Ok, now I’ll break down and admit the horror of it all: I took a vacation before I had finished saving up for it. I will now proceed to burn in personal finance writer hell for all time for it….or maybe not.
You see the tricky thing about personal finance is knowing when you can push the rules out the window since they no longer matter that much to you. This isn’t to say that I don’t believe in saving up for things prior to buying them, but at the same time you don’t always have to practice delayed gratification.
In this particular case it had to do with the timing of it all. I could have easily saved up the money prior to going on the vacation, but I decided to push that off in order to buy some more RRSP prior to the end of 2010. I will of course pay off the remainder of my vacation when I get back within the month, so I’m not actually borrowing money to take the trip at all. I believe the context of a decision is often just as important as the decision itself.
Had I taken the trip without any money available to pay it off right afterward I would question why that particular trip is so important you have to borrow money for it. Your brother’s sudden wedding or perhaps a funeral might be a good reason to take a trip without paying for it in advance, yet you have to be careful on a slope like this. You see if you really think it is so important shouldn’t that qualify as an emergency situation and have you dip into your emergency fund? If so, go ahead and take a trip.
If not, then you are on the slippery slope where things can get out of hand if you go down that path too often. Hence the idea in the first place of saving up for most things in life prior to buying them (typically exceptions include a house, education or a vehicle).
In personal finance there really isn’t any ‘rule’ that can’t be broken under the right situation. Circumstances really do matter and your own view of the situation to determine if it will work for you.
So what personal fiance ‘rules’ have you broken? Why did it work for you?