When you are young and of limited means, access to experiences can be few and far between — at least without debt.

But to some, experiences are so important that they’ll head off on vacation in spite of mounds of debt.

One of the underlying characteristics of the “You Only Live Once” (YOLO) philosophy is that you should enjoy yourself now, before it’s too late. What happens if you fritter away all your young and healthy years without truly living, only to find that your golden years are taken up by infirmity? All that money you scrimped to build a nest egg just goes to paying medical bills.

YOLO says that it’s ok to be comfortable carrying a certain amount of debt, as long as you are pursuing great life experiences and enjoying the lifestyle you want to live. In some cases, it’s even ok to incur more debt in order to travel the world — as long as you can handle the payments.

How YOLO Can Become Problematic for Your Finances



The main drawback to YOLO is that there seems to be an emphasis on using debt to fund the desired lifestyle.

Even if debt isn’t used to fund skydiving adventures or month-long treks to exotic locations, debt that you already have isn’t paid down very quickly. Instead, loaded down with student loans, and possibly credit card debt, you continue to spend your money on experiences, rather than using it to reduce your debt as quickly as possible.

This mindset is something I can relate to.

I prefer experiences, and I think that almost any price is worth paying for an enjoyable time. In fact, while I was in college, I took out student loans even though I didn’t need them. I also ran up credit card debt. There was absolutely no reason, with a scholarship and an on-campus job, for me to have debt as an undergrad. However, I liked road trips, and my penchant for frequent travels outstripped my income.

As a result, I spent years after I graduated repaying loans — with interest. Compound interest can be a difficult thing to overcome when it’s working against you.

Instead of building up my retirement fund, and using my financial resources to grow my net worth, I was repaying interest. I still have student loans from my time in undergrad. Student loans that I shouldn’t have taken in the first place.

While it can be fun to see the world, and live carefree, and not worry too much about the debt you have, at some point, you need to consider the future.

Are you prepared for financial setbacks? Will you be able to live comfortably in retirement?

I’m not saying that you can’t have fun now. But putting off some of it for later can help you really get a handle on your finances. Use your resources to accumulate real assets, rather than stretch out the high-interest consumer debt, and you could really live a few years down the road.

A Balanced Approach to YOLO

I understand the appeal of YOLO. As someone who enjoys travel, and good food, and relaxing with a book, I get the idea of living now, and enjoying your money while you are young enough to enjoy it. Especially when it comes to unique and interesting experiences.

My version of YOLO has changed over the years, though.

First of all, I make sure that the most important priorities in my life — the future, my son, the business of survival — are covered. For the rest of it, my husband and I spend on what we enjoy most. We’ve decided to cut out the things that aren’t important to us.

After all, you do only live once, so why spend money on things you don’t particularly want?

Also, we’re not too fussed about leaving our son a big inheritance. We’re teaching him to be responsible for his own finances, and to work at building his own assets.

Yes, we want to give him a good start. But we’re not planning on saving up a bunch of money that he can enjoy.

Nope. We’re going to enjoy it before we go.

What do you think of the YOLO philosophy? What does YOLO mean to you?