1 in 3 Americans Take On Debt for Special Events — Here's How To Do It Responsibly

Americans are increasingly willing to put meaningful experiences ahead of financial progress. A recent SoFi survey found that nearly 1 in 3 Americans have taken on debt for an event, while a similar share have agreed to a trip, gift or celebration they couldn't comfortably afford.

These Americans often invest in these experiences for the "emotional ROI" — but is it worth the financial setback? Here's what experts say.

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Is Taking on Debt for an Event Ever Worth It?

The answer to whether debt is worth taking on for experiences isn't cut and dry.

"On paper, taking on debt for an event or experience is usually not ideal," said Brian Walsh, head of advice and planning at SoFi.

"But people’s financial journeys are not perfectly linear, and we are not robots. Some events — such as a close family wedding or milestone — can feel important enough to attend even when someone did not plan ahead [financially]."

Ideally, however, these expenses would be saved for in advance.

"If you do use debt, have a clear plan to repay it," continued Walsh. "Understand the interest cost and temporarily reduce other discretionary spending to make room for the payments. The goal is to participate without allowing one experience to create lasting financial damage."

Why Americans Are Choosing Experiences Over Financial Progress

The survey found that 72% of Americans (regardless of generation) are willing to sacrifice financial progress for meaningful moments, such as showing up for family and going on vacations. Many see creating these core memories as essential to emotional ROI.

"Emotional ROI is important, but it should not replace financial ROI," Walsh said. "You can have anything you want, but not everything you want, so the key is prioritizing what matters most and being honest about the tradeoffs."

He recommended making financial room for meaningful experiences by reducing spending in areas that matter less, while continuing to save and invest for the future.

"Long-term goals can feel far away, but compounding means time can be your greatest financial advantage — or a costly one to give up," Walsh said. "The goal is to enjoy the present without sacrificing the financial independence you want later."

How To Enjoy Life Without Sacrificing Long-Term Financial Goals

You don't have to sacrifice all fun in the present to set yourself up for financial success.

"Balancing life and finances starts with recognizing that the goal is not to eliminate enjoyment — it is to spend intentionally," Walsh said. "Prioritize the experiences that matter most, automate savings and debt payments and look for lower-cost ways to enjoy the things you value."

The foundation for making the right financial decisions is creating a budget.

"Track your spending and focus on the expenses that have the greatest impact, particularly housing and transportation, which are often much larger budget drivers than small daily purchases like coffee," Walsh said.

"Being intentional about those major costs can create more flexibility to enjoy life while still making progress toward savings, debt repayment and long-term goals."

How To Keep Experience-Related Debt From Getting Out of Control

As more Americans take on debt to fund experiences, it's important to have a plan to pay off the debt before it spirals.

"Know the total cost, interest rate and monthly payment, and make sure the payment fits comfortably within your budget," Walsh said.

"To prevent the debt from derailing longer-term goals, temporarily reduce lower-priority discretionary spending, continue making progress on emergency savings and retirement, and pay down high-interest debt as quickly as possible."

Know how much debt you will need to take on before you commit to an experience and make sure you can repay it, no matter how high the potential emotional ROI may be.

"If the payments require sacrificing essentials, missing other obligations or repeatedly borrowing to cover expenses," Walsh said, "the experience is creating too much financial pressure."

This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.