Your Instagram feed is probably littered with photos from your friends on vacation sharing breathtaking views of exotic beaches or snapshots of once-in-a-lifetime meals. And if you think that the sheer number of these vacation photos is growing, you’re not wrong.
That’s because millennials, more than previous generations, are making travel a priority. In 2019, the average millennial (ages 21 to 37) plans on taking roughly five trips throughout the year, three of which are expected to be international, according to AARP’s 2019 Travel Trends report. That’s more international trips than Gen X (ages 38 to 53) and more overall trips than Baby Boomers (ages 54 to 72).
Yet, despite polls around over-spending, millennials are planning trips responsibly. They plan to spend $4,400 on travel overall in 2019, compared to Gen-Xers’ $5,400 budget and Boomers’ estimated $6,600, according to AARP.
And yes, they’re making room for travel in their budget even if they have student loan debt. In general, debt shouldn’t preclude millennials from travelling, says Tiffany Aliche bestselling author and founder of the Budgetnista financial blog.
“You don’t have to be debt-free in order to enjoy your life,” Aliche tells CNBC Make It. If you have a plan to pay down your debt and you’re making regular payments, Aliche says that the benefits of travel can outweigh the costs — as long as you’re not overspending.
It’s important to keep in mind that student loans, in particular, are typically long-term, low-cost debt. And waiting until it’s all paid off may take decades. “That would be like saying you’re never going on a vacation until the mortgage is paid
off,” Aliche says. You don’t see a lot of Baby Boomers with McMansions adhering to that philosophy.
But how are millennials juggling their debt while paying for their next adventure? They’re saving more, cutting costs where they can, and in some cases, even earning more, according to those CNBC Make It spoke with over the summer.
Doubling down on savings
“I think I’m really lucky to be able to travel multiple times each year, but I definitely make it a priority,” Paige Dolan, a 30-year-old hospital coordinator, says. She typically spends between $2,500 and $4,000 annually on travel — and has no regrets.
Dolan, based in Cincinnati, Ohio, relies on an app to automatically set aside savings every month so she can afford to take about two to three big trips each year. “I put myself in the mindset of thinking, ‘Oh, I need an extra $100 every two weeks,’ for example, and then allocate it into a savings account specifically for travel,” she says. “It makes it affordable and manageable.”
“You don’t have to be debt-free in order to enjoy your life.”
-Tiffany Aliche, founder of the Budgetnista financial blog
She also plots out her daily expenses to make sure she’s on track with her financial goals. “I track every dollar I spend in an Excel spreadsheet. I realize that might sound crazy, but it really does help me see where I am spending money and how much in each category,” she says. “This way, I can compare months and see if I can cut spending in some areas over others if I need to re-allocate the money for travel.”
If you want to make travel a priority, then it’s smart to actively include it in your monthly budget. That may mean you need to cut costs on your everyday spending. “I like to look through my expenses monthly and ask myself if the expense is something I really want to keep in my budget, or if I can get rid of it and move that money to my travel fund,” Whitney Hansen, host of the Money Nerds podcast, tells CNBC Make It. “Ask yourself out loud: ‘Do I really want to go out to eat five times a week or do I want to drink wine in Italy?'”
When it comes to saving for travel, millennials are leading the pack. Over half, 52%, of millennials are saving for a vacation, according to a survey of approximately 2,200 U.S. adults that CNBC Make It performed in conjunction with Morning Consult.
Taking shorter trips
Brad Pettiford and his wife Jami at Petco Park in San Diego to watch the Detroit Tigers play the San Diego Padres. The couple has been to 14 Major League Baseball stadiums so far, with the goal of visiting all of them.
Brad Pettiford and his wife Jami at Petco Park in San Diego to watch the Detroit Tigers play the San Diego Padres. The couple has been to 14 Major League Baseball stadiums so far, with the goal of visiting all of them.
Brad Pettiford, 32, tells CNBC Make It that when it comes to travel expenses, he and his wife, Jami, focus less on specifically saving up for an individual trip and more on keeping costs low overall. “Traveling is something that we made the decision to prioritize in our lives, so we don’t necessarily view it from a financial standpoint of ‘can we afford to do it or not.’ Rather, our focus is on finding great deals so we can visit all the cities on our bucket list as affordably as possible,” he says.
Pettiford, a Detroit-based public relations professional, says he typically spends over $4,000 a year traveling, but most of the trips are three-day long weekend getaways as opposed to full-fledged vacations. “Obviously the money spent traveling and on food and entertainment while we’re away can add up, but because our trips are mostly three-day getaways, our overall expenses never really reach astronomical levels,” he says.
To further minimize expenses, he and his wife will stay at cost-effective Airbnb residences instead of pricier hotels. When that’s not an option, they try to find properties where they can use hotel points. “Because our trips are mostly three-day getaways, our overall expenses never really reach astronomical levels,” Pettiford says.
Pettiford and his wife manage to afford all this travel while juggling about $40,000 of debts that include car payments, student loans and financing for home renovation projects. “We feel like those shared experiences are more meaningful than tangible items we could spend our money on,” he says, adding they live modestly so they can have money to spend on travel while taking care of the debts and monthly expenses.
Adding more money to the mix
Sometimes it’s not about saving or even adhering to a strict budget, it’s about boosting your income. That’s what allows 25-year-old Emma Tiernon to spend about $10,000 a year on travel. She tells CNBC Make It that in order to fund her trips, she juggles multiple side hustles: swim team coach, personal trainer and freelance social media expert.
But for her, the effort is worth it. “At the moment, travel is a priority so I fit it into my finances like a bill,” the Denver-based media relations strategist says. All of the money from her side jobs, plus about 5% from her full-time paycheck, goes into an Acorns investment account. Using an investment account instead of a savings account helps grow her travel fund, Tiernon says.
Emma Tiernon traveled to Iceland, Denmark and Sweden for a week with friends in April 2018.
Source: Emma Tiernon
Emma Tiernon traveled to Iceland, Denmark and Sweden for a week with friends in April 2018.
“It’s important for me to be pushed outside of my comfort zone and understand what’s happening politically and culturally in the world,” Tiernon says. In addition to growing her income, Tiernon works remotely during some trips so she can take advantage of cheaper travel days. She also invested in a travel rewards credit card and pays for some travel costs with rewards points from time to time.
“I don’t think that there’s anything wrong with making travel a priority, but really mean that,” Aliche says. Don’t be one of those people who say they make travel a priority, but every single weekend they’re going out to brunch. “Keep your spending in alignment with your financial goals and responsibilities.”
By
Megan Leonhardt
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