I love Dave Ramsey. I love his Every Dollar app and use it religiously. I celebrate with those who pay off their debt, and we anticipate one day screaming “we are debt free!” He has wonderful advice, but we don’t always follow it. For one, according to our debt snowball* we will be debt free in 12 years. For two, we have kids. Let me outline why those two things matter.
Our time with our children is limited. Eventually, fortunately and unfortunately, they will be adults following their own dreams, buying their own houses, marrying and having kids. Where it stands today, our oldest would be almost 22 by the time we have reached debt freedom and our youngest 14. According to Dave, our goal “should be beans and rice” until we have our debt gone. This means: no eating out, no vacations, no nothing. With our debt to time ratio, my husband and I do not feel it is appropriate for us to skip out on some of these things until we are debt free. Specifically vacations with our kids.
Since we do want to take trips and enjoy this time with our children we follow a few simple rules:
- No new debt. We have TWELVE years before we are debt free…believe me that’s enough. To pay for our vacation we do not take on ANY new debt. Nothing is paid for on credit. We do not take out loans or borrow money. We firmly believe that “borrower is slave to the lender.” We’ve been the slave for many years, we don’t want to earn any more time in jail.
- Limit trips to every 2 year. We cannot afford a family trip every year. Having 5 kids can be expensive, one meal out alone ranges from a conservative $30 (McDonalds 20 piece chicken nugget meal shared) to $95 (Bubba Gump Shrimp at Mall of America including tip). As our kids age costs will only rise.
- Save monthly. My secret weapon to planning ahead is sinking funds.** Whether it’s a new tile system for our leaky basements, summer camp for our kids, or a family vacation I plan ahead by saving monthly. As a homeschooler, we would love to take our family to our nation’s capitol. That’s a big, long drive for our family so flying is wiser and using the cities public transportation. Taking that into account along with lodging, food, souvenirs, and other costs we anticipate it will cost $5000. Due to the current ages of our kids, we decided to make this trip in 5 years. Today, I started a sinking fund. This will be $38 pulled from our checking account bi-weekly. We are currently saving for a Colorado Springs, CO vacation next year and a WI Dells/Chicago vacation in 3.
- Be realistic. I would love to take my kids to Universal Studios and see the Harry Potter world. Or take them on a Disney Cruise. But I’ve done my research. A nice 5 day cruise at it’s cheapest would be $10,000 give or take plus airfare for our entire family. Entrance for 2 days into Universal is almost $1000. That isn’t even including anything else. We just can’t swing this financially so we have to be wise with our travel choices.
- Make a list. There are some places that we want to go as a family and we make that a priority. Both my husband and I love history, especially American history. We also enjoy nature. We’ve taken the kids to Mount Rushmore and our trip to CO includes a forage up Pike’s Peak. We will make a trip to Washington, D.C. a priority with side trips to Gettysburg and Mt. Vernon. Maybe a trip to Philadelphia to be inside the building where the Declaration of Independence was signed. These are our families priorities and we plan our vacations with that in mind. Is your family big Cubs fans? Do you want to see them play in 10 different stadiums? Maybe that is how you should plan your vacations. Do you love the beach, sun and surf? Your destinations might include all beaches. That is all for you to decide, but make a list of places you’d like to take your family.
- Remember your spouse. My dream trip is to Greece specifically via a Mediterranean cruise. My husband would like to visit Hawaii and Alaska. These things are not things we want as family vacations. These are things we will do as a couple only. Maybe not next year or even 5 years from now…but maybe when the kids teens or are grown. Maybe these are the trips when we retire or they are something we do on our anniversary. Either way these are trips that we dream about together and will plan for just between us. Make these plans too.
*debt snowball: a Dave Ramsey term whereby you pay off your smallest debt and roll that payment into your next smallest debt and so on and so on until all of your debt is paid. By adding these smaller payments to each other as you pay off debt you gain momentum and are able to pay debt off faster.
**sinking fund: this is a term I learned from Mary Hunt, another financial guru, whereby you “sink” money into an envelope system or other type of savings account. We personally use SmartyPig, which is an online savings account. It allows us to withdraw funds bi-weekly or monthly into separate fund goals. As I’ve mentioned. I have a fund set up to pay for our school costs, camp costs, vacations, basement repair and more. It is an easy way for us to save up for things and takes the pressure off of me for finding a place to put the cash. I highly recommend it!