I just went against the number one rule of getting out of debt:
Rule #1- Don’t get into any more debt
I know better, really I do. But what had happened was…
My sister is getting hitched way far away in jolly old England and though I have been scrimping and saving to try to make enough extra money by mystery shopping. Last year I wrote about how I was planning to save an extra $295 a month to save enough for the trip.
And then life happened. I moved to Louisiana and took a pay cut. I traveled to DC to visit family that I only see once a year and then we went back again for Christmas. Car repairs and new tires. My husband was hospitalized, I had a medical scare, and now we have a new crop of medical bills that we are working to pay off.
I worked at saving money, really I did. I saved $1000 and spent $250 on a plane ticket to see my sisters (a once a year occasion) and $100 to renew my passport (at least that was related to the trip). I kept telling myself that even though I fell short of my savings target each month that we would be able to catch up and that I had plenty of time. Then months later I checked plane ticket costs (ouch) and revised my budget, increasing my savings goal that I would continue to fall short of.
So with $650 in our savings account and watching the airfares steadily rise as we get closer to the summer travel season, we knew we needed to buy our tickets asap lest we pay ridiculously more. So we put all our hope on our tax refund which we estimate to be around $3500 based on the start we made on our taxes. But then we have to wait for all our tax forms to arrive in the mail. And we realized that we will then have to wait a few more weeks for the tax return to be processed and a refund sent to us.
So we bit the bullet and went for plan B:
Take out a vacation loan to buy our plane tickets now and get a decent price, then pay off the loan with our tax return.
I wanted to do it all myself and avoid any loans, but we had to face the music. Attending my sister’s wedding is non-negotiable, even if it is in a foreign country. I tried and failed. But that doesn’t mean I have to ask my folks for money or not have a plan to pay. The loan is part of our payment plan and is allowing us to purchase our tickets before the price skyrockets.
We got a good interest rate from the credit union and estimate that we will only pay a month’s worth of interest on the loan amount until we can get our refund. The idea of borrowing now and banking on the refund to pay it makes me nervous because it is unwise to borrow against future money since you cannot control what may happen in the future. We know we will not get the tax refund garnished so we should be receiving it. If by chance we get a much lower refund, we can still afford the monthly payment. We made sure of that before we borrowed the money.
So here I am, breaking all the rules. Yes, it makes me nervous and I hate adding the numbers into my budget, but I would gladly have some financial stress than miss the opportunity to spend time with my entire family and watch my little sister exchange vows with her beau. Family has no interest rate.
Have you ever taken out a loan for a major family trip or event?