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As we know the Weasley family are quite poor. Not poor enough that they don't have anything to eat but still so poor that they have to buy second-hand clothes and books for their children.

Yet, when they win 700 galleons from the lottery they burn most of them on a trip to Egypt. While it must have been fun it seemed extremely unwise. Afterwards they are poor again - Ron has to wear a second hand and extremely old-fashioned robe on the Yule Ball.

So why did they spend so much money on a single trip?

vap78
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    As a parent myself, I would gladly blow a huge chunk of money on a fun trip that I would never otherwise afford than save it for normal use. Memories are among the greatest gifts one can give their kids. – Kyle Kanos Oct 12 '15 at 15:12
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    yep, a family trip for maybe the first time ever, or put it in the bank, the family trip wins for most families imo, as seem by most lottery winners use of the winnings (blow it all in a year or 2 – Himarm Oct 12 '15 at 15:13
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    because everyone always spends financial windfalls in the most logical and financially sound manners. it's why lottery winners always remain rich for the rest of their lives – phantom42 Oct 12 '15 at 15:50

  • yep, a family trip for maybe the first time ever, or put it in the bank, the family trip wins for most families imo This. I've seen articles analyzing this kind of behavior... in general, if someone is flat broke and has a windfall, they'll spend it "unwisely". After all, they can either, for once in their lives, go on a nice trip, or buy something nice, or what have you. Or, they can stick it in the bank and (assuming the bank or someone doesn't just take it to pay past debts), they'll have the same day-to-day drudgery and "nothing to show" for their windfall except a cash buffer (until some

     –  Oct 12 '15 at 21:59
  • how does this answer the question? – phantom42 Oct 12 '15 at 22:01
  • Maybe you should edit this answer to talk more clearly about reasons for choosing the former option over the latter: at the moment it sounds like you're just stating their possibilities, which doesn't answer the question. – Rand al'Thor Oct 12 '15 at 22:07
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    Ron's parents are frugal, not poor. That's how you can afford to take 7 people on a vacation with $3k. – Mazura Oct 12 '15 at 23:50
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    @phantom42 the referenced article is quite unconvincing. 1900 out of 35000 went bankrupt within 5 years. That's not too much - about 7%. Much more than 7% of the people are bad at planning their budget. – vap78 Oct 13 '15 at 08:59
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    They're playing the lottery. That's not exactly a sound investment to begin with. –  Oct 13 '15 at 11:41
  • Maybe it's just a symptom of why they are poor in the first place - the poor people I know (admittedly, a tiny sample) tend to blow any money they get pretty much immediately. Even if it means that they buy so much food half of it spoils before they get to eating it. The thinking might be "If I don't spend this right away on important stuff, I'll throw it away on stupid things I don't need later." – Luaan Oct 13 '15 at 12:23
  • I can't seem to reply to the previous poster, the button is greyed out. But, with regards to the galleon <> real money conversion: Word of god (aka JK Rowling) put the value of a galleon at around £5, "though the exchange rate varies". That's as good as anything to go on. That makes the value of the 700 galleon lottery winnings about £3500 (pounds, not dollars or euros). –  Oct 14 '15 at 15:15
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    The equivalent sum in pound sterling is irrelevant. We are talking about completely different economies here and the purchasing parity is unknown. Most probably the portkey to Egypt would be much cheaper compared to airplane tickets for 7 people. – vap78 Oct 14 '15 at 18:35
  • In addition to @DVK 's answer, the trip to Egypt was in keeping with Rowling's introduction of the Hand of Glory. During the Victorian Era it became fashionable for the rich to keep pieces of mummies on display in their parlors. – Organus Oct 14 '15 at 20:51

3 Answers3

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I haven't pulled citations for this from the books themselves, but per the wiki article on Bill Weasley:

After graduating from Hogwarts, Bill went to work for Gringotts Wizarding Bank as a Curse Breaker in Egypt. During the summer of 1993, the whole Weasley family went to Egypt on holiday after his father won seven-hundred galleons in the annual Daily Prophet Grand Prize Galleon Draw. Bill took his family on a tour of the Egyptian tombs while they were there.

It wasn't merely a vacation - they were visiting a member of the family. Given that he was working far from home, and he probably didn't see his parents and siblings very often, the family's choice of vacation in Egypt makes sense. After that time, we see Bill return to England on several occasions, but prior to his family's vacation he may not have come back as often. Even if he did visit home a few times a year, traveling to a foreign country where a friend or family member lives is a fine opportunity. Besides the benefit of Bill showing them around, he's got a prestigious job in an exotic location. The family would presumably feel pride and excitement at observing this firsthand.

recognizer
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    Remind me to bounty you if this doesn't get accepted. – Mazura Oct 12 '15 at 23:54
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    Excellent answer, the Weasley family are shown as strong and cohesive - even allowing for Percy's behaviour. Visiting Bill makes perfect sense. – Ian Lewis Oct 13 '15 at 13:28
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    +1 for providing a believable in-universe explanation as to why they would spend money on a vacation, and why they would choose Egypt specifically. The Weasleys are all about family. – YonkeyDonk64 Oct 13 '15 at 18:43
  • The explanation that they were visiting Bill + that maybe the cost went out of hand (my assumption) sounds plausible to me. – vap78 Oct 14 '15 at 14:40
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Actually, Weasleys did the most wise/rational thing, according to modern scientific understanding: they purchased a unique, wonderful experience instead of things.

Over the past decade, an abundance of psychology research has shown that experiences bring people more happiness than do possessions (src, including links to research)

Tip 1: Buy experiences instead of things ... In one recent study, Cornell University researchers found that purchasing an experience tended to improve well-being more than buying a possession, in part because people are more prone to comparisons and buyer’s remorse with material goods (src).

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DVK-on-Ahch-To
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    There's plenty more references where this came from, but this is SFF, not Skeptics.SE – DVK-on-Ahch-To Oct 12 '15 at 17:12
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    Can you really call that the "in universe" explanation though? I don't think there are any references to that idea. – David says Reinstate Monica Oct 12 '15 at 18:01
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    @DavidGrinberg - Fair point. However, not everything has (or sometimes needs) in-universe explanation. Why doesn't Ron fly up randomly? Because Gravity. – DVK-on-Ahch-To Oct 12 '15 at 18:03
  • But Ron randomly flying up is not a plot point in the story. Plot points (should) have a reason, and spending your lottery winnings on a trip is definitely a plot point – David says Reinstate Monica Oct 12 '15 at 18:06
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    @DavidGrinberg - actually, the fact that only Voldemort and Snape can fly (or that you need brooms to fly) is a major plot point. What with that silly Quidditch game – DVK-on-Ahch-To Oct 12 '15 at 18:09
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    @DavidGrinberg: it’s a normal enough thing that it doesn’t need a reason. The research is a modern justification, but “memorable experiences can be worth some cost ” has been thought and practiced since the dawn of humanity. It’s just something some people do (at the same time as other people would choose to do other things with the money). – PLL Oct 12 '15 at 18:16
  • This is my first thought as well, but I think it'd be fair to also include something about the Weasley's lifestyle: They make do! They may all get hand-me-downs, but overall they seem to be happy with their means (despite Ron's occasional grumps). To them, money isn't everything. –  Oct 12 '15 at 20:34
  • Thus showing their children that a one-time experience is more important than financial stability, and so the cycle perpetuates. – stannius Oct 12 '15 at 20:58
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    I’m convinced that you’re misapplying the research here. Financial stability is even more important than buying unique experience. The money (ideally) wouldn’t have gone towards trinkets but towards alleviating financial instability. There’s solid research that this yields vastly improved quality of life. – Konrad Rudolph Oct 12 '15 at 21:53
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    @KonradRudolph - they seem to be financially stable. Not rich, or even overly "dentist class" comfortable, but stable. They eat VERY well, they have a stable housing situation, they managed to pay to put 7 kids through school. They don't have money for luxuries, but that isn't a sign of lack of stability. – DVK-on-Ahch-To Oct 12 '15 at 21:54
  • @DVK Stability is of course relative. The old trope that “money doesn’t buy happiness” isn’t even true for the middle class (to which the Weasleys definitely don’t belong), it only applies to the already rich. The exact boundary is subject to discussion but unless you earn more than an amount X per year (where X is more than most people make), more income directly affects well-being. And the Weasleys are absolutely not financially stable, as diverse hand-downs attest. – Konrad Rudolph Oct 12 '15 at 21:58
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    @KonradRudolph But if you define financially stable as not using hand downs, then 700 Gallons won't give a very long period of stability, not with 5 kids needing new clothes all the time or even ball gowns. Who knows, maybe the Weasleys even have a sizable emergency fund and are just wise enough to not consider wanting new clothes an emergency. In that case, spending the money on the trip seems the best thing to do. – Sumyrda - remember Monica Oct 13 '15 at 04:53
  • @KonradRudolph : Managing money, like anything else, takes practice, and the poor never get the chance. For more on this, see http://www.cracked.com/blog/the-5-stupidest-habits-you-develop-growing-up-poor/ and http://www.cracked.com/blog/the-5-stupidest-habits-you-develop-growing-up-poor-part-2/ . Yes, they're all stupid and, no, no poor person ever gets enough practice not being poor to stop doing them. – Eric Towers Oct 13 '15 at 06:37
  • @EricTowers Sure. I’m just saying that we shouldn’t argue that spending the money instead of investing (even such a little) was the wisest course of action, because it’s patently not. It’s a realistic course of action, and it’s not actually a bad course of action. But making the very strong claim that it’s the wisest course of action is bold. – Konrad Rudolph Oct 13 '15 at 09:01
  • @DVK Skeptics.SE ... are you top user there as well yet? ;-) – Rand al'Thor Oct 13 '15 at 11:23
  • @EricTowers - sorry, BS. Anyone can manage fake money on a piece of paper and pencil. Total cost <$1. It's all about the will and work ethic and using one's brains. And managing normal money {{normal meaning simple money situation most poor people are in}} is a skill that involves about 1 hour of learning (1-sided ledger/checkbook). – DVK-on-Ahch-To Oct 13 '15 at 14:01
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    @KonradRudolph there are plenty of well off people who buy used cars and shop at thrift stores. Some people become rich living that way. The Weasley's situation is about to change, anyway - at the time of the trip, they've only got 3 more years supporting Fred & George, 5 more for Ron and 6 more for Ginny. I'd say, in light of that, a family trip may well be the wisest use of that money. Assuming they have no debt, the money that it takes to send a family on a trip won't make a realistic dent in their financial prospects. – Jason Oct 13 '15 at 18:08
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    Many of the people arguing against this answer also seem to assume that investing (or at least collecting interest on a savings account) is a given; are we certain these things exist in the Wizarding economy? Given Mr. Weasley's trouble with Muggle money, we certainly can't assume he could use Muggle means... – gatherer818 Oct 13 '15 at 19:05
  • @Jason Rich people doing that don't mind it though. The author makes it abundantly clear that Ron is suffering from it — not excessively, but tangibly. (Perceived) peer pressure is a powerful psychological agent for adolescents. – Konrad Rudolph Oct 13 '15 at 21:18
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    @DCK: Your theory is sound. However, overwhelming empirical evidence shows that that the theory is about as accurate as assuming rational economic actors in real economics. I suppose it's fortunate we're talking about a fantasy world, where fantasy theories might actually work. – Eric Towers Oct 14 '15 at 01:53
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To answer your question, let's first convert 700 Galleons into real money so we can get our heads around it a little better. Using this currency converter it seems that 700 galleons is about $3300. Figuring that you have at minimum 7 people going, it isn't hard to imagine that $3300 would be just enough to cover a somewhat lengthy vacation.

So then comes the question "why go on a vacation?" --

Look at it from what could be their perspective: what's more important, making the next couple years little more comfortable around the time that schoolbooks need to be purchased (at least in CoS, it appears that this was the yearly event they needed to save for, as it seemed to clear them out) or giving your kids an experience they'll remember for a lifetime? (Basically the same point Kyle made in the comments)

But all that being said, we aren't told exactly what else the money might have been spent on (the exception being Ron's new wand). Since I believe it was Ron who told Harry that most of the money was spent on the trip (not 100% sure, but I don't have my copy of PoA on me), it may be the case that there was still a bit of money left over, but it went into things Ron was either unaware of or couldn't appreciate at 13. As you pointed out, we just know that by the next year, Ron's dress robes had to be purchased second-hand, though as a counterpoint, I'd point you to OotP, where Ron was bought a new broom because he became a prefect (at least suggesting the Weasleys were able to save up something during the school year).

Out of universe, this is probably an example of the (warning: TV tropes link) Truth in Fiction trope where many people who, winning the lottery or coming into some sort of windfall (such as an inheritance) spend it all on trips or short term events (rather than saving it for the future). Just take a look at personal finance blogs or stack exchange site for examples of people asking for advice/telling of their experiences (or the news pieces that follow up on what happened to lottery winners).

malachi1990
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    what is beyond hogwarts basing their currency conversion rate on? – phantom42 Oct 12 '15 at 17:04
  • Don't know -- it was just the first one I found that worked (I tried another one, but according to Firefox, it was throwing out Javascript errors when I tried to run it). If you know of another one, I'll be happy to update my answer to include the numbers from that one. – malachi1990 Oct 12 '15 at 17:06
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    Maybe it is just me, but $3300 sounds like way too little for seven people to go away on any kind of lengthy vacation. Granted, considering how wizards get around the entire family could have stayed in their own beds each night and brought food from home each day, significantly reducing expenses. – Xantec Oct 12 '15 at 17:15
  • Scholastic Books, the publisher of the Harry Potter series in the United States, issued paperback copies of books that (they claim) Harry Potter used at Hogwarts. The price was listed as $5.99 US (14 Sickles 3 Knuts). That works out to almost exactly $6 per galleon, so $4200 for the Weasley's trip. Still tight. – Ethan Bolker Oct 12 '15 at 19:06
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    @Ethan It feels more correct to equate 14 Sickles 3 Knuts to be about 100 dollars because that is closer to the real price of a textbook. – Captain Man Oct 12 '15 at 20:11
  • I remember when I was young doing my own back-of-the-envelope calculations and coming up with 1 Galleon ~$50 (based on 1 Knut being about $.10) which seemed pretty reasonable. – smcg Oct 12 '15 at 21:48
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    I would think access to magical tents (small on the outside, huge on the inside) and portal keys could could cut significantly down the cost of the vacation. – Lenne Oct 13 '15 at 09:32
  • There are a few "points of reference", such as the paperback charity books released (Fantastic Beasts and Where to Find Them and Quidditch Through the Ages) which had dual prices, and a couple of mentions in the books of approximate values of items either in GSK or relative to muggle money. – Jon Story Oct 13 '15 at 10:25
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    I don't think that the money comparison is relevant. For example the travel cost would be much lower compared to muggle transportation. – vap78 Oct 13 '15 at 10:53