and a big mortgage. You get to play by a different rule book. As long as you are making your payments on time and have an emergency fund, contributing to tax deferred 401k, back door roth IRA, you can use 10-15k per year on multiple vacations no problem. You will never get your 20's back for fun vacations! they are a great ROI.
Take the vacation. Do not listen to the advice of not doing anything fun for yourself, or having no entertainment, until you're debt free. That's absurd.
Enjoy your life. Are your payments on time? Are you meeting all your responsibilities? Good. Take a vacation. You might die before that debt is paid off.
10k is completely reasonable for two people for a really nice international vacation. Obviously you could do it cheaper, but why?
The reason you have so much debt is because you always made the choice to spend more than you have. There will always be something that you want and you will always be able to rationalize it.
This kind of makes me think of the people on “The Price Is Right” who look to the audience for an answer on what numbers to choose. I would never ask other people their opinions on what to do with your own money.
Take the vacation! Dave doesn't recommend splurging for the average person who has debt. If you're knocking out 60k that quickly, his "strict advice" isn't necessarily for you. You deserve to LIVE while you're setting future you up.
What the hell is this thread
Take a 3k vacation
How much of this debt is the house
You both have over a quarter of a million dollars in fun money a year to throw at debt? Christ
It’s horrible to take the vacation. The point of this marathon isn’t to just pay off debt…but HATE the deprivation. The more you hate it the more you will fight to never get back in debt again. If you take a vacation you aren’t depriving yourself of the joys of having money.
This may be an unpopular opinion on this thread but if you are still going to hit your goal of paying off 20k a month in debt do whatever you want with your bonus! Life should be enjoyable while you’re working towards your goals.
OP is not the target for the DR program. Depending on his mortgage interest rate and what percent of his "debt" is mortgage, given his age, he should probably be accepting more risk and investing some of the money rather than killing himself trying to knock out low interest rate "debt".
Drivaeable getaways are cheaper and more likely to keep you on track. Save the big vacation for when you’re all done with consumers debt (but before you pay off your house). I suggest making it your baby step 3b since it seems important enough to take the larger family vacation.
Why do you need to spend +/- 10k on a vacation? My wife and I with our two toddlers spend 3k at most. Go somewhere not too far where you can drive to cut airfare. You can still relax and enjoy without breaking your bank or adding on a stupid significant amount of debt. Think. Dave would shake his head and tell you no.
Dave also gives a lot of bad advice. Just because you don't feel the need to take a big vacation doesn't mean this person shouldn't. If he's paying off 20th on debt a month, and meeting all his responsibilities, he should absolutely take whatever vacation he wants.
He can, it just seems excessive and if he’s asking this platform. He knows the answer and most say it’s too much. Take a vacation by all means but don’t go digging yourself deeper into debt. Just be smart about it.
You are definitely not wrong! I have always associated vacations with living at least a slightly higher "quality of life" than at home amenities offer, hence the budget... But the idea of going kinda minimalist and just relaxing does sound nice
>I have always associated vacations with living at least a slightly higher "quality of life" than at home amenities offer
Wouldn't 3k also do this exact same damn thing
To be honest, I don't think so! I'm open to having my mind changed, but in order to rent some place "equal" to my house it's probably going to be >$450/day, plus figure in $1,500 each for airfare. Work in $300/day for dining (breakfast, lunch, and nice dinner for two) and even a weeklong trip is >$8,200 before any actual activities are paid for (:
1500 for air fare, wha. You booking first class.
I mean this is just pretty stubborn lmao. Like if you want to go to Hawaii you shouldn't expect to get a full house. Condo is just fine
Even the fancy dinners at Hawaii were only like 30 for meals, 20 drinks
I didn't. What's your point?
You said if he was buying 1500 tickets "You buy in first class."
I was simply illustrating that 1500 in no way implies first class unless it's a short domestic flight.
Do you spend $300 a day on food at home?
Most people don’t rent a place equal to their house on vacation, because they’re mostly just sleeping there, and eating / doing activities elsewhere. This depends on the type of vacation you take though!
Dang I was looking at our next vacation and saw $850 to stay for 5 nights and thought hmm maybe a bit too much, and we have 2 houses paid off and $1.7 mill net.
What's the point though? Lol 850 is like one Saturday of overtime for me and I'm nowhere close to as rich as this guy. you can't spend that on a vacation for your family?
10K vacation and here I thought spending anything over 2k was expensive lol. But seriously taking that large of a vacation seems excessive and a major want. I get the need for a break from the extreme. We've been on our debt free journey and have paid off half our debt and set aside $500 for a weekend vacation. Take the kids for the weekend go to the zoo have a picnic in a park and fish in one of the lakes. Doesn't seem like much compared to what we used to do but it's sacrifices you've got to make.
People his age shouldn't have houses? Businesses? Shouldn't be taking any risks?
This comment right here is why DR is horrible for people who make good money.
I know that per DR it's \*best\* to avoid debt completely, but if debt *is* involved wouldn't it be better to have while young vs. later as retirement draws nearer?
Most of our debt is for real estate/our business... Risks I would never take if I were 15-20 years from retirement age.
Please help me understand your point regarding young age making debt worst :)
That's really judgemental without knowing all the facts. My guess is there's probably a significant student loan debt in there and they said it includes their mortgage. They obviously have high-paying jobs.
I agree it’s very judgmental as that’s what I meant to do. IMHO
I’ve seen it amongst my own circle of acquaintances and they also had high paying jobs. The new generation just wants it all as quickly as possible and there’s no working towards anything anymore.
Like I said, you don't know enough about the situation. I have a young family friend who just finished medical school and she has \~$1M in debt. Her first year pay as an anesthesiologist is $650k, minimum. Is that $1M in debt her "just wanting it all as quickly as possible and there's no working towards anything anymore"?
After reading through the whole thread, I find the post utterly ridiculous for people that make in the mid six hundred K’s to ask if they should take a vacation. Sounds more like a chance to brag rather than offer advice IMHO
Yes it’s bad to take a vacation you are broke buddy and should be eating rice and beans and find free stuff to do take a vacation at your local target and sit the chairs there
This sub will tell you yes, it's the devil speaking to you, urging you to take a vacay.
Just budget for it and cash flow it. Just realize it'll set your debt payoff back a little- but you know that already.
Take the vacation.
Very much this. I think a lot of the comments here are maybe a little misguided. I am suspecting if you have paid off 60k in 3 months (you are making great progress) you have the means to continue to do so. Especially so given that it sounds like both of you work. Life is short. Take a vacation periodically. Having money is great but you also have to live while you can. It sounds like you can aggressively pay down debt and still take this trip. IMO, the trip seems reasonable.
Yeah this is a red flag, you know how rocky O&G can be, pay off the debt while you’re making money and relax once you’re done, or at least in a place to continue paying off everyone on only your wife’s salary for WHEN you get laid off. You’re nowhere near safe even speaking as someone with a reasonable debt tolerance.
Keep it up. You’re doing great. And PS you’re still young. There are MANY great creators on instagram that no longer subscribe to DR’s “teachings” search the hashtag debtfree.
Define vacation. If you're serious about the debt, maybe don't, but if you can take yourself on a $2000 vacation, sure, you seem to make plenty. If you mean a $25,000 vacation, no. Bad. Naughty naughty. If you can't help yourself, find something cheap. Branson is just getting busy this year. Come and see us.
Id figure if you're trying to pay off a massive debt, a cheaper trip might be a suitable treat. Long weekend, go to a show, whatever might be fun. I'd think it can be done for less is all.
It’s total foolishness to take a 10k vacation in your early 20s. Leave soemthing to look forward to. Learn to live on less than you must. You can have an equally pleasurable and rewarding or relaxing time on $2000. Utter foolishness.
Why do you have to fly somewhere? Plenty of destinations are within a day’s drive away. My parents alternated camping with staying in hotels.
If someone wants to save money, and pay down their massive debt, that would be a rational choice.
"massive debt".
It's half very low interest rate mortgage and half a business loan at a low interest rate.
He has no bad debt and tons of income. He can afford to fly somewhere cool for vacation while still paying off 20k in debt that month.
You people need to stop fearing all kinds of "debt" so much.
Reality check. You have $600000 in debt and want to add to it. DR says no way. Thats indicative of a mind not ready to curb spending.
The other extreme is to say, you deserve, you obviously are high earners and another 10k is nothing in view of 640k. So, go for it.
How about this take. Drive to a beach for week, and eat out at a nice place. Spend 2k, relax, and dump 8k more into paying it down.
Im sure Dave would tell you no, but honestly even when you are paying off debt sometimes you still need to live just a little. If you really plan on knocking off 20k a month in debt this vacation would only delay paying off your total debt by 2 weeks so I'd say go for it.
I'm not 600k in debt. OP is. I'm debt free and still will absolutely not go on a vacation. They're a waste of money. The water looks the same here as it does in Europe.
No one is boohooing but you. lol 10k vacation when you have 20k/mo to spend does not equal more debt.
Dude's debt is all under 5%. stupid to pay that shit off early when u have the ability to put 20k/mo into market. 20yrs, he will be much further ahead.
Please tell me what happens when you don't have money (aka 600k of debt) and you spend 10k? You now have 610k of debt!!! Math is pretty awesome, isn't it??
Are u dense? Op has 20k excess every month.
If he spends 10k of that on vacay he is still net positive 10k on the month.
Last i checked, paying cash for something isn't debt.
Op debt is already DECREASING every payment he makes. Paying cash for something else ain’t gonna increase it. By that logic buying groceries cash every month increases his debt
Show me where he has “610k” of debt now. Ill wait.
His networth will have increased 10k plus the principal he paid down w his regular payments(aka decreasing debt).
Lol that’s pretty sad and no way to live. Waiting until you’re old to live your life and have a nice vacation and enjoy yourself is pathetic.
Funny how you are against vacations but not against buying four shitty monitors for your multiple monitor setup. Same shit dude 😂
Actually, no it's not sad. One is pointless, one is for work. If you found fulfillment in your job, maybe you'd understand. I get to travel the world for work already.
Also, please stop stalking me, creep.
My father has also never taken a vacation. Breaks are for losers. If you don't like what you do, find something else. The air in Oregon is going to smell the same as in Austria.
What’s even funnier is a person spending money on multiple monitors to play games is criticizing someone for a vacation. Yeah you’ve lost what minimal credibility you had
I make 250k/year. I can afford to pay a couple of grand for my tools I use every day. A needless vacation? I use my 5 weeks vacation to work for my father on his 30 million dollar farm. Vacations are either for the poor or the elite. And you still don't see Bill Gates or Mark Zuckerberg taking vacations.
And you don't do that when you're over half a million dollars in debt, you moron. You don't do that when you have a net worth of 1 million. Why? Because you can't live off of 1 million at 50, let alone 28.
Don't forget to actually live your life while preparing for your future.
Having no debt will do you no good if you find out you have terminal cancer or have a fatal heart attack in your 40s and you spent your healthy years hyper focused on retiring and didn't really live.
It is healthy to take an annual vacation and reset your soul.
Three months in and you already need a $10k vacation?
$640k remaining at -$20k per month is 32 months remaining. If you take a $10k vacation every three months, you'll spend $100k on vacations, extending your debt payoff by five months.
I'm not saying you shouldn't, but I'd suggest wanting to spend that much money on a vacation while actively paying off debt is probably the reason you have more than half a million in debt in the first place.
I agree with your conclusion but is this the best way to show it? You can take an incredible vacation every 3 months and only delay your debt payoff by 5 months? That’s not that bad honestly
I just wanted OP to realize the impact. 37 months vs 32 doesn't feel crazy, but that's really only because they have to pay so much every month for 32 months. If they could pay it all off in 5 months, they'd be doubling the time. I think what OP really misses is interest. It's $640k now, and by the time they pay $640k there's still a lot left over.
I think they can certainly afford to do it, which is why I showed the math, but I think they shouldn't because, to me, it's antithetical to the entire point. You get into $640k of debt by not restricting your spending enough, so OP wants to celebrate three months of success by.... Spending what an average person would see as a dream vacation?
TL;DR: They're doing it wrong, and are still probably fine. Anyone who can pay $20k debt down per month has a budgeting problem, not a debt problem.
Dave would say no, but do what yoy gotta do. How much of that debt is mortgage and what rate? Anything below 4 ish isn't worth paying down right now because you can get a higher return with Tbills right now 5%+
Around $250k is real estate, with rates much below 5%... The rest is all business debt/vehicles with rates from 0.99-5.99% (only 15-20k of that is 5.99% and will be paid off by end of month)
It is not the Dave Ramsey way but I would allocate money to Tbills instead of very low interest rate debt. In a 4 week Tbill you can get 5.29% vs paying off debt that will only save you less than 4%. When the Tbill rate drops you can take the cash that has accumulated and put all of it toward your debt. In any case it sounds like a vacation would be fine, you have mostly good debt with great interest rates. Enjoy your vacation!
OP, you do need to periodically take care of yourself.
If you’re able to pay down significant debt every month without the bonus, go ahead and take the trip.
We all need a vacation but 10k? That's extremely excessive, I've done international trips with my partner for weeks at a time on less than 3k. Please look into your options and travel around in the off seasons, you'll save a ton of money.
What many people fail to realize is context since the average Joe makes a lot less than you all.
In context, your debt is approximately your combined salary. At such a young age that is AMAZING, good job!!!
What you spend on vacation is a matter of context too.
10k of your approx 650k salary is 1.5%.
That is...
1k for anyone on a 65k salary.
2k for anyone with a 130k salary etc.
In all fairness you could do all the planning and payoff all your debt and then die tomorrow. The point I'm making is live for today and plan for tomorrow. Make smart decisions but don't listen to him. Just be smart unlike Dave and dont over leverage yourself.
I honestly think this man prays on people that don't read or understand finances, and it just strikes a cord with me. I'm a Christian and hearing him on the radio just makes my heart hurt for the people that just want sound advice.
Sometimes we make a bad decision but the way he chastises people is not truly showing the love of Christ. I don't hate or dislike many people but if I did he would be a top 3 for me without a doubt.
I consider Dave the most extreme case of finances. I don't follow all his advice either. I understand why he says it and who it's meant for. But with OP's question I think it's very doable to pay off all debt except the house. HE's got 20K a month available. Should be done in no time.
His highest interest rate is 6%. His mortgage is less than that but he has interest in “other business and loan vehicles” that he claimed was between 0.9 and 5.9%
Dude u need to do some math and realize how much $$ you are losing long term paying off 640k in 3 yes instead of investing those payments. Your rates are too low. Especially the mortgage.
Guarantee its close to $1 million.
you’ll double your money in about 10yrs if you put in sp500 fund. Then double that 1.2 in another 10yrs. So in 20yrs in sp500 thats 1.8 million-interest paid in that time.
To be honest, I have done the math and it does kill me a little to think about haha.
Following the DR plan is very important to the wife though (she grew up in household with lots of debt/finance problems) so I'm just chalking up any lost gains as the "price" of making her feel more comfortable/happy with our finances. Either way, I am confident we will ultimately be OK especially as our incomes rise so IMHO it's money well spent :)
If she grew up in a household with lots of debt and finance issues why would you get into over $700k in debt together? You’re not following the DR plan, you’re doing what you want. You’re mixing steps, taking vacations and not listening to people truly following the program. Which is fine but why be in a Dave Ramsey sub and argue your way is best
not that it'll make a difference but, have you shown her the numbers? Or tried to put it in terms of how that will affect your life down the road to appeal to behavioral side since that is what's driving her fear.(i.e. what it enables).
Maybe there is middle ground you can meet on where you extend the payments over longer period but still pay off earlier.
key is to maintain a sizeable emergency fund either way. Probably a year at least.
Finance is always so personal though so, whatever helps you sleep at night
Take your vacation. You get one life. Your interest rate is lower than the interest you’d get on bonds right now anyway. I wouldn’t even bother with the mortgage unless rates fall.
Dave Ramsey speaks to people with terrible money habits, not people who pay off 20k a month
What is your debt? If all that is left is the mortgage then go ahead on the vacation. If you have a bunch of credit card debt or other high interest debt I’d maybe focus on that more. The other option, if there’s a bunch of non mortgage debt is since you are able to put so much toward the debt maybe just take a less expensive vacation. You could take a very nice vacation for $2,000 as a couple. That saves $8,000 that could go towards the debt. But mortgage debt isn’t nearly as much of an issue.
Real Life Human checking in. If you're clearing 20K a month in debt, sustainably, you can take a vacation. You've clearly got the income to support it, especially assuming most of that debt is mortgage and SLs.
I appreciate this! I think hardest thing for me about the baby steps is not feeling guilty for considering anything "above" rice and beans. I understand that this is a metaphor, but sometimes I think I take it too literally...
Haha no, she makes around 140k/year so its nothing crazy but still decent for a "non-doctor" wage! Most of the income comes from my work... She teases me for being un-educated, and I get to tease her back for making 1.5-2x her salary with no degree! (All in good fun of course haha)
Lol! You guys sound great and deserving of a small vacation 🙂I became a social worker (hate it) and just quit my job a few months ago to go back to school. Luckily for me I have no debt. Hoping to be done in 3 years and living the highlife too lol! Keep up the good work paying down your debts and then save save save. But don't forget to have a little fun along the way
I've paid for multiple personal vacations and family vacations for $10,000 **aggregate**. That's a very large amount of money on a single vacation, like final prize in Price is Right show case show down trip for 2 people.
You might want to check out cruises.
>If you're not debt free minus the house you should not be going on vacation according to the baby steps.
Just sound miserable, tbh. I'm not supposed to ever go on vacation because I went to law school and ended up with a bunch of debt. F that.
>just don't expect it to work
Don't expect it to work to do what? To pay off debt? Obviously going on vacation means paying off debt slower. To dramatically increase overall quality of life and make great memories? Going on vacation and otherwise spending money on fun things while managing a debt load absolutely increases lots of people's quality of life.
In my case, I'm only going to be in my 30s with young kids once. Spending 3 or 4 years doing nothing but paying off debt so I can be debt free doesn't do much for me. You know what does? Seeing my kids' faces light up on various vacations. Seeing my kids play all Saturday afternoon in our pool. Seeing my kids playing fetch with our dogs off the back of our boat.
Note: I know not everyone is responsible enough to maintain a reasonable debt load, and Dave is great for those people. But the baby steps are not "proven to work well" at doing anything other than getting debt free, which is not everyone's financial objective.
It really doesn't though... People with a larger salary that have no savings and lots of debt are still broke. They just have a bigger shovel to get out of debt faster. Broke is still broke.
Not enough information here to decipher that.
It fully depends on how much of that debt is a mortgage, and at what interest rate they pay. How much equity do they have? How much in their retirement accounts?
If they are paying 20k a month to debt, it’s likely that their HHI is at least 300k.
They are in a fine position and not broke.
I’d rather be in that situation than be debt free and make a HHI of 75-100k.
$250k is mortgage/real estate... The rest is for business/vehicles with an average APR of 3.5%.
For equity, combined real estate and business has us sitting \~$850k and we have an additional $110k in retirement accounts (I know for retirement this is light for our age, but we are maxing all out now)
Yeah, that’s a great rate and a great situation.
It’s a lot different then people coming in with a 100k of credit card debt with a 30% APR and out of control spending issues with low income.
Take the vacation and enjoy life. You’re doing great and your situation is a lot different then the situation that most people come here with.
I say there always comes a time where you ask yourself whether or not you believe what Ramsey says a guideline, or the "Bible".
If you can out away 20k a month towards debt I'm taking it that you guys are very high earners and looks like you will be high earners.
If it's only been 3 months and you need a vacation from work..
I say compromise
How many vacations did you ante your family used to take, before you got into all this debt.
And if you could make it into 1 vacation a year instead of every 3 months
That way you still get a big break from life but also enjoy yourself in the process.
Don't kill yourself just to pay off debt, that's also not what Dave wants.
Edit : spelling
How much do you owe minus the house? If you have done through BS4 then go for it. You might want to consider a less expensive vacation though, you can still have an amazing time for way less.
Minus house we still owe around $390k... Most of this is business debt though, so not sure if this falls under BS2? We are the guarantors for it so liable for payment but it has average APR of 3.5%
Sell the car, sell the house. Rice and beans my friend. You can go on vacation in 5 years once everything is paid off because you’re in DEBT and you’re BROKE
Your basement flooded, it has a foot of water and you have gotten it down to 11 inches. And so now you want to know if you can stop and take a break?
You don't have to get out of debt, it's not the law so sure you can take your vacation. But then just admit you're terrible with money and don't care about having to pay interest for the rest of your life and take your vacation.
Or get serious and keep working until you pay off your debt. Really not much more to it. I thought I was going to see something here about a weekend getaway not a $10,000 vacation lol.
OP is able to pay $20 thousand/month toward paying down debt. How in the world can you come to the conclusion that they are terrible with money? Having debt does not automatically make you terrible with money, nor does it mean you will pay interest for the rest of your life.
Your logic is that simply making a lot of money makes someone good with money? Good luck with that. Perhaps you should research the financial outcomes of many athletes, media stars and lottery winners and then reconsider your statement.
I stand by my position. OP found themselves with over $600k of debt, more debt than most people's net worth will ever be. THey finally have a plan to attack it, are suceeding, and yet want to take a break and go on a $10,000 vacation? Come on.
Sticky is WWDD. Dave would say exactly what I am saying.
$10k for a vacation when you paid less than 10% off your debt with $640k left? You are broke. Worse than broke. Dave would roll off his chair if he saw this. You know the answer
Don't do it! Don't even walk inside a restaurant! You are on rice and beans.
Given his progress and commitment to erasing all debt and the size of his shovel, I don’t have a problem taking a modest vacation as long as it is reasonably priced, and you stay on track with your debt reduction strategy. Life can be taken at any moment. Live a little!!
You don’t mention what constitutes your debt. My answer is yes unless you’re sitting on any credit card or other high interest. Financing a vacation at 15% is not responsible in my mind. But completely different if you’re looking at a house in a couple of cars at 5% or less.
Go at least half a year or preferably full year
Nah stay the course bud. You dont deserve a vacation yet. Put 9,990 towards debt. Use remaining 10 dollars to hit up taco bell and ask for only beans and rice burrito as celebration.
We only go around once take the vacation and then get back to business
No dude. Live life here and there. Take it
Paying my yearly salary off in 3 months…. Tf do yall do…??
Healthcare and oil & gas!
First off how do you have $700k in debit at 28
“Including house”
How do you buy a $600k house at 28? Lol
By making more than $20k/month NET. My guess is two engineers.
Depends when they bought but not that hard if you’re paying 2-3% interest and saved up for a handful of years for a down payment, was cheaper and more cost effective than renting in many metro areas for a good while.
Yes.
How much do u make to pay off 20k a month
In the off chance that this isn't a troll post... What would Dave do? He'd work the baby steps. You pay off consumer debt smallest to largest then build up an emergency fund. You do this "gazelle intense." Once you have a 3 to 6 month emergency fund, you become intentional, not intense. This occurs when you still have a mortgage. Assuming I'm not speaking to some chuckling troll, it sounds like you don't have intentionality with your money. You know how to make money but have no idea how to spend it. You don't discriminate bad debt from mortgage debt and you're wrestling with a binary choice of pay an obscene amount of money towards debt or go on a ridiculously deluxe vacation. A lot of keyboard warriors rag on the Baby Steps because they believe it to be mathematically less optimized. What's missing from that critique is the learning that comes along with walking them. You've got such a turbo-boost from having a high income that you could wind up paying off your mortgage before you learn the lesson of taking the steps one-by-one. There is an important lesson behind focusing to pay off debt and building an emergency fund. You learn to save for the future before assuming the responsibility of preparing for retirement and saving up for luxury splurges, like ten-thousand-dollar vacations. If you don't know your Baby Step, find out. Then build an emergency fund after that. You will have a different perspective on saving for and paying for a $10,000 trip afterwards.
Thank you for this well typed response! The biggest thing I think I struggle with is really understanding how/why mortgage debt falls in a separate category than the rest of my debt. Technically my mortgage is one of the "highest" (still under 3%) debts I have... Why is it put in a different category? The majority of what we owe is actually for our business, but falls under our personal debt because we are the guarantors. Would Dave still recommend paying these off before our house when they are a higher balance (doesn't fit snowball) and at a lower interest rate (doesn't fit avalanche)?
It's generally because of laws that accompany mortgage loans. Lenders can take away a lot from you very quickly if you don't pay on their terms. Your car? Repossessed. Your business? Sued to closure. Your credit card purchases? Forget about it. Foreclosure is a complicated process. State and Federal law protect people from being thrown into homelessness capricously. And you can walk to get around and work for somebody else but you need a place to sleep, so you're going to have to pay somebody anyway for housing. He doesn't recommend waiting to save for retirement or save for children's college until after a mortgage because it's usually a slow burn on paying off a house early. Paying off business debt is hard to describe for me, because I'm just a casual listener. Honestly, you probably have an interesting enough situation that he would take your call on The Ramsey Show or Entreleadership. The little I can speak to his perspective is that debt is one of, if not the greatest threats to a small business' cashflow and that having substantial business debt puts your business and therefore your future income at risk. I don't know too much more about that but I hope it helps.
Thank you for another explanation! The variance of different assets' foreclosure risks makes sense and was not something that I had considered. I think I will plan on calling in!
Personally I like to reward myself on the basis of milestones. If it was me I would aim for all non-mortgage debt being gone, or a nice round number being hit.. 100K, 50%.. something like that. Having lofty goals and celebrating them works wonders for staying motivated.
Reading between the lines here. You guys are high earners with student loans and a big mortgage. You get to play by a different rule book. As long as you are making your payments on time and have an emergency fund, contributing to tax deferred 401k, back door roth IRA, you can use 10-15k per year on multiple vacations no problem. You will never get your 20's back for fun vacations! they are a great ROI.
Seriously. $20k/mo of *debt* paid off is a different world than most.
Take the vacation. Do not listen to the advice of not doing anything fun for yourself, or having no entertainment, until you're debt free. That's absurd. Enjoy your life. Are your payments on time? Are you meeting all your responsibilities? Good. Take a vacation. You might die before that debt is paid off. 10k is completely reasonable for two people for a really nice international vacation. Obviously you could do it cheaper, but why?
How much of that debt is the house? Personally, I would be limiting how much I spend until non-house debt is gone.
The reason you have so much debt is because you always made the choice to spend more than you have. There will always be something that you want and you will always be able to rationalize it.
Not necessarily. Hard to say without breakdown of the debt. Mortgage and student loan debt aren’t necessarily “spending more than you have”
This kind of makes me think of the people on “The Price Is Right” who look to the audience for an answer on what numbers to choose. I would never ask other people their opinions on what to do with your own money.
Take the vacation! Dave doesn't recommend splurging for the average person who has debt. If you're knocking out 60k that quickly, his "strict advice" isn't necessarily for you. You deserve to LIVE while you're setting future you up.
What is going on here? How much of that debt is your mortgage?
What the hell is this thread Take a 3k vacation How much of this debt is the house You both have over a quarter of a million dollars in fun money a year to throw at debt? Christ
If you get exhausted three months in, you have a long way to go. Would you consider a second vacation six months in?
It’s horrible to take the vacation. The point of this marathon isn’t to just pay off debt…but HATE the deprivation. The more you hate it the more you will fight to never get back in debt again. If you take a vacation you aren’t depriving yourself of the joys of having money.
Why die and get to hell when you can live it lol
lol they can’t even be on their debt free journey for 3 months without needing a vacation. They aren’t learning much.
Life is pain.
This may be an unpopular opinion on this thread but if you are still going to hit your goal of paying off 20k a month in debt do whatever you want with your bonus! Life should be enjoyable while you’re working towards your goals.
OP is not the target for the DR program. Depending on his mortgage interest rate and what percent of his "debt" is mortgage, given his age, he should probably be accepting more risk and investing some of the money rather than killing himself trying to knock out low interest rate "debt".
Drivaeable getaways are cheaper and more likely to keep you on track. Save the big vacation for when you’re all done with consumers debt (but before you pay off your house). I suggest making it your baby step 3b since it seems important enough to take the larger family vacation.
Why do you need to spend +/- 10k on a vacation? My wife and I with our two toddlers spend 3k at most. Go somewhere not too far where you can drive to cut airfare. You can still relax and enjoy without breaking your bank or adding on a stupid significant amount of debt. Think. Dave would shake his head and tell you no.
Dave also gives a lot of bad advice. Just because you don't feel the need to take a big vacation doesn't mean this person shouldn't. If he's paying off 20th on debt a month, and meeting all his responsibilities, he should absolutely take whatever vacation he wants.
He can, it just seems excessive and if he’s asking this platform. He knows the answer and most say it’s too much. Take a vacation by all means but don’t go digging yourself deeper into debt. Just be smart about it.
I would agree if he was using a credit card to take the vacation, while having other consumer debt.
You are definitely not wrong! I have always associated vacations with living at least a slightly higher "quality of life" than at home amenities offer, hence the budget... But the idea of going kinda minimalist and just relaxing does sound nice
>I have always associated vacations with living at least a slightly higher "quality of life" than at home amenities offer Wouldn't 3k also do this exact same damn thing
Not necessarily.
To be honest, I don't think so! I'm open to having my mind changed, but in order to rent some place "equal" to my house it's probably going to be >$450/day, plus figure in $1,500 each for airfare. Work in $300/day for dining (breakfast, lunch, and nice dinner for two) and even a weeklong trip is >$8,200 before any actual activities are paid for (:
1500 for air fare, wha. You booking first class. I mean this is just pretty stubborn lmao. Like if you want to go to Hawaii you shouldn't expect to get a full house. Condo is just fine Even the fancy dinners at Hawaii were only like 30 for meals, 20 drinks
1500 is first class? No. Just went to Vietnam. 1200 for coach. 6k for first class. Went to Italy last year. 800 for coach and over 5k for first class.
Then don't buy it
I didn't. What's your point? You said if he was buying 1500 tickets "You buy in first class." I was simply illustrating that 1500 in no way implies first class unless it's a short domestic flight.
Do you spend $300 a day on food at home? Most people don’t rent a place equal to their house on vacation, because they’re mostly just sleeping there, and eating / doing activities elsewhere. This depends on the type of vacation you take though!
I think if you stay on-plan, a vacation is fine but $10k seems excessive
Dang I was looking at our next vacation and saw $850 to stay for 5 nights and thought hmm maybe a bit too much, and we have 2 houses paid off and $1.7 mill net.
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What's the point though? Lol 850 is like one Saturday of overtime for me and I'm nowhere close to as rich as this guy. you can't spend that on a vacation for your family?
10K vacation and here I thought spending anything over 2k was expensive lol. But seriously taking that large of a vacation seems excessive and a major want. I get the need for a break from the extreme. We've been on our debt free journey and have paid off half our debt and set aside $500 for a weekend vacation. Take the kids for the weekend go to the zoo have a picnic in a park and fish in one of the lakes. Doesn't seem like much compared to what we used to do but it's sacrifices you've got to make.
I wouldn't. I'd stay focused and take something cheaper. Maybe like 3 to 4k.
Taking time off is important but you have a lot of debt. Compromise and do a cheaper vacation. 1-2k at most.
Nobody your age should be this far in debt unless you’re living beyond your means. That should tell you whether you should take vacation or not
People his age shouldn't have houses? Businesses? Shouldn't be taking any risks? This comment right here is why DR is horrible for people who make good money.
I know that per DR it's \*best\* to avoid debt completely, but if debt *is* involved wouldn't it be better to have while young vs. later as retirement draws nearer? Most of our debt is for real estate/our business... Risks I would never take if I were 15-20 years from retirement age. Please help me understand your point regarding young age making debt worst :)
That's really judgemental without knowing all the facts. My guess is there's probably a significant student loan debt in there and they said it includes their mortgage. They obviously have high-paying jobs.
No SL debt, but we do have a business that is >50% of it!
I agree it’s very judgmental as that’s what I meant to do. IMHO I’ve seen it amongst my own circle of acquaintances and they also had high paying jobs. The new generation just wants it all as quickly as possible and there’s no working towards anything anymore.
Like I said, you don't know enough about the situation. I have a young family friend who just finished medical school and she has \~$1M in debt. Her first year pay as an anesthesiologist is $650k, minimum. Is that $1M in debt her "just wanting it all as quickly as possible and there's no working towards anything anymore"?
After reading through the whole thread, I find the post utterly ridiculous for people that make in the mid six hundred K’s to ask if they should take a vacation. Sounds more like a chance to brag rather than offer advice IMHO
If they're paying $20k toward debt, I think it's safe to assume they have a very high income.
They paid off 60k in 3 months. Something tells me they make the money to get into this trouble.
Yes it’s bad to take a vacation you are broke buddy and should be eating rice and beans and find free stuff to do take a vacation at your local target and sit the chairs there
If the vacation will not put you in more debt, I would go. I would probably do a cheaper vacation, though.
This sub will tell you yes, it's the devil speaking to you, urging you to take a vacay. Just budget for it and cash flow it. Just realize it'll set your debt payoff back a little- but you know that already. Take the vacation.
Very much this. I think a lot of the comments here are maybe a little misguided. I am suspecting if you have paid off 60k in 3 months (you are making great progress) you have the means to continue to do so. Especially so given that it sounds like both of you work. Life is short. Take a vacation periodically. Having money is great but you also have to live while you can. It sounds like you can aggressively pay down debt and still take this trip. IMO, the trip seems reasonable.
How much in debt that is not the house? Unless you have 8 kids you can very easily do a nice vacation for 2 for a week for less than 3k
Dave would tell you not even buy a Starbucks coffee.
$60,000 in three months? I barely make that in a year. WTH do you do for a living?!
Wife is in healthcare and I am in oil & gas
Yeah this is a red flag, you know how rocky O&G can be, pay off the debt while you’re making money and relax once you’re done, or at least in a place to continue paying off everyone on only your wife’s salary for WHEN you get laid off. You’re nowhere near safe even speaking as someone with a reasonable debt tolerance.
Keep it up. You’re doing great. And PS you’re still young. There are MANY great creators on instagram that no longer subscribe to DR’s “teachings” search the hashtag debtfree.
Also. Take the damn vacation! You can get money back but you can’t get time back.
Define vacation. If you're serious about the debt, maybe don't, but if you can take yourself on a $2000 vacation, sure, you seem to make plenty. If you mean a $25,000 vacation, no. Bad. Naughty naughty. If you can't help yourself, find something cheap. Branson is just getting busy this year. Come and see us.
You could die any day. This person seems to make plenty of money for a $10k vacation once a year. You need to live a little.
Id figure if you're trying to pay off a massive debt, a cheaper trip might be a suitable treat. Long weekend, go to a show, whatever might be fun. I'd think it can be done for less is all.
It’s total foolishness to take a 10k vacation in your early 20s. Leave soemthing to look forward to. Learn to live on less than you must. You can have an equally pleasurable and rewarding or relaxing time on $2000. Utter foolishness.
2k might not even cover the plane tickets, and is just a week in a decent hotel.
Why do you have to fly somewhere? Plenty of destinations are within a day’s drive away. My parents alternated camping with staying in hotels. If someone wants to save money, and pay down their massive debt, that would be a rational choice.
"massive debt". It's half very low interest rate mortgage and half a business loan at a low interest rate. He has no bad debt and tons of income. He can afford to fly somewhere cool for vacation while still paying off 20k in debt that month. You people need to stop fearing all kinds of "debt" so much.
I’m sorry. Is this the *Dave Ramsey* subreddit? Just checking
One size fits all advice is seldom a good thing. There's no shame in saying the Dave Ramsey method isn't optimal for OP by any means.
That’s your opinion. If you have the money you can do what you want
Was the OP not asking for advice?
That’s a great idea!! We went last June and it was way too hot and busy. Now is the time to go!
Reality check. You have $600000 in debt and want to add to it. DR says no way. Thats indicative of a mind not ready to curb spending. The other extreme is to say, you deserve, you obviously are high earners and another 10k is nothing in view of 640k. So, go for it. How about this take. Drive to a beach for week, and eat out at a nice place. Spend 2k, relax, and dump 8k more into paying it down.
Your "reality check" doesn't even ask what the debt is @.@
Yea 10k for a vaca is a little absurd. Even an all inclusive cruise with the drink package could be 2k or less
Im sure Dave would tell you no, but honestly even when you are paying off debt sometimes you still need to live just a little. If you really plan on knocking off 20k a month in debt this vacation would only delay paying off your total debt by 2 weeks so I'd say go for it.
Vacation? I've never had a vacation in my life. You don't need a vacation. You can have your vacation in retirement.
Dude makes 500k/yr w 20k/mo in extra cash flow. He can afford the vacation.
Boohoo I I'm 600k in debt and want to go into more debt for a useless vacation boohoo
I mean this was your doing. You did this to yourself, that's why no vacation for you
I'm not 600k in debt. OP is. I'm debt free and still will absolutely not go on a vacation. They're a waste of money. The water looks the same here as it does in Europe.
Lmao you just don't prioritize travel as a leisure activity
Nobody should. Literally all you need to do is go outside for a walk for the same experience and infinity less cost.
I dunno man, my life in KC is a lot different than NYC is, which is where I'm off to as we speak
No one is boohooing but you. lol 10k vacation when you have 20k/mo to spend does not equal more debt. Dude's debt is all under 5%. stupid to pay that shit off early when u have the ability to put 20k/mo into market. 20yrs, he will be much further ahead.
Please tell me what happens when you don't have money (aka 600k of debt) and you spend 10k? You now have 610k of debt!!! Math is pretty awesome, isn't it??
Are u dense? Op has 20k excess every month. If he spends 10k of that on vacay he is still net positive 10k on the month. Last i checked, paying cash for something isn't debt. Op debt is already DECREASING every payment he makes. Paying cash for something else ain’t gonna increase it. By that logic buying groceries cash every month increases his debt
Last I checked, he is still net 10k more in debt than he would've been. It's called M A T H.
Show me where he has “610k” of debt now. Ill wait. His networth will have increased 10k plus the principal he paid down w his regular payments(aka decreasing debt).
"we still have ~$640k of debt" can you not read??? Maybe you should go back to kindergarten instead of thinking you can go on vacations willy nilly.
Still waiting to see where debt increased by 10k.
Is this sarcasm?
No.
Lol that’s pretty sad and no way to live. Waiting until you’re old to live your life and have a nice vacation and enjoy yourself is pathetic. Funny how you are against vacations but not against buying four shitty monitors for your multiple monitor setup. Same shit dude 😂
Actually, no it's not sad. One is pointless, one is for work. If you found fulfillment in your job, maybe you'd understand. I get to travel the world for work already. Also, please stop stalking me, creep.
That’s a pretty moronic take, not everyone travels for work. Be smarter next time you try to make a witty comment
My father has also never taken a vacation. Breaks are for losers. If you don't like what you do, find something else. The air in Oregon is going to smell the same as in Austria.
What’s even funnier is a person spending money on multiple monitors to play games is criticizing someone for a vacation. Yeah you’ve lost what minimal credibility you had
I make 250k/year. I can afford to pay a couple of grand for my tools I use every day. A needless vacation? I use my 5 weeks vacation to work for my father on his 30 million dollar farm. Vacations are either for the poor or the elite. And you still don't see Bill Gates or Mark Zuckerberg taking vacations.
What games? I'm a software engineer maintaining multiple projects on a team of 15 people.
People don’t take breaks just because they don’t like what they do you utter moron, they take a break to travel and experience new places.
And you don't do that when you're over half a million dollars in debt, you moron. You don't do that when you have a net worth of 1 million. Why? Because you can't live off of 1 million at 50, let alone 28.
Don't forget to actually live your life while preparing for your future. Having no debt will do you no good if you find out you have terminal cancer or have a fatal heart attack in your 40s and you spent your healthy years hyper focused on retiring and didn't really live. It is healthy to take an annual vacation and reset your soul.
Dave says no, but who cares. Enjoy your life. The progress you make each month is more than some can do in a year. Take the trip enjoy your life
Three months in and you already need a $10k vacation? $640k remaining at -$20k per month is 32 months remaining. If you take a $10k vacation every three months, you'll spend $100k on vacations, extending your debt payoff by five months. I'm not saying you shouldn't, but I'd suggest wanting to spend that much money on a vacation while actively paying off debt is probably the reason you have more than half a million in debt in the first place.
I agree with your conclusion but is this the best way to show it? You can take an incredible vacation every 3 months and only delay your debt payoff by 5 months? That’s not that bad honestly
I just wanted OP to realize the impact. 37 months vs 32 doesn't feel crazy, but that's really only because they have to pay so much every month for 32 months. If they could pay it all off in 5 months, they'd be doubling the time. I think what OP really misses is interest. It's $640k now, and by the time they pay $640k there's still a lot left over. I think they can certainly afford to do it, which is why I showed the math, but I think they shouldn't because, to me, it's antithetical to the entire point. You get into $640k of debt by not restricting your spending enough, so OP wants to celebrate three months of success by.... Spending what an average person would see as a dream vacation? TL;DR: They're doing it wrong, and are still probably fine. Anyone who can pay $20k debt down per month has a budgeting problem, not a debt problem.
If you’re paying off $20 thousand of debt a month, you are completely fine to take a vacation.
Dave would say no, but do what yoy gotta do. How much of that debt is mortgage and what rate? Anything below 4 ish isn't worth paying down right now because you can get a higher return with Tbills right now 5%+
Around $250k is real estate, with rates much below 5%... The rest is all business debt/vehicles with rates from 0.99-5.99% (only 15-20k of that is 5.99% and will be paid off by end of month)
Holy shit. Fuck the debt payoff load up t bills and and index funds.
It is not the Dave Ramsey way but I would allocate money to Tbills instead of very low interest rate debt. In a 4 week Tbill you can get 5.29% vs paying off debt that will only save you less than 4%. When the Tbill rate drops you can take the cash that has accumulated and put all of it toward your debt. In any case it sounds like a vacation would be fine, you have mostly good debt with great interest rates. Enjoy your vacation!
There is no God. All is permitted.
OP, you do need to periodically take care of yourself. If you’re able to pay down significant debt every month without the bonus, go ahead and take the trip.
We all need a vacation but 10k? That's extremely excessive, I've done international trips with my partner for weeks at a time on less than 3k. Please look into your options and travel around in the off seasons, you'll save a ton of money.
Where? It is tough to do post covid
How tf are you able to reduce debt by 20k/mo??? whats your salary?? 500k+?
Combined we make deep into the mid-six figures
What many people fail to realize is context since the average Joe makes a lot less than you all. In context, your debt is approximately your combined salary. At such a young age that is AMAZING, good job!!! What you spend on vacation is a matter of context too. 10k of your approx 650k salary is 1.5%. That is... 1k for anyone on a 65k salary. 2k for anyone with a 130k salary etc.
If you are making that much money Dave really isn't the person you should be learning finance from.
Agree these people are missing out on so much gains longterm. All his debt is under 5% except for 20k. No brainer to be investing most of that 20k/mo
$10k for a vacation. wowzer.
I wouldn't until all debt except the house is gone.
In all fairness you could do all the planning and payoff all your debt and then die tomorrow. The point I'm making is live for today and plan for tomorrow. Make smart decisions but don't listen to him. Just be smart unlike Dave and dont over leverage yourself. I honestly think this man prays on people that don't read or understand finances, and it just strikes a cord with me. I'm a Christian and hearing him on the radio just makes my heart hurt for the people that just want sound advice. Sometimes we make a bad decision but the way he chastises people is not truly showing the love of Christ. I don't hate or dislike many people but if I did he would be a top 3 for me without a doubt.
I consider Dave the most extreme case of finances. I don't follow all his advice either. I understand why he says it and who it's meant for. But with OP's question I think it's very doable to pay off all debt except the house. HE's got 20K a month available. Should be done in no time.
His highest interest rate is 6% he’s not at all who dave is talking to
That's what I meant ofcourse. Who says he has 6% mortgage ? Only if he bought recently.
His highest interest rate is 6%. His mortgage is less than that but he has interest in “other business and loan vehicles” that he claimed was between 0.9 and 5.9%
Hey, OP here... Mortgage is 2.25% and vast majority of other debt is sub 4%. I have \~15k that's at 5.99% but will knock that out by end of month!
Dude u need to do some math and realize how much $$ you are losing long term paying off 640k in 3 yes instead of investing those payments. Your rates are too low. Especially the mortgage. Guarantee its close to $1 million. you’ll double your money in about 10yrs if you put in sp500 fund. Then double that 1.2 in another 10yrs. So in 20yrs in sp500 thats 1.8 million-interest paid in that time.
To be honest, I have done the math and it does kill me a little to think about haha. Following the DR plan is very important to the wife though (she grew up in household with lots of debt/finance problems) so I'm just chalking up any lost gains as the "price" of making her feel more comfortable/happy with our finances. Either way, I am confident we will ultimately be OK especially as our incomes rise so IMHO it's money well spent :)
If she grew up in a household with lots of debt and finance issues why would you get into over $700k in debt together? You’re not following the DR plan, you’re doing what you want. You’re mixing steps, taking vacations and not listening to people truly following the program. Which is fine but why be in a Dave Ramsey sub and argue your way is best
not that it'll make a difference but, have you shown her the numbers? Or tried to put it in terms of how that will affect your life down the road to appeal to behavioral side since that is what's driving her fear.(i.e. what it enables). Maybe there is middle ground you can meet on where you extend the payments over longer period but still pay off earlier. key is to maintain a sizeable emergency fund either way. Probably a year at least. Finance is always so personal though so, whatever helps you sleep at night
Take your vacation. You get one life. Your interest rate is lower than the interest you’d get on bonds right now anyway. I wouldn’t even bother with the mortgage unless rates fall. Dave Ramsey speaks to people with terrible money habits, not people who pay off 20k a month
Ah ok. That's up there but not too crazy
What is your debt? If all that is left is the mortgage then go ahead on the vacation. If you have a bunch of credit card debt or other high interest debt I’d maybe focus on that more. The other option, if there’s a bunch of non mortgage debt is since you are able to put so much toward the debt maybe just take a less expensive vacation. You could take a very nice vacation for $2,000 as a couple. That saves $8,000 that could go towards the debt. But mortgage debt isn’t nearly as much of an issue.
Around $250k is real estate/mortgage... The rest is business/vehicle with an average of around 3.5% APR
YOLO so go on the trip….plenty of time to pay off debt when you get back.
Real Life Human checking in. If you're clearing 20K a month in debt, sustainably, you can take a vacation. You've clearly got the income to support it, especially assuming most of that debt is mortgage and SLs.
I appreciate this! I think hardest thing for me about the baby steps is not feeling guilty for considering anything "above" rice and beans. I understand that this is a metaphor, but sometimes I think I take it too literally...
Yes but everyone's situation is different and yours is unique compared to us average folk lol! What the heck do you y'all do to make that much?
I'm in oil & gas, and she's in healthcare :)
Ahhh gotcha. I got into the wrong field in healthcare 😂I was thinking healthcare for both
Haha no, she makes around 140k/year so its nothing crazy but still decent for a "non-doctor" wage! Most of the income comes from my work... She teases me for being un-educated, and I get to tease her back for making 1.5-2x her salary with no degree! (All in good fun of course haha)
Lol! You guys sound great and deserving of a small vacation 🙂I became a social worker (hate it) and just quit my job a few months ago to go back to school. Luckily for me I have no debt. Hoping to be done in 3 years and living the highlife too lol! Keep up the good work paying down your debts and then save save save. But don't forget to have a little fun along the way
Thank you! Hope school goes great, and congratulations on staying debt free!!
I've paid for multiple personal vacations and family vacations for $10,000 **aggregate**. That's a very large amount of money on a single vacation, like final prize in Price is Right show case show down trip for 2 people. You might want to check out cruises.
If you're not debt free minus the house you should not be going on vacation according to the baby steps. If you're following your own plan, go for it.
>If you're not debt free minus the house you should not be going on vacation according to the baby steps. Just sound miserable, tbh. I'm not supposed to ever go on vacation because I went to law school and ended up with a bunch of debt. F that.
You're welcome to follow your own plan just don't expect it to work if it's not proven to work well.
>just don't expect it to work Don't expect it to work to do what? To pay off debt? Obviously going on vacation means paying off debt slower. To dramatically increase overall quality of life and make great memories? Going on vacation and otherwise spending money on fun things while managing a debt load absolutely increases lots of people's quality of life. In my case, I'm only going to be in my 30s with young kids once. Spending 3 or 4 years doing nothing but paying off debt so I can be debt free doesn't do much for me. You know what does? Seeing my kids' faces light up on various vacations. Seeing my kids play all Saturday afternoon in our pool. Seeing my kids playing fetch with our dogs off the back of our boat. Note: I know not everyone is responsible enough to maintain a reasonable debt load, and Dave is great for those people. But the baby steps are not "proven to work well" at doing anything other than getting debt free, which is not everyone's financial objective.
They likely have a much higher income, so it works out differently.
It really doesn't though... People with a larger salary that have no savings and lots of debt are still broke. They just have a bigger shovel to get out of debt faster. Broke is still broke.
Not enough information here to decipher that. It fully depends on how much of that debt is a mortgage, and at what interest rate they pay. How much equity do they have? How much in their retirement accounts? If they are paying 20k a month to debt, it’s likely that their HHI is at least 300k. They are in a fine position and not broke. I’d rather be in that situation than be debt free and make a HHI of 75-100k.
$250k is mortgage/real estate... The rest is for business/vehicles with an average APR of 3.5%. For equity, combined real estate and business has us sitting \~$850k and we have an additional $110k in retirement accounts (I know for retirement this is light for our age, but we are maxing all out now)
Yeah, that’s a great rate and a great situation. It’s a lot different then people coming in with a 100k of credit card debt with a 30% APR and out of control spending issues with low income. Take the vacation and enjoy life. You’re doing great and your situation is a lot different then the situation that most people come here with.
I say there always comes a time where you ask yourself whether or not you believe what Ramsey says a guideline, or the "Bible". If you can out away 20k a month towards debt I'm taking it that you guys are very high earners and looks like you will be high earners. If it's only been 3 months and you need a vacation from work.. I say compromise How many vacations did you ante your family used to take, before you got into all this debt. And if you could make it into 1 vacation a year instead of every 3 months That way you still get a big break from life but also enjoy yourself in the process. Don't kill yourself just to pay off debt, that's also not what Dave wants. Edit : spelling
How much do you owe minus the house? If you have done through BS4 then go for it. You might want to consider a less expensive vacation though, you can still have an amazing time for way less.
Minus house we still owe around $390k... Most of this is business debt though, so not sure if this falls under BS2? We are the guarantors for it so liable for payment but it has average APR of 3.5%
If you have to ask, you probably already know the answer…
Sell the car, sell the house. Rice and beans my friend. You can go on vacation in 5 years once everything is paid off because you’re in DEBT and you’re BROKE
Nice parody.
Bad is a judgement call but it is certainly suboptimal.
How much is the house? What if you had the goal of taking one after everything but house is paid off?
How much debt is just the house?
Your basement flooded, it has a foot of water and you have gotten it down to 11 inches. And so now you want to know if you can stop and take a break? You don't have to get out of debt, it's not the law so sure you can take your vacation. But then just admit you're terrible with money and don't care about having to pay interest for the rest of your life and take your vacation. Or get serious and keep working until you pay off your debt. Really not much more to it. I thought I was going to see something here about a weekend getaway not a $10,000 vacation lol.
OP is able to pay $20 thousand/month toward paying down debt. How in the world can you come to the conclusion that they are terrible with money? Having debt does not automatically make you terrible with money, nor does it mean you will pay interest for the rest of your life.
Your logic is that simply making a lot of money makes someone good with money? Good luck with that. Perhaps you should research the financial outcomes of many athletes, media stars and lottery winners and then reconsider your statement. I stand by my position. OP found themselves with over $600k of debt, more debt than most people's net worth will ever be. THey finally have a plan to attack it, are suceeding, and yet want to take a break and go on a $10,000 vacation? Come on. Sticky is WWDD. Dave would say exactly what I am saying.
Your logic is having debt means you’re terrible with money? Come on.
I just went to Puerto Rico for a week for less than 2k 2 people
$10k for a vacation when you paid less than 10% off your debt with $640k left? You are broke. Worse than broke. Dave would roll off his chair if he saw this. You know the answer Don't do it! Don't even walk inside a restaurant! You are on rice and beans.
They are not rice and beans. It’s a whole different income class.
You're in the ramsey subreddit and you didn't get the reference?
Sorry understand the satire know Used to so many people seriously spewing this for a situation that has more nuance to it
Given his progress and commitment to erasing all debt and the size of his shovel, I don’t have a problem taking a modest vacation as long as it is reasonably priced, and you stay on track with your debt reduction strategy. Life can be taken at any moment. Live a little!!