Tuesday, May 06, 2008

The Biggest Illusion

My BIL and SIL went with us to Dave Ramsey. They are considerably younger than us, so it’s exciting to see someone their age getting their arms around their finances.

However, a week prior to our DR event, they went to Hawaii for a week. I thought that was a little odd, since I don’t think Hawaii trips are on Dave’s “Get Out Of Debt” plan. But I kept quiet. None of my business.

On our way home from Kansas City my SIL said, “Boy am I glad we went to Hawaii BEFORE seeing Dave Ramsey!” They had defended the trip all along because they had paid cash for it. I knew better. After a few minutes, it dawned on her. “It’s all an illusion! That really wasn’t our money to spend!” Ding ding ding!

The argument, “but I paid cash for it” doesn’t mean squat if you have debt. All you did was choose not to pay the people you already owe money to so that you could do something stupid with the money…like to go Hawaii.

I believe this calls for a visual aid!

Now put yourself in Tom’s shoes. How would you react if you loaned someone money and instead of paying you back, they opted to buy more clothes or go on a fancy trip? Does that change your philosophy on debt?

Note to J&L - All in fun, of course! But I bet you won't be going on any more trips soon, eh?