Some college friends and I have been planning a vacation with just-us-girls (~$1,000 per person) for 2009. After all, who knows if we’ll be able to do something similar in the future?
But the worsening economy and job market, combined with doubts about my own job security, made me hesitant to spend a substantial sum on a luxury item – a vacation. (By hesitant, I mean, a tiny voice inside my head is yelling “it’s ridiculous to spend $1K on fun when none of your peers who have been laid off can find a job!”
On the other hand, I really want to go. I have saved up a healthy emergency fund. I don’t spend extravagantly. I’m only young once. Who knows how long before my friends and I are tied to family, children, graduate school, or other financial obligations? But maybe, all these reasons are just excuses for being dishonest about my financial situation.
Suze Orman has a show where she answers viewer’s questions on “can I afford a vacation (or any other expense)?” Most of the time, she says NO. That’s what I think she’d say if I ask her about the vacation.
I remember reading one of her books (forgot which one… she has so many!) where she highlights the perils of “financial dishonesty.” Basically, the story goes:
Joe X is laid off. He had already put a hefty deposit on an island vacation with his buddies. Instead of acknowledging his new financial reality (i.e. no job, no income) and forfeiting his deposit, Joe decided to go on vacation anyway by using his credit card.
When he came back, he found that a prospective employer had called him for an interview and that his house was flooded. If he had stayed home, he would’ve known about the interview and perhaps gotten a new job, and he would’ve noticed the water leak and prevented it from becoming a flood that destroyed his house.
Suze’s conclusion? Joe going on a vacation that he couldn’t afford = financial dishonesty = increased debt + continued unemployment + water-damaged home.
Obviously, Suze Orman is of the Financial-Karma-Takes-No-Prisoners school of thought.
I really would prefer not to end up like Joe X. So, though it pains me, the girls’ vacation of 2009 will have to be downgraded. Instead of a $1,000/person on a cruise or Mexico, maybe we will settle for a $300/person long weekend in Vegas.