Young Travellers Say They’ll Live Now, Make Money Later
Gen Z vacationers say they are making rigorous budgets behind the scenes to keep track of costs.
Gen Z vacationers say they are making rigorous budgets behind the scenes to keep track of costs.
Cameon Wade felt like the pandemic had robbed her of her early 20s.
So, after getting into a film program at Prague Film Institute, she travelled by herself across Europe this summer. Originally, she was planning to only travel for the program, but ended up going to seven cities in five countries in the course of three weeks to make up for the lack of travelling during the pandemic.
“The whole pandemic, I felt like the years were taken away from what was supposed to be the best years of my life and college,” she said.
Young people have always taken trips during college years, gap years or after college. This year, however, the winding down of Covid-19 travel restrictions in many countries gave many the freedom they didn’t have in the past few years.
Many of these students or recent graduates are now taking more elaborate and in some cases more expensive vacations than they expected to take at this age, say some young graduates. Overall, 72% of Gen Zers between the ages 18 and 25 surveyed in April were likely to take a summer vacation, more than any other age group, a recent Bankrate survey found.
Even so, those taking larger vacations recognize it isn’t an easy decision. In the U.S., young people between the ages of 18 to 34 had the lowest median weekly checking-account balances when compared with older age groups for the past two years, according to a recent study by JPMorgan Chase Institute.
To make up for the extra costs, these young vacationers say they are making rigorous budgets and doing financial planning behind the scenes to keep costs from skyrocketing.
Many say they believe the vacations themselves will deliver justifiable returns down the road. On TikTok, thousands of young people have posted videos of their travels with the phrase “I will make my money back.” Most videos show beautiful landscapes or dinners, but also an awareness in the captions of the financial sacrifice that comes with travelling.
“You want to frame it in such a way that, yes, this is a financial sacrifice,” said Scott Rick, an associate professor of marketing at the University of Michigan, who studies emotional causes and consequences of consumer financial decision-making. “But this is a calculated decision on my part.”
Ms. Wade posted her TikTok video in June with the caption “I’ll make my money back, but I’ll never be 20 scootering around Paris at night again.” More than three million viewers saw the clip.
After getting accepted to the film program, Ms. Wade started doing research about how much she needed to make the trip happen. “Once I realized it was possible, it was a no-brainer,” she said.
She said she paid for all of her expenses herself, using her income from her four poetry books and a part-time job to fund the trip. She also took advantage of student discounts at museums, stayed in cheaper hostels, opted for the cheapest meal options and relied on public transportation to stay on budget.
The idea behind these vacations is that an experience will have a longer lasting social benefit. Cassie Holmes, a professor at UCLA’s Anderson School of Management, said several studies back up the thinking that experiences lead to greater initial happiness and provide greater lasting happiness than material possessions.
As people get older, they start to realize that engaging in experiences will bring them greater happiness, she says. In many ways, the pandemic simply got younger people to realize this benefit earlier.
“Vacations are the experiences that not only sort of generate initial happiness, but they continue to make you feel happier as you revisit them,” Ms. Holmes said.
Isabelle Lieblein, 22, was supposed to study abroad in Germany in 2020, but the pandemic disrupted her plans.
“Before Covid, I said no to trips to save up to go to Germany, and then it didn’t happen. It really changed my outlook,” she said.
Ms. Lieblein kept working throughout the lockdown to build up her savings and spent a semester studying abroad in Germany after the travel restrictions were lifted. She travelled to 19 countries during her study abroad period and paid for the entire trip with her savings.
Throughout her backpacking adventures in Europe, Ms. Lieblein was interviewing for jobs with plans to start after her graduation from Kettering University in Flint, Mich., and her trip. Ms. Lieblein started a full-time job as a quality engineer in February. On TikTok, she shared a video encouraging other young people to invest in experiences such as travel after she ended up making the money she spent back.
Having this experience, she said, is worth the coming financial challenges.
“I wanted to take advantage of it even if that means that I’m eating ramen until I get my first paycheck when I get back, that’s worth it to me,” she said.
Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: August 19, 2022.
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For self-employed Australians, navigating the mortgage market can be complex—especially when income documentation doesn’t fit the standard mould. In this guide, Stephen Andrianakos, Director of Red Door Financial Group, outlines eight flexible loan structures designed to support business owners, freelancers, and entrepreneurs.
1. Full-Doc Loan
A full-doc loan is the most straightforward and competitive option for self-employed borrowers with up-to-date tax returns and financials. Lenders assess two years of tax returns, assessment notices, and business financials. This type of loan offers high borrowing capacity, access to features like offset accounts and redraw facilities, and fixed and variable rate choices.
2. Low-Doc Loan
Low-doc loans are designed for borrowers who can’t provide the usual financial documentation, such as those in start-up mode or recently expanded businesses. Instead of full tax returns, lenders accept alternatives like profit and loss statements or accountant’s declarations. While rates may be slightly higher, these loans make finance accessible where banks might otherwise decline.
3. Standard Variable Rate Loan
A standard variable loan moves with the market and offers flexibility in repayments, extra contributions, and redraw options. It’s ideal for borrowers who want to manage repayments actively or pay off their loans faster when income permits. With access to over 40 lenders, brokers can help match borrowers with a variable product suited to their financial strategy.
4. Fixed Rate Loan
A fixed-rate loan offers repayment certainty over a set term—typically one to five years. It’s popular with borrowers seeking predictability, especially in volatile rate environments. While fixed loans offer fewer flexible features, their stability can be valuable for budgeting and cash flow planning.
5. Split Loan
A split loan combines fixed and variable portions, giving borrowers the security of a fixed rate on part of the loan and the flexibility of a variable rate on the other. This structure benefits self-employed clients with irregular income, allowing them to lock in part of their repayment while keeping some funds accessible.
6. Construction Loan
Construction loans release funds in stages aligned with the building process, from the initial slab to completion. These loans suit clients building a new home or undertaking major renovations. Most lenders offer interest-only repayments during construction, switching to principal-and-interest after the build. Managing timelines and approvals is key to a smooth experience.
7. Interest-Only Loan
Interest-only loans allow borrowers to pay just the interest portion of the loan for a set period, preserving cash flow. This structure is often used during growth phases in business or for investment purposes. After the interest-only period, the loan typically converts to principal-and-interest repayments.
8. Offset Home Loan
An offset home loan links your savings account to your mortgage, reducing the interest charged on the loan. For self-employed borrowers with fluctuating income, it’s a valuable tool for managing cash flow while still reducing interest and accelerating loan repayment. The funds remain accessible, offering both flexibility and efficiency.
Red Door Financial Group is a Melbourne-based brokerage firm that offers personalised financial solutions for residential, commercial, and business lending.
For self-employed Australians, navigating the mortgage market can be complex—especially when income documentation doesn’t fit the standard mould. In this guide, Stephen Andrianakos, Director of Red Door Financial Group, outlines eight flexible loan structures designed to support business owners, freelancers, and entrepreneurs. 1. Full-Doc LoanA full-doc loan is the most straightforward and competitive option for …
Continue reading “8 Home Loans Every Self-Employed Buyer Should Know About”
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