If you are looking for tax related advice on the internet, you may come across multiple ways of cutting down taxes. There are ways of reducing taxes based on both tax credits as well as tax deductions and can help you a lot in keeping your taxes to a minimum. However, you should know what each of the terms mean and which is better than the other. In one line, we can say that a Tax credit is better than a Tax deduction.

What Are Tax Credits And Tax Deductions?

Tax Deductions, as well as Tax Credits, can help you lower your taxes. However, both Tax Credits and Tax Deductions work in different ways. Deductions can help you to lose your taxable income whereas tax credits can lower your tax liabilities. To take an example, we can say that if you have a tax bracket of twenty-five percent and if you reduce your taxable income by a hundred dollars (through tax deductions) then you will save twenty-five dollars in taxes. On the other hand, if you have a hundred dollars worth of tax credit then you are going to save a hundred dollars in taxes. This means that tax credits can help you save you the amount of tax that they are worth.

Now we are going to discuss in detail about tax credits and tax deductions and how they can help you to reduce your tax bill.

Tax Deductions

Essentially expressed, income tax deductions lessen the measure of your pay which contributes towards taxes. For the most part, there are two different ways to guarantee tax deductions: Take the Standard Deduction or Itemized Deductions. You can’t do both.

The Standard Deduction

The standard deduction fundamentally is a no-questions-asked decrease in your Adjusted Gross Income. The sum you fit the bill for relies upon your tax filing status. Individuals over age 65 or who are visually impaired get a greater standard deduction.

Itemized Deductions

Itemized deductions give you a chance to cut your taxable salary by taking any of the several accessible tax deductions you meet all requirements for. The more you can deduct, the less you’ll settle in regulatory expenses.

Would It Be A Good Idea For You To Go For Itemized Or Take The Standard Deduction?

This is what the decision comes down to: If it’s the case that your standard deduction is not exactly the total of your Itemized deductions, you most likely ought to separate and set aside extra cash. Be careful, in any case, that separating normally takes additional time, and you’ll need verification that you’re qualified for the deductions.

In the case that your standard deduction is more than the whole of your Itemized deductions, it may be justified, despite all the trouble to take the standard deduction (and the procedure is quicker).

Your tax counselor can go through your finances and consider any of the two approaches to see which technique creates a lower tax bill.

Tax Credit

A tax credit is a dollar-for-dollar decrease of the tax you owe to the government. For instance, in the event that you owe a grand in government taxes however are qualified for a thousand dollar tax credit, even if the net tax that you have to pay drops to zero dollars. A few credits, for example, the earned pay credit, are refundable, which implies that regardless you get everything of the credit even if your credit is more than the whole of your taxes you owe to the government.

There is a variety of tax credits accessible to a wide range of taxpayers covering a wide scope of costs and circumstances. As impetus for taxpayers to ensure the earth, the national government offers a credit for the expense of buying sun based boards for use in your home.

If your family is looking to adopt a child, the government has passed a federal adoption bill that can help you to claim tax credits which can help in raising the adopted child. Some other tax credits that you can claim are tax credits for education as well as the expense of dependent care for a child.

Due to banks increasing the fees they charge to their customers and also some of the regulation of the banks that are uncertain to the public, many people are increasingly turning towards Credit Unions for keeping their hard earned money safe.

If you are someone who is looking for saving your money somewhere, it is important to know the difference between credit unions and banks and which is the better option that can complement your financial requirements better. Even though most of the laws which regulate the operations of Banks as well as credit unions which cover areas such as home mortgages, student loans, etc. are the same, you can get a completely different experience with both, credit unions and banks depending on your financial requirements.

What Is The Difference Between Credit Unions And Banks?

The main differences between Banks as well as Credit Unions can be quite overwhelming for people even the people who are financially well versed.

Most importantly banks are revenue driven establishments, while credit associations are non-benefit. Credit associations normally offer better client administration and lower expenses, however, credit unions have higher loan costs. Unexpectedly, banks, for the most part, have brought down loan costs and higher charges. Banks, then again, frequently have higher expenses yet offer more comfort to the customers with respect to the location of the banks, more technological access, mobile apps, and rewards programs.

As indicated in a report by the Credit Union National Association (abbreviated as CUNA), credit union associations in New York gave normal money related advantages proportional to $85 per person and $178 per family unit in a year finishing March of 2018.

Profit Vs Non-Profit Organisation

In spite of the features provided by most of the extensive banks, credit associations, for the most part, exceed expectations in client benefit due to them being not for profit organizations. Some of the smaller sized banks brag similar client administration to most credit associations, particularly in small cities and networks.

Both the banks and credit associations give about the same facilities for clients, for example, checking as well as savings accounts, and business accounts. The main concern here is that regardless of a few disparities, the administration and services you will get from either a bank or credit association is genuinely comparable.

Personalized Services As Opposed To More Services

As a major aspect of a network, credit unions regularly get more-customized administration than what enormous banks offer. For instance, credit associations might be all the more ready to grant mortgages and loans for their individuals, and they may give monetary training as well as conduct outreach programs.

Since individuals must share a bond, credit associations are regularly smaller sizer than big national banks, and therefore they will most likely be unable to offer the same number of services that the large national banks offer. For instance, not all credit associations offer loans for business purposes.

Their little size may likewise restrain the number of credit union branches each credit union has in different cities, however, a great many credit associations have now consolidated to give shared branch benefits and shared ATMs so individuals can work together at credit associations anywhere throughout the nation as though they were at a home branch.

Should You Go For Credit Unions Or Banks?

While the advantages of credit associations appear to make these not for profit organizations quite different from profit-making banks, at last, you should make a decision to choose any of the individual banks and credit associations based on a decision of all the merits that each of them provides. Some substantial national credit associations may give less-customized administration than littler banks confined to a smaller community, while other credit associations might be so little they don’t offer essential current administrations, similar to versatile keeping money.

To choose where to keep up your hard earned money, consider what’s essential to you and cautiously look at the contrast between credit association and bank administrations. Compare them based on your expenses, least store prerequisites, everyday balance necessities, interest paid for holding a bank account and the interest paid for loans, and the individual establishment’s reputation.

Nowadays, some tax preparation softwares are making it easier for taxpayers to file their yearly tax returns. They allow taxpayers to make no mistakes while filing for tax returns. However, even if you make a slight mistake in filling information regarding your tax returns on your computer, it could cost you in getting no refunds and upon that can make your taxes even higher!

If you make a mistake in your tax return filing, it can result in increasing the amount of tax you have to pay or else can delay your tax refunds. Even if it is a paper form, it can cost you a delay in sending your tax refunds which can be devastating for some people. To prevent this, this article presents you with some of the most common mistakes that people make during tax filing so that you could be extra careful with that stuff.

You should refer to this article every year before April 18th (which is the deadline for filing tax returns in the United States of America) to make sure that you haven’t committed any mistakes while filing for tax returns which can delay the process and can even cost you.

Mathematical Miscalculations

The most widely recognized blunders that people make on their tax return forms, after a seemingly endless amount of time, is awful math. Oversights in doing addition or in exchanging figures starting with one calendar then onto the next will get you a notice stating you to do a prompt revision. Math botches additionally can decrease your refund in taxes or result in you in paying more amount in taxes than you initially thought.

Utilizing a tax accounting system in your computer to document your tax returns can help lessen mathematical mistakes. The implicit features in the tax softwares take the necessary steps for you, including, subtracting and embeddings numbers on extra forms as required. However, despite everything you need to ensure your underlying numbers are right. Entering $3,500 when the genuine figure is $5,300 has a great deal of assessment effect. Getting the numbers right is urgent on the grounds that you can make sure the IRS will be twofold checking numerical entries against its duplicates of your tax statements which include your W-2 tax forms, 1099 Income tax forms and so forth.

At the point when tax analysts discover an inconsistency, they’ll unquestionably tell you and, by and large, will address your slip-up and refigure your charges for you. Try not to give them the shot. Ensure your mathematical entries in your tax returns forms are correct.

Computation Mistakes

These are very similar to the standard math botches. In these calculation cases, citizens or their assessment professionals commit errors in figuring such expense form passages as assessable pay, retaining and evaluated duty installments.

Credits and uncommon findings additionally present issues. Blunders normally appear, says the IRS, in figuring the earned salary credit, the assessable measure of Social Security benefits or in computing the bigger standard derivation for citizens who are age 65 or more seasoned or visually impaired. A typical association in these blunders is included worksheets or structures before the sums are exchanged to the citizen’s Form 1040.

Incorrectly Spelled Names

The tax agencies are all about numbers, however words — explicitly names — are essential, as well. At the point when the names of a citizen, his or her mate or their youngsters don’t coordinate the number required for tax identification that the Social Security Administration of the United States of America, or SSA, has on record, that distinction will make the tax agencies kick out or back off preparing of the assessment form.

This frequently is an issue for new spouses. Numerous ladies change their surnames when they wed. That is likewise a possibility for mates in same-sex relational unions, which the IRS presently perceives legally. On the off chance that you didn’t send a notice to the SSA of your name change not long after your wedding, do as such currently to guarantee that your new name won’t cause an issue when you document your first joint government form for tax refunds.

These are some of the common tax filing mistakes that are done by the taxpaying citizens when they file for tax returns. You should make it a point to look for these kinds of mistakes in your tax returns forms to avoid any unnecessary delay in your tax refunds or an increase in tax payments.

It is safe to say that you are under the burden of paying off debtors and don’t realize how you’re regularly going to pay it off? You’re not the only one. As indicated by an examination conducted in the year 2016, it is proved that the normal U.S. family unit has around $17,000 in their credit card debt. In case you’re searching for some simple approaches to reduce your debt, we are here to help you out with some steps to be followed to pay off your debt.

1. Make A Financial Plan

The initial step to taking care of your debt issue is to set up a financial plan. You can utilize individual finance instruments like Mint.com, or create your own Excel spreadsheet that consists of your month to month salary and costs. At that point, examine those spending classifications to see where you can cut expenses.

2.  Clear The Most Costly Debt First

Sort your credit card loan costs from most astounding to least, at that point handle the card with the highest rate first. By clearing off the offset with the highest premium first, you increment your installment on the credit card with the most elevated yearly rate while proceeding to make the minimum installment on whatever remains of your credit cards.

3. Stop Your Credit Card Spending

Do u want to stop acquiring your debt? Tale down all credit cards from your wallet, and keep them at home when you go out to shop. Regardless of whether you win money back or different prizes with credit card buys, quit going through with your credit cards until you have your accounts leveled out.

4. Erase Credit Card Data From Online Stores

On the off chance that you complete a various number of web-based shopping at one retailer, you may have put away your credit card data on the web page to make the checkout procedure easier. Yet, that additionally makes it quite easy to change things you needn’t bother with. So erase that data. In case you’re paying for a common administration, utilize a credit card issued from a noteworthy credit card benefit connected to your checking account.

5. Sell Undesirable Presents And Family Things

Have any birthday presents or old wedding presents gathering dust in your storeroom? Have a look through your home, and search for things you can sell on eBay or Craigslist. Do some exploration to ensure you list these things at a reasonable and sensible value. Take quality photographs, and compose an eye-catching feature and give a complete description to sell the thing as fast as could be allowed.” Any benefits from deals ought to go toward your debt.

6. Put Work Rewards Toward Debt

On the off chance that you get a job bonus around the occasions or amid the year, dispense that cash toward your debt payoff plan. Maintain a strategic distance from the compulsion to spend that reward on a holiday or other luxury products. It’s more essential to fix your money related circumstance than possess the most recent designer pack.

7. Reward Yourself When You Achieve Achievements

You won’t square away your debt any quicker on the off chance that you see it as a type of your punishment. So compensate yourself when you achieve debt result objectives. The best way to totally satisfy your credit card debt is to keep at it, and to do that, you should keep yourself roused. For instance, rather than a weeklong holiday, plan an end of the week outdoors trip. In the event that you intend to lessen your credit card debt from $20,000 to $10,000 in two months, give yourself in excess of a congratulatory gesture when you do it.


These are some ways you can work towards paying off your debt in no time. You should always be tracking the amount of money you are saving and be careful to not use the saved money in other chores. To do this, you can maintain a savings diary or you can use a savings app which can keep track of all the money you have earned using the methods mentioned above. Also, be sure to aim to save money more than the minimum balance required by the loan or the credit card you are saving your money for.

Payday loans, as the name would suggest, provide short-term cash of between $100 and $1500, and the most popular loan amount is 500 dollars. The loans, which are available 24/7/365 online, are paid out very fast. The application process is equally very easy, perhaps because of the fact that getting approved doesn’t require any credit checks done on you. What this means is that even people with poor credit can still qualify for payday loans. Cash is released easily and quickly immediately after approval, sometimes even within an hour of application and approval. What this means, therefore, is that you can be able to sort your emergency situation within 24hours.

How To Apply For A Payday Loan

Online payday loans can be used for whatever needs you might have. All you do is to simply fill your application form online at the website of the payday loans provider, check your email for the confirmation message to arrive and then you have to wait for the money to arrive. These loans are important for people who need to borrow money at short notice. The good news is that there are several options that you can use to get the money, and lenders out there in the market will always endeavor to ensure the money is availed to your checking account as soon as all paperwork is complete.

Having to wait until your next payday can seem like an eternity, particularly if you have an emergency that needs money very fast, and you have no channel to get money. Whether you are self-employed or employed full-time or part-time, you qualify to apply for a payday loan and get a cash advance. Legal and reliable online payday advance services mean you will never have to wait in agony and suffer in silence in the middle of the month when salary account is dry.

Reliable loan matching centers understand that people need money quickly, hence the simplified application form that can take as little as 2 minutes to be completed. Upon submitting your details, you will be informed via mail within seconds whether you have been approved or not so that. Rest assured that you can have the money you need in your account when you need it.

Things Required To Get A Payday Loan

Each of the buyers that need to get a payday credit should have an open financial balance in moderately great standing, should have a job with a guaranteed steady rate of income, and a government ID. Banks don’t lead a full credit check or make inquiries to decide whether a borrower can stand to reimburse the advance. Since credits are made dependent on the moneylender’s capacity to gather, not the borrower’s capacity to reimburse while meeting other day-to-day expenses, payday loans can cause some people to be in a debt trap.

How Do Payday Loans Work?

To apply for a Payday Loan, borrowers compose an individual check for the sum obtained in addition to the back charge and get money. Now and again, borrowers sign over electronic access to their financial balances to get and reimburse payday loans.

Banks hold the checks until the borrower’s next payday when credits and the back charge must be paid in one singular amount. To pay a credit, borrowers can recover the check by paying the advance with money, enable the check to be stored at the bank, or simply pay the fund charge to roll the advance over for another payroll interval. Some payday moneylenders additionally offer longer-term payday loans advances and demand approval to electronically pull back different installments from the borrower’s ledger, ordinarily due on each compensation date.

Payday loans extend in size from a hundred to a thousand dollars and are also different according to different states as many states have a cap on the maximum amount of money that payday loan lenders can lend to the borrowers. The normal credit term is around about fourteen days. Advances commonly cost an annual percentage rate (abbreviated as APR) of four hundred percent or more. The back charge ranges from $15 to $30 to get $100.

For fourteen day credits, these back charges result in financing costs from 390 to 780% APR. Shorter-term credits have much higher annual percentage rates. Rates are higher in states that don’t have a limit on the maximum amount of money that payday loan lenders can lend to the borrowers.

Maybe you’re a parent intent on helping your new driver purchase their first vehicle or a grandparent eager to see a grandchild sign on the dotted line of their first mortgage – either way, co-signing a loan goes far beyond the warm and fuzzy feeling you might get by lending a hand.

Signing your name doesn’t just mean you’re acting as a character witness to the party in question, it means you recognize your financial liability should things go south. While sometimes this arrangement works for both parties, sometimes it can tear the co-signer’s finances to shreds.

So before you give in to the pleads of the loan-seeker, make sure you know what you are getting yourself into.

Here are a few of the financial implications of becoming a co-signer.

You Assume All Liability As A Co-Signer

Unfortunately, credit reports don’t distinguish between payments you failed to make on time and late payments made on an account you simply co-signed on. So if you’ve been diligent about keeping your payment history squeaky-clean, co-signing could tarnish your stellar reputation.

In addition, if payments on the account should cease for whatever reason, you are not only liable for the remaining balance, but your credit could plummet in the process. According to the Federal Trade Commission
, the creditor has all rights to try to collect the debt from you even before the borrower, and they can use all methods available to them – suing you, garnishing your wages, etc.

Once you’ve co-signed a loan, the creditor and future lenders see that debt as your obligation – regardless of who is reaping the benefits from the loan in the first place.

You likely won’t find out about important account changes until it’s too late.

Most co-signed loan contracts don’t include anything that states a co-signer must be notified when changes are made to a loan or if payments are missed.

Say for instance you agree to co-sign on a credit card with a set credit limit. The bank could then decide down the road to significantly increase the credit limit – without notifying you, the co-signer – and suddenly you could find yourself on the hook for far more than you originally agreed to.

If the primary borrower finds themselves in a bind and completely misses three month’s worth of payments in a row, you might not even find out about the situation until you begin receiving collection calls and notice a drastic drop in your credit score. By then, it could be quite a challenge to get the account back to good standing without draining your own accounts in the process.

You may not be able to take out more credit on your own behalf.

Credit taken out on someone else’s behalf is still seen as available credit to you, the co-signer. Therefore, your credit utilization
(the amount of credit you’ve used versus what is available to you) could reflect a change if the type of credit you’ve co-signed on is considered revolving — like a credit card.

If the borrower keeps a high balance on the credit card, your credit utilization ratio could be considered high, impacting your credit score and how you look to a lender should you need to acquire a loan or credit card for yourself.

Again, there is no distinction made between the credit card habits you adhere to for those you are the primary user on and those that simply carry your name as the co-signer.

You can’t simply take your name off of a loan should the agreement go bad.

If the relationship between you and the primary borrower suddenly takes a turn for the worse, or they begin defaulting on payments, you can’t simply ask to be removed as the co-signer. This is precisely the reason banks agree to a loan – because they have a back-up plan in place should the borrower not be reliable.

There are a few ways that you can be removed from a co-signed loan, but most, if not all, require joint buy-in by the borrower – something that could be tricky if your relationship is no longer in good standing. These options include paying off the balance of the loan or refinancing the original loan (the borrower’s credit will have to be in better standing at this point).

Regardless of the way you go about it, it’s generally not easy or financially painless.

Is there any upside to co-signing a loan?

Perhaps the only upside to co-signing a loan is the potential to increase your credit score – if the borrower manages to make all payments in full and on time.

Knowing the risks involved, if you’re still committed to being a co-signer, make sure the borrower is fully prepared and financially able to take on the responsibility of the loan or credit card. On the flip side, it’s also good for you to be financially prepared to take on the payments should things not go as expected.

Financial planning helps you to determine your short term and long term financial goals to create a balanced plan to meet the goals. In order to create wealth, you need to create a perfect financial plan that is fueled by goals. To have a better understanding of how things works, you can also consult a financial advisor who can save you a lot of money.

In Canada, the second largest province is Ontario which is home to the majority of the population in the country. Being the largest province, it is also the largest economy in the country. However it was not spared the latest global economic crisis. The growing insolvency issues is become a major concern in the capital city of the province. Many law firms now dealing with bankruptcy are offering their services to assist people facing the challenges of financial crisis.

Running bankrupt can result from many things. It may be the loss of a job, medical bills, divorce and other cases that cause loss of money and you may not be able to comfortably settle your debts. When faced with such a situation and you are not able to put away all the creditors showing at your door claiming for their money, you can decide to file an insolvency case. If the firm you choose will display competence then you can get your self some precious time to reconstruct and settle your debts comfortably.

The insolvency issue is becoming very common with the residents of Toronto. The attorneys dealing with cases of bankruptcy are on the increase. The area is reputable for its cultural diversity owing to the all the immigrants it holds. The immigrants are the most affected people since they face constraints before they can finally adapt to the financial manners of the area. There are some private businesses that are affected too.

Law firms that are currently handling bankruptcy are ready to do some assistance to many of the citizens facing insolvency. With the consideration that many citizens are facing different versions of the situation, the cases are different. For instance, you will get some individuals facing the hardship for a short period after which they can reconstruct their finances.

There are many other regions of Ontario, which are severely affected by the global economical crisis. This has also caused a rise in bankruptcy issues. The law firms operating in this area are doing a valuable job for people who are facing this crisis. The attorneys are also helping clients to restructure their budgets and adopting sound money management practices. Remember, poor financial management is the major cause of insolvency.

The financial catastrophe has also reached the York Region. Attorneys dealing with bankruptcy are giving a lot of hope to better cope with the situation. Other than personal insolvency, there are even businesses, which are affected and showing signs of insolvency. Therefore, the problem is also having a huge negative impact on the economy of the particular region.

Even smaller geographic regions such as Georgetown of Ontario, are experiencing the bad consequences of insolvency. The area is close to a river known as Credit River but interestingly the people around are suffering from financial burdens. Bankruptcy has resulted in many citizens in the area facing foreclosures.

It is important that you face the truth since most people suffering signs of this type of crisis wait too long to admit and make the situation worse. It is always useful to get a better control of your expenses. You need to have a good idea of your net income and the expenses. This will help you to cut down on unnecessary expenses and avoid insolvency. However, to better deal with Bankruptcy in situations where insolvency is unavoidable, you should look for expert legal counsel.

When you find yourself in need of some serious credit repair you have a few options. You can continue in your bad habits, try some do-it-yourself tricks, or you can hire a credit repair company to help you out. Clearly the first option should be thrown out the window. The sooner you get your problem solved, the sooner life will be easier for you. Next you can take steps to repair your credit yourself. While this is an excellent option and you can do everything that a credit repair company can do, you will probably struggle with things like time management and organization. So that leaves us to the third option: have a credit repair company do the work for you. But what can credit repair companies do for you? If you can do everything that a credit repair company can do by yourself, then why would you opt out to pay to have it done?

Before we talk about what a credit repair company can do for you, let’s talk about what a credit repair company has to do for you. The CROA, enforced by the Federal Trade Commission, requires credit repair companies to explain the following:

Your legal rights in a written contract that also details the services they’ll perform, Your three day right to cancel without any charge, How long it will take to get results, The total cost you will pay and Any guarantees

As you shop around for credit repair companies, make sure that these items are all in order; doing so will help you make sure that you are not victim to credit repair fraud or scams.

Having Someone Do For You What You Can Do For Yourself

In credit repair shopping, you will find a lot of criticism against credit repair companies, most of which is based on the premise that you can do everything that a credit repair company will do by yourself at little to no cost. The truth is, that statement is absolutely true. No reputable credit repair company will deny that or lead you to believe that you can’t do everything yourself. So if that’s the case, then why on earth would you pay a company like Lexington Law or Sky Blue Credit to do it for you?

In response to that question, think of any other service you purchase. You can learn to change the oil in your car, make your own food, or sew your own clothes. The reason that you purchase credit repair services is because you want an expert to do it for you. Having a credit repair company work their magic for you can give you comfort in knowing that the process is being done right and as time-efficient as possible. Your time is also extremely valuable; paying a credit repair company will save you time from not only the actual process, but from the studying and learning that is required to ensure accuracy through the whole way.

What A Credit Repair Company Can Do

Credit repair companies take you through the entire credit repair process, from start to finish. During their time that they work with you, they will ensure that everything they do is stuff you want done. For example, when you first start, the credit repair company will go through your credit report with you. As they do, they will ask you which entries you would like disputed and removed. By asking you instead of telling you what you want removed, the credit repair company can gauge where you are and how they can best help you in the credit repair process.

Once your credit repair company has figured out what you would like done, they then proceed to begin the repair process. They will draft up dispute letters for all the entries you want to dispute and will send them out for you. They will keep track of the status of each letter and will even send in second and third dispute letters to get things removed. A major benefit of having a credit repair company do this for you is that they will be able to keep track of when each letter was sent and when responses are legally required. Their entire focus is to get you the results that you want because in many cases, if you don’t get results, then they don’t get paid. Having that extra incentive of getting paid motivates the credit repair companies into doing everything they can to get you the results you want.

Beyond sending dispute letters, credit repair companies also work a lot with your various creditors and financial institutions. They also use methods like goodwill interventions and debt validation. Credit repair companies have often built relationships with different creditors (even yours) and will be able to negotiate a better deal than you would yourself.

Overall, opting out to have a credit repair company do the work for you will be to your benefit. They have regulations that they must follow and that you can check up on. Most importantly, they will save you time from studying and research and will do all of the grunt work for you so that you have one less thing to worry about in your busy life. Though you can do everything yourself, don’t discard the idea of going with a credit repair company too quickly. They may just be the perfect fit for what you are looking for.

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.

The Problem?

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.

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.