I was speaking to a family member recently about their desire to attend a potentially once in a lifetime event. I was excited for them as they were excited about attending. Full disclosure, the event in question was a sporting event.
There was one minor problem. The expected cost to attend the event was in the neighborhood of $5,000. Money is relative, so while that may be too much for one person, it’s perfectly fine for someone else.
They didn’t have the money to afford the event. They fully planned on attending anyway. The source of funds to provide for this “once in a lifetime event” was going to be a credit card. I normally don’t mix family and money, though the person asked for my opinion on what they should do. Below is the reason for my “No.”
It Puts You in the Shackles of Debt
The biggest reason why it’s foolish to finance a once in a lifetime event is that it shackles you with unnecessary credit card debt. Very few things are worth shackling yourself to debt, especially a “once in a lifetime event” that arguably could happen again.
I realize “once in a lifetime” is a bit relative. That’s not the point. If you’re unable to afford it, then you need to let it pass you by, no matter how painful it may be to do so. Yes, it may be fun in the short run, but it can tie you to years of interest payments if you don’t know where the money will come from.
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If you need a bit of reality to that, check out this calculator to help determine just how much in interest and how long you’ll pay for that once in a lifetime experience.
It Can Become A Slippery Slope
I know my reasoning thus far seems harsh. It isn’t. It comes from experience rationalizing things or events as “must” haves to truly enjoy life. I rationalized taking vacations, to Vegas of all places, multiple times to have fun. The problem was I had no money to do such a thing, so the trips were financed by credit cards that took me years to pay off.
That being said, once you rationalize one thing, event or purchase it becomes that much easier to do it again in the future. Other events will become “once in a lifetime,” and you will view other things as must haves. That is a dangerous position to be in financially.
What About Emergencies?
This was the crux of our discussion. If this person decided to go to this sporting event, they’d have no financial ability to handle an emergency. While they do have a small emergency fund, it would be wiped out with something relatively inexpensive. That is also to not mention the fact that if a true emergency came up and their only option was to use a credit card, they’d be unable to because they would have already maxed out their credit cards funding their participation in this sporting event.
The fun of the event might be worth it at the moment though that event can’t help pay for a car repair or something in your house being fixed. While it’s not necessarily as fun to follow your team from a distance or even from your own living room on TV, it’s far better than struggling to take care of an emergency.
Turn it on its Side
This is where I was able to bring hope to my family member. Life is meant to be enjoyed. That doesn’t mean it can’t be done in a financially wise way. An opportunity fund is a perfect way to do this. An opportunity fund is an account you put money into for those special events that you don’t want to miss.
Having an opportunity fund enables you to seriously consider an event without going broke or going into debt as a result. You can enjoy the opportunity guilt free while also looking for cheaper ways to enjoy that opportunity, depending on when and where it is. There will also be times you’ll need to pass on things, but at least it’s done so knowing it’s for the best financially.
We all have things in life we enjoy. That’s perfectly normal. Be careful not to justify debt to experience those things.