Should I book a holiday even though I have loads of debt?

debtaghh

I pretty much know the answer to my question but was interested to see what others think. I have thousands of pounds worth of debt and we struggle. Should I allocate money for entertainment and holidays or should anything extra go towards debt? I have worked out that we should be debt free in 5 years time, so should we not go on holiday for another 5 years? should I not spend any money each month on any entertainment baring in mind that my situation will be like this for 5 years. Any ideas for free entertainment ( I already do tesco deals but am struggling to get more points as have really cut down on my food shop).

Any advice, tips appreciated. I love reading peoples' threads and ideas they are a real inspiration.

Thanks

RobertoMoir

It's one thing, an entirely sensible thing, not to book lavish holidays when you can't really afford them. It's another to try and go 5 years without some kind of break. You'll go mad! So I think there's nothing wrong with taking a break here and there.

As for doing things on the cheap, I don't have a lot of advice expect watch the online holiday websites for special offers.

aliasojo

If you'd asked me this a few years ago, I would have said no holiday and no costly entertainment, concentrate on paying off your debt.

However, doing that has seriously affected my family so much that we now don't speak to each other much, we are all constantly stressed and feel pretty negative towards everything. We're only human, even if you've happily decided to be 'nose to grindstone' at the start, things take their toll if they go on for too long. With no nice times or breaks from the humdrum and drudgery, you'll be drained of any positivity fairly quickly. I didn't appreciate this before, I didn't realise the effect it would have.

I think the debt should take precendence certainly, but I also now think you should build a small amount into your budget for enjoyment purposes. I wish now I'd done things differently.

MUM40

i'm also in the same position, we have just got short of 3K from a PPI claim, and wondering what to do.
a) pay some of our debt off
b) have a last minute holiday - struggling to find one with the 3K (3 Adults 2 kids (17/10)
c) save for a rainy day

we have put the 3K in our saving account to avoid temptation to spend

We did not have a family holiday last year, so we are desparate for a holiday, but not sure.
I know that only we can decide what to do, but advise from others would be help

Aspiration

My advice - Set yourself a reasonable payment plan e.g. By Jan 2011 you'll have 25% less debt, by June 2011 you'll have 35% less debt, if you stick tpo your timescales adn can afford a sensible holiday and your on track go for it! If your not on track with the timescales you've sent i would advise not. 5 Years is to long to go without a break, i'm sure others with give you great advice to get cheap hols.

Pollycat

MUM40 wrote: »

i'm also in the same position, we have just got short of 3K from a PPI claim, and wondering what to do.
a) pay some of our debt off
b) have a last minute holiday - struggling to find one with the 3K (3 Adults 2 kids (17/10)
c) save for a rainy day

we have put the 3K in our saving account to avoid temptation to spend

We did not have a family holiday last year, so we are desparate for a holiday, but not sure.
I know that only we can decide what to do, but advise from others would be help

Re your question 'pay off debt or save?' - it depends on what sort of debt you have.

Martin usually recommends that if you have debt but also have spare cash, you should pay off your debts rather than save - because the cost of debt is usually much higher than the profit from saving.
You'll probably be paying more interest on say credit card debt than you'll get back in interest on £3K.
Unless of course, the debt is on 0% interest.

If it's not credit card debt, you may have to pay a penalty for paying some or all of it off - you need to check that out.

I guess it also depends on what your 'debt-free date' is likely to be.
As RobertoMoir says, if you're not likely to be able to afford a holiday for years and years, then this unexpected money might just help you all feel better.

Good luck with making the decision on what to do with your 'windfall' - it's quite a nice dilemma to have, really.

Nottoobadyet

I'd say it really depends on you and the sort of holiday that you have in mind - a walking and camping holiday (or staying in bunkhouses) can be great fun and cheap as chips. If thats what keeps you sane, go for it.

If you are london based, I know of lots of great free entertainment, not so much outside of london though. If you are nearby to a major city there may be some websites and things that could help?

DVardysShadow

Plan to take the time together, whatever you do. Maybe some days out from home or a few days away. Discover the countryside. Budget for it, to have a good tiem and spend less than you would have done.

katsu

Try little things - say visiting friends, camping, very cheap one or two night breaks, day trips to museums, exhibitions etc. I don't know what the £9.50 Sun newspaper holidays are like but you could look at those sort of things too?

I'd allocate yourself a small budget for days out or treats to help you get through the 5 yrs, but it would not include £3k type holidays. I've mostly had camping weekends and the odd night away (and I mean odd night). DH and I have spent probably less than two weeks in hotels together in 10yrs - counting in overnight stays for weddings!

Depends how fast you want to be debt free. Being debt free I can tell you your money goes so much further as you no longer have the CC interest to pay, so when you spend say £150, that is all you spend, as it comes from your savings. You no longer pay about 18% p.a. on it for several years, as part of your overall CC debt. You can also save the money you used to pay in repayments, so can save up for a nice holiday.

Sagz_2

I think, in your position, I'd save for a holiday to have when all the debts were paid off, a reward for all the scrimping and saving you'd have done and a celebration of your new debt-free life.

BusPass_2

MUM40

Holiday with a budget of £1,500
Pay off debt by £1,500.


If you have 3 kids the value of a holiday both short term and long term cannot be overestimated. It might take some compromises but £1,500 will get you a good break. Ask the kids what they want to do. It might surprise you how humble their ambitions are.
A neighbour went on an £8,000 holiday to Florida last year and his 5 year old only wanted to go to a caravan and make sandcastles!

Throw £1,500 at your debts. No sense in saving when you are paying more interest on your debt than you would be getting in a savings account.