Is living in the moment causing debt? Tips to curb ‘funflation’

Apr 11, 2024, 6:52 PM | Updated: Apr 12, 2024, 3:22 pm

Photo: People watch the sunrise, Tuesday, Nov. 23, 2021, in Miami Beach, Fla....

People watch the sunrise, Tuesday, Nov. 23, 2021, in Miami Beach, Fla. (Photo: Lynne Sladky, AP)

(Photo: Lynne Sladky, AP)

Just as Americans are getting into spring break and ready to revel in summer activities comes a warning about “funflation.” A Bankrate survey shows even the cost of having fun has increased as people go into debt to enjoy life.

Bankrate Senior Industry Analyst Ted Rossman said overall, prices have increased about 20% since the pandemic, but you are likely paying even more for discretionary items.

“Things like airline tickets, hotel rooms, concert tickets, dining out, I mean these are all things that have grown more rapidly than the overall price growth we’ve seen,” Rossman said.

But, Rossman insisted he’s not trying to be a killjoy.

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“I always try to be careful when I talk about this because I don’t want to tell people you can’t have any fun, but I do want to warn about the dangers of credit card debt,” he said.

Rossman said the average credit card interest rate is at a record high of 20.75%. Nationally, Americans owe $1.13 trillion on their credit cards.

“To put it in a little bit of context, that figure is up 47% from the beginning of 2021,” Rossman said.

Set aside money to fund your fun

Yes, there’s still some post-pandemic, pent-up demand. So, he suggested doing a few things to help fund your fun.

First, set up an entertainment fund by putting money aside every month.

“Things are going to come up. And it’s good things, right? You get invited to a wedding, or a concert, or a sports event or something. We want to be able to do these things, but we don’t want to put it on a credit card and finance that forever and ever,” he explained.

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Next, he said to tap into unused gift cards, airline miles or credit card reward points. But if you have a cash-back or rewards credit card, remember to pay it off every month.

“It doesn’t make sense to pay 20% in interest, just to get 1% or 2% or even 5% in cash back or airline miles,” Rossman explained.

He said the perks don’t make up for what you’re paying in interest.

Ursula says she’ll spend the money to travel

Ursula Reutin, host of “The Gee and Ursula Show” on KIRO Newsradio, said Rossman offered great advice, especially when it came to unused gift cards.

“I wanted to see what I have in my wallet. I have five gift cards that are unused,” Ursula shared. “And that is a great idea because I think a lot of you, if you look right now, there are probably things that you’ve just kind of forgotten you even have.”

Rossman also said 38% of Americans Bankrate talked to shared they were willing to go into debt to do something fun.

“I think just everything that transpired last year for me has made me think I need to do things when I am able physically to do things. And one of those things is to travel and take vacations. And I’m not going to wait until, you know five years down the road, or 10 years down the road to do these things that I want to do. Because no day is promised,” Ursula said.

That said, you don’t want to get so heavily in debt that it starts to really actually ruin your quality of life as well,” she continued.

Gee Scott, host of “The Gee and Ursula Show” on KIRO Newsradio also weighed in, revealing some past spending habits.

“No matter how broke I got Ursula, I always kept getting haircuts,” he said. “There’s always money for that.”

Gee added that the number of people risking debt for fun might even be higher than 38%.

Do you take on debt for concerts, shows, trips?

“I just think that so many people, maybe in my age group, don’t have as much expendable income,” KIRO Newsradio producer Paul Holden said. “If you see that once-in-a-lifetime opportunity, if there was a concert, show, trip and you really only had one shot, I think some people might say, ‘Hey, I’ll take the debt.’ And I’ll try to pay it off over the next couple of years because I might not be able to get another chance to see this artist or go on this trip with these friends to this location.”

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Ursula said she liked the idea of an entertainment fund. She shared that she recently purchased a book where on the first day, you put in $1, and on day 100, you put in $100 and eventually, you save $5,500.

Gee added that he once got so mad at his credit card, he put it in his dresser drawer.

“Yeah, don’t make it easy,” replied Ursula.

But Gee said it didn’t help because his card was linked to his accounts online.

“I can’t stop, I get another pair of shoes” he joked.

Heather Bosch is an award-winning anchor and reporter on KIRO Newsradio. You can read more of her stories here. Follow Heather on X, formerly known as Twitter, or email her here.

Julia Dallas is a content editor at MyNorthwest. You can read her stories here. Follow Julia on X, formerly known as Twitter, here and email her here.

Listen to Gee Scott and Ursula Reutin weekday mornings from 9 a.m.- noon on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.

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Is living in the moment causing debt? Tips to curb ‘funflation’