There was some sort of major sporting event last night that a lot of people were watching on TV. Since my husband and I were uninterested in the game, we decided to cook up a bunch of football food (my best chicken wings ever!) and settle in front of the TV to watch something we are very interested in: documentaries about a music festival.
Both Netflix and Hulu are currently running documentaries about the Fyre Festival. This April 2017 festival was advertised as the ultimate in luxury. An island getaway for beautiful Millennials. Live music, fancy accommodations and food, excursions, and famous people. The ultimate place to see and be seen. It sounded too good to be true. Because it was too good to be true. It was actually a Ponzi scheme that somehow came to an ugly fruition. The more money the festival collected from the unsuspecting ticket holders, the more impossible it became to cancel the festival. Ultimately the festival ended up being canceled after the guests arrived at the island to find FEMA tents with rain-soaked mattresses rather than the promised luxury villas. There was no real food. No real infrastructure. The festival creator Billy McFarland had been spending the next month’s money before it came in to cover last month’s expenses. When he paid the bills at all.
When I watched last night how McFarland had been spending money before he had it, I couldn’t help but think about how people often live on credit card float. It’s a simple enough trap to fall into. You use your credit card to pay for everything (reaping the credit card rewards), and then pay the bill in full at the end of the month. It seems like you are doing everything right. But what you’re really doing is falling behind. You are spending next month’s money on this month’s bills. And once you fall into it, it’s a difficult cycle to break. The easiest way to avoid it is never to fall into it. If you are a credit card reward junkie (like I am) you should make sure you aren’t falling into the float trap by having at least one month’s income in your savings account. If you aren’t able to restrain yourself in that way, it’s best not to go down the float path at all. Limit yourself to cash and debit card—forget about the rewards.
People tend to make some really bad decisions about their money. In the case of the Fyre Festival, Billy McFarland made some really bad decisions about other people’s money (and is now serving six years in federal prison because of it). Don’t be a Billy McFarland. It’s best not to float.