What would YOU do with it, and why?
So, my Hubby is nearing his one year anniversary at his job and with it, brings up the topic of vacation pay. He changed companies last year not only for better pay but also for better insurance. While overall it has proven to be a wise move, it wasn’t without a few drawbacks. He is away from home a lot more, which is a change neither of us likes. Once we get our debt paid off, he will likely move to a lower paying position within the same company that will get him home more often. Another drawback was the vacation pay for the first year isn’t all that great. Thankfully he will accumulate it at a significantly higher rate once he hits the one year mark.
What to do with the pay and time off that has been accumulated is where Hubby and I are slightly at odds. His company allows their employees to cash it out twice a year. I have been all over the board with what I think we should do, almost to the point of driving my Hubby crazy! I hate to admit it, but I’m one of those women who can beat a dead horse to death and then beat it again to make sure it is indeed dead!
Time off is important, probably even more so when a person is away from home as much as my Hubby is. For the record, I also have a small amount of vacation pay (24 hours or so), but I do not have the same option of cashing it out. Since as a part time employee my hours accumulate at a much slower pace, for now, we won’t use those hours. As for Hubby and his vacation pay, here are a few thoughts I’ve had:
- Keep saving it. If Hubby were to leave the company (for whatever reason), it would still be cashed out.
- Put it towards a used fishing boat fund. In my opinion, this was not a smart thing to think, let alone suggest. Despite the fact that we live on a lake, after quickly snapping back to reality, I don’t feel having a boat fund is a wise use of money while still in debt.
- Cash it out and throw it at our debt. After taxes, it isn’t a huge amount, but when you are digging out of debt, it all counts!
- As for time off, do what we did earlier this month. Hubs worked for an extended period and then lumped his days off together. Even though we didn’t leave the area, it felt like a vacation.
- Cash it out and use it towards a bigger financial cushion. I’ve always liked the idea of living on last months income.
After tossing around different ideas continuing to beat up the dead horse, I finally told Hubby I would bring up the question on my blog. As for what Hubby thinks we should do, I’m pretty sure that at one point or another, he agreed with all of my suggestions! Ha ha!
What have you done with vacation pay? Are there other options? What do you think we should do with it, and of equal importance, why?
Cash it out and put it towards debt. Living without consumer debt feels so wonderful, you cannot imagine.
We are also in our 50s. We carried debt for too long, but now the only debt we have is our mortgage. My husband has been out of work since January due to an injury and if we had debt, this would have ruined us.
Do everything you can to clear that consumer debt and never go back. You will feel a huge weight lifted off your shoulders.
Congrats on getting rid of your consumer debt! Sorry about your husband’s injury. I can’t even begin to imagine dealing with a job loss at this stage of the game. I am beyond eager to get rid of our debt once and for all. Even having eliminated what we have so far is a feeling of a huge weight being lifted. Thanks for your input!
We don’t get to cash our our vacation (PTO) time – it’s use it or lose it. We only get to accumulate like a week over our annual amount accrued. I’m not sure what I’d do if I could cash it out. I’d probably leave a bit of time as a cushion and cash the remaining balance out. I’d say since you are on a debt pay off mission AND hubby will be earning more hours that he can take down the road a bit, I’d cash it out and pay down your debt. The sooner your debt is paid off the sooner he can change his position and be at home more.
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To an extent, we are fortunate that his company allows vacation to be cashed out. The only downside is in deciding what to do with the option! Thanks for your input!
Wow! Your husband is lucky that his company pays the vacation days out! A boat does sound great since you live on a lake, but my first thought is for you to cash it out and throw it towards the debt. Maybe at the other payout, he could actually use that time as a vacation or then take that pay and put it towards your cushion. Thanks for blogging. Forgot to comment on the other post, but it’s nice to have a “place” to go to on your blog for encouragement and support!
This blog has been good for me, too. I like connecting with others who are either going through what we are or have already succeeded! You are right in that it doesn’t need to be an all or nothing approach. Thanks for your input!
If you take the payout and pay it toward debt, you will not only make the debt smaller, you will save the interest on the debt, too. How often would he really use the boat? How much would it cost to store or maintain or repair. I would not get the boat. If you pay off debt, you will not need as much to pay monthly bills. You could save some for a cushion and throw some toward debt.
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I think we would get some good use out of a boat given that when Hubby is home we use our kayaks all the time…weather permitting, of course! I personally can’t justify the luxury of owning one while we still have debt. Thanks for your input!
As a person who has owed two boats (one 17 ft motorboat and one 21 ft sailboat) I learned this from my boat ownership experiences: OWNING A BOAT IS THE QUICKEST ROUTE TO POVERTY! DON’T DO IT. RENT INSTEAD.
If it were me, I’d have my husband take the days off and stay home (staycation). I would not pay off the debt. I would put it in a savings account. Or a ROTH IRA and have the interest grow, compound tax free. Some banks are paying 2%+ by now on long term investments.
I would not pay off my debt. One of the quickest ways NOT to get out of debt is from using all your cash to pay down the debt and then when something happens, you don’t have the cash to get you out of it, thus you reach for the credit card. Duh.
Anyway, that’s what I would do.
Good luck. Have fun!
Many years ago we owned a 25 foot O’Day sailboat. We bought it very used as it was from the 70’s era. We were fortunate to use it heavily for several years (when Hubby had a local job) and then sold it for what we paid for it. Replacing the center board was by far our biggest expense with that boat as it had to put on a hoist at the marina. Boats in our area rent for close to $200/day. We are looking for an inexpensive used fishing boat. Nothing fancy with no bells or whistles.
Interesting perspective not to use it for paying down debt. We are keeping a cushion, but it isn’t near what I’d like it to be. Thanks for your suggestion as it gives us yet another point of view!
How wonderful he has a cash out option! That seems rare these days. I’d cash out and put towards debt, OR get a month ahead on bills. I also prefer the month ahead method, and it keeps me motivated for some reason. I would give a big, fat NO to a boat fund! 😉 Debt free and then a boat!
The boat fund is completely out of the question. While it was a fun 2-second fleeting thought, it wouldn’t be in the best interest of our financial future to have such a fund. Hubby is on his way home for a long weekend (two meetings he wanted to attend), and we will be discussing all these suggestions in length. Thanks for adding your thoughts!
Since I also have a hubby that works away from home, I say save the days to spend together. Other that a few days a year a I can fly home to see my family, my vacation time is spent on the days Chris is home. Sometimes it only a half day on Friday and Monday but it means a lot to both of us to have hat time together. You did enjoy the week you had together even though you stayed home…
I agree. Time spent together, no matter what we are doing, is always time well spent.
I agree with this.
Thanks, Chris!
If it were me, I’d do a combination. Take half and use it for actual time off work, even if he doesn’t go anywhere. Maybe this is just my current job situation speaking, but time for rest is just as important as any financial goal you could have. Then throw the other half at debt, or savings, or both! That way, the time off doesn’t feel “wasted” since you’re still getting a boost to your debt payoff, but the sacrifice isn’t too harsh, either.
We are thinking about Hubby working some extra days in August and then taking a few extra days off in the Fall. With our financially tighter months on the horizon, we will probably cash out his vacation pay and save it for a few months. Time off is important to help recharge! Thanks for your input.
I wish we had that option for I could use the cash right now, but then again, I would not be able to take the long vacation to go see my daughter and the grandchildren.
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It is a nice perk of the job. Almost like a built in savings.