These twenty-something TikTokers are draining their savings on travel — here’s how they plan to afford it

‘I’ll get my money back’: These twenty-something TikTokers are blowing their savings on travel; this is how they plan to enable it

For 26-year-old Jessica Tsoi, travel has always been an important part of her life since she was a child and would go on family trips during the summer holidays.

As an adult with a career and income of her own, she continued to explore countries like South Korea and Switzerland, documenting her experiences under the direction of TikTok @jessicawantsanap, where she has almost 28,000 followers.

The hashtag “travel” on TikTok has almost 119 billion views with thousands of videos showing beautiful montages of overseas destinations. In addition to inducing instant wanderlust, the videos often promote the trendy but controversial idea of ​​spending big on travel when you’re young.

The recurring line is, “I’m going to get my money back, but I’m never going to turn 20 and travel to [location] again.” They claim that the once-in-a-lifetime experiences far outweigh the costs.

But should you use up your savings to make the most of your youth? Experts say travel and financial stability don’t have to be mutually exclusive.

Certified financial planner Akeiva Ellis explains that the old adage of working hard while you’re young to enjoy your retirement no longer applies to younger generations.

“More people are waking up to the fact that life is not promised,” says Ellis.

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Why younger generations prioritize travel

Many Gen Zers and millennials have put their savings on hold to prioritize meaningful experiences right now, especially after the COVID-19 pandemic left them locked in their homes for months.

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Tsoi says many people may have bolstered their savings during the pandemic restrictions and are now using the extra money to travel the world. She takes at least one trip that requires a flight every four months, but also enjoys shorter trips on the weekends.

According to a June survey by wealth management firm Personal Capital, 55% of respondents aged 26 to 41 said they spend more time planning a vacation than retirement.

Ellis says that as you get older, your health may be compromised or you may be dealing with other responsibilities that hinder your freedom, such as caregiving.

“It makes sense that a lot of people would maximize their 20s that way and see as much of the world as they can before they hit those major life milestones.”

How to stay on budget on vacation

Ellis says that while the intangible benefits of experiencing new places can often supersede the “dollars and cents” aspect for some people, there are ways to make travel affordable and stay on top of your financial goals.

She says the more pre-planning you can do, the better. “Look ahead, say, ‘Okay, what are my next trips that I want to do for the year?’ And start setting aside money to help cover the costs.”

Ellis also recommends “travel hacking,” in which you maximize your credit card rewards and bonuses for expenses like flights and accommodations. She says she and her husband went to Dubai and the Maldives “for free” a few years ago using these benefits.

Tsoi mentions that she used her Chase Sapphire Reserve card for airport lounge access and is saving up points to gift her parents or grandparents with a business class flight. He also suggests bundling on hotels and flights to get deals and discounts.

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It’s important to factor in surprise costs along the way: Tsoi says it’s a good idea to budget for an extra 5-10% in case your plans change or there’s an emergency.

And says Ellis, part of the planning process includes making a budget for what you plan to spend while you’re actually on vacation. It’s easy to stay on budget when you’re booking your flights and accommodation, but it’s harder to stay on track when it comes to experiences and food. Especially when you want to immerse yourself in the culture around you.

“I had that mentality of, ‘Oh, you’re only here once, go to this restaurant.’ I’m that person.”

Ellis also explains that traveling doesn’t necessarily have to involve flying around the world; you can take road trips or travel to the country, which won’t cost as much as booking a plane to the Maldives, for example.

Flights alone can take a big bite out of your travel budget. Personal finance site ValuePenguin notes that traveling to a destination often accounts for half of vacation spending, with average airfares reaching $3,304 for households.

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Should you compromise your financial stability to travel?

Tsoi says not exactly. “I don’t think it’s worth going into debt. And that’s something that stays with you for a long time.”

Going into vacation debt can affect your credit score, which lenders use to determine whether you’re a reliable borrower when applying for things like mortgages or more credit, plus interest makes it harder to pay for that amazing trip.

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Americans already have a lot of household debt: The Federal Reserve Bank of New York says it rose to $16.51 trillion in the third quarter of the year. And with inflation continuing to keep prices high and Fed rate hikes pushing up interest rates, it’s even more expensive to borrow.

Tsoi believes that traveling only makes sense if you can still pay your fixed living expenses, such as rent, utilities and food, and pay your monthly credit card bill on time.

Also set aside money for your retirement and your savings – whatever is left over goes towards travel or other fun activities.

And she emphasizes that you have to prioritize what you value most in your life.

“For me, personally, right now, it’s comfort, convenience and utility… I’ll upgrade a flight, like a business class upgrade. A little more legroom, I’ll check a bag, or I’ll stay in a slightly nicer hotel .

She adds that she doesn’t usually spend money on other things, like getting her hair done or decorating her apartment, but that may change later if she earns more money or her priorities change.

“Whatever makes you happy.”

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This article provides information only and should not be construed as advice. Offered without warranty of any kind.

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