These TikTokers in their 20s are using their savings to travel – that’s how they want to afford it

“I’ll make my money back”: These TikTokers in their 20s are using their savings to travel — so they plan to afford it

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

As an adult with a career and an income of her own, she has explored countries like South Korea and Switzerland and documented her experiences under the TikTok name @jessicawantsanap, where she has almost 28,000 followers.

The hashtag “Travel” on TikTok has nearly 119 billion views with thousands of videos showing beautiful montages of overseas travel destinations. Not only do the videos instantly induce wanderlust, they often promote the trendy but controversial idea of ​​spending big bucks on travel at a young age.

The repeated phrase reads: “I will make my money back, but I will never be in my 20s and travel [location] again.” They claim that the once-in-a-lifetime experience far outweighs the cost.

But should you be using 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 young to enjoy retirement no longer applies to younger generations.

“More and more people are realizing that life is not promised,” says Ellis.

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Why younger generations are prioritizing travel

Many Gen Z and Millennials have paused their savings to prioritize meaningful experiences now — especially after the COVID-19 pandemic locked them in their homes for months.

Tsoi says many people may have topped up their savings during the pandemic restrictions and are now using the extra money to travel around the world. She takes a trip that requires a flight at least every four months, but also enjoys shorter car trips at 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 vacations than retirement.

Ellis says when you’re older, your health may be compromised or you may have to deal with other responsibilities that limit your freedom, such as driving. B. the care.

“For a lot of people, it just makes sense to maximize their 20s that way and see as much of the world as possible before hitting those important life milestones.”

How to stay on budget while on vacation

Ellis says that while the intangible benefits of experiencing new places often replace the “dollars and cents” aspect for some people, there are ways to make travel affordable and keep your financial goals in mind.

She says the better you can plan ahead, the better. “Look ahead, say, ‘Okay, what are my upcoming trips that I want to do this year?’ And start putting money aside to cover the costs.”

Ellis also recommends “travel hacking,” where you maximize your credit card rewards and bonuses on expenses like flights and lodging. She says that a few years ago she and her husband traveled to Dubai and the Maldives “for free” by taking advantage of these perks.

Tsoi mentions that she used her Chase Sapphire Reserve card to access the airport lounge and uses her points to treat her parents or grandparents to a business class flight. She also suggests bundling hotels and flights for deals and discounts.

It’s important to watch out for unexpected expenses along the way – Tsoi says it’s a good idea to plan for an extra 5-10% in case your plans change or an emergency arises.

And Ellis says part of the planning process involves creating a budget for how much you’re willing to spend while you’re actually on vacation. It’s easy to stay on budget when booking your flights and accommodations, but harder to stay on track when it comes to things like experiences and food. Especially if you want to immerse yourself in the culture of your area.

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

Ellis also explains that travel doesn’t necessarily have to involve flying around the world – you can go on road trips or travel domestically, which doesn’t cost as much as booking a plane to the Maldives, for example.

Flights alone can weigh heavily on your travel budget. Personal finance site ValuePenguin notes that travel to a destination often accounts for half of vacation spending — with the median air fare for households being $3,304.

Continue reading: 10 Best Investing Apps for Unique Opportunities (Even If You’re a Newbie)

Should you jeopardize your financial stability for travel?

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

Taking on vacation debt can affect your credit score — which lenders use to determine if you’re a reliable borrower when applying for things like a mortgage or more credit — and the interest rates make that incredible trip harder to repay.

Americans already hold 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 still keeping prices high and Fed rate hikes raising interest rates, it’s becoming even more expensive to borrow.

Tsoi believes traveling only makes sense if you can afford your fixed living expenses like rent, utilities, and groceries, and pay your monthly credit card bill on time.

She’s also putting money aside for her retirement and savings – what’s left over goes to travel or other fun activities.

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

“Personally, for me right now, it’s comfort, convenience and utility… I’m going to upgrade a flight, like an upgrade to business class. A little more leg room, I’ll check in a bag or stay in a slightly nicer hotel.”

She adds that she doesn’t usually spend money on other things like getting her hair and nails done or decorating her apartment, but that might change later as she makes more money or changes her priorities.

“Whatever makes you happy.”

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This article is informational only and should not be construed as advice. It is provided without any guarantee.

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