No Debt Holidays

dreaming about summer holidayIt’s coming up to the summer holidays for us here in the UK and so holiday planning is in full swing. I’ve been listening to the Dave Ramsey Show podcast  recently, and his golden rule about borrowing.  He believes, ‘Cash is king, and being debt free has taken the place of a BMW as the status symbol of choice.’  And I know what he’d say about borrowing for holidays.

Those of you in North America might already know of Dave Ramsey.  He has a syndicated talk back radio show in which he dispenses money advice.  If you live in other parts of the world look for the ‘Dave Ramsey Show’ on iTunes or Stitcher. More often than not he berates his callers, My personal favourite  ‘Are you sure you want to do that?  That’s like inviting Murphy and his three cousins Broke, Desperate and Stupid to come live in your spare bedroom.’

I must admit in years gone by I’ve often invited Broke, Desperate and Stupid to live in my spare room.  I did the wrong thing of drawing money out of our house mortgage to fund a Cracking piggy bankfamily trip to Australia – my justification? the girls needed to see their mother’s homeland.  But not anymore.  Although I’d already started to come around to Dave’s way of thinking, even before I heard him he just helped confirm my on idiocy.

The problem I had, which maybe some of you can identify with is, wanting the holiday my income couldn’t afford. To quote Dave again I need to remember to ‘Act your wage.’   Off course I told myself it is for the greater good, that the family needs a break. That my daughter with additional needs deserves a fun holiday (which she does). But actually what she really deserves and needs more is a secure financial future.

My solution, not based on rational thought, was to take money from the mortgage or put it all on a credit card.  But it’s at times like these I should have done the maths. I should have taken out the fact sheet they gave us when we signed up for the mortgage; that we skipped Throwing Away Money into a binover because we just wanted to buy the house.  That small print that tells me  something like for every pound, dollar or euro your borrow, you will be paying back to the bank 2.4 times this.  That would have reminded me that the 3,000 holiday was really going to cost me 7,000+ when I had fully paid it back.

I should have remembered that credit cards aren’t the answer either.  Their annual interest rate is often close to 25%, which again adds extra charges to any holiday costs especially if I don’t manage to get it  paid off in full very quickly.

The answer is, and thankfully I am ready to accept it now , to save gradually throughout the year.  Budget.  Do what my parents’ did.  Put a set amount into a savings account depending on where we are planning to go so that when the time comes to book the holiday the money is there.

To be honest I have always believed in avoiding debt for anything other than to buy a home. But over time I started to ignored my inner voice telling me debt equals interest payments. I completely forgot that  interest payments are money I am not able to use towards helping my family and especially safeguarding the future of my daughter with additional needs.

In the long run, I know that to give my daughter the best I can means looking after myself ladder to the sky and successfinancially.  Before I help others I have to help myself. As Dave tells me very week ‘Live like no else today, so you can live like no else tomorrow’.

I’m not suggesting for one moment that you or I cancel holidays already booked but I am suggesting that we should all think before we put holidays on debt.  I need to think more before I act, to build long term financial security, so all the dreams I have for my daughter, with additional needs, to live an independent life are affordable dreams.