Millennials are a generation that prides themselves on buying experiences over things. So it should come as no surprise that millennials are willing to go into debt to take a summer vacation. With the COVID pandemic gradually shifting into the rearview, millennials are more ready than ever to splurge for a relaxing getaway. And they have no qualms about it.
Habits that define millennial spending.
In a recent Credello survey of 500 millennials, 45% of respondents indicated they’ve previously gone into debt for a summer trip, with 23% indicating they haven’t yet, but they totally would, given the opportunity. Only 32% of millennials felt that going into debt wasn’t worth it for a few days of fun and sun.
Of those millennials ready to use debt to get out of town, 39% are willing to drop $1,000 or more. And the most common reasons cited for taking on that debt are because:
- YOLO – You only live once (31%)
- The commute from bed to kitchen to the couch is getting really lame, and a change of scenery is mandatory (31%)
- Millennials work hard for the money, so hard for it, honey (30%)
Hard to believe, but most millennials with travel debt don’t feel an ounce of regret about it. But what happens if and, let’s be honest, when that feeling changes?
How to pay off travel debt quickly.
If you’re a millennial that’s gone into travel debt, it might be weighing on you now that your beachside Instagram pictures aren’t getting likes. If you’re ready to pay down that travel debt, here’s what you need to do.
- Get to know your debt. If you paid for your dream vacation using multiple credit cards or loans, figure out the total amount of debt you have. If travel debt is just a part of the story, pull in any debts you want to pay off and create a list that includes the amount you owe, the interest rate, and the monthly payment due date.
- Choose a repayment strategy. Two of the most popular debt repayment strategies are the debt snowball and the debt avalanche. With the debt snowball, you’ll work to aggressively pay off your smallest debt first. The debt avalanche begins the process by focusing on the debt with the highest interest rate. If you need a quick win to stay motivated, the snowball might be best. But if seeing savings potential gets you going, the avalanche is worth a try.
- Figure out how much you can afford to pay. Assess how much of your current income you can reasonably put toward debt repayment. If you find that you can’t pay as much as you’d like per month, consider taking on a side hustle or part-time job to bridge the gap until your debt is repaid.
- Put the plan in motion and stick to it. Once you decide how much you’re paying monthly and which debt you’re putting extra money toward, the hard part is sticking to it. This might mean you need to take a bit of time away from travel while you get your debt under control. Then, you can save ahead of time and not need to take on debt for your next vacation splurge.
The bottom line
Millennials are ready to spend whatever it takes to make memories while they can. And while there may not initially be regret around that spending, when it piles up and starts causing stress, you may be singing a different tune. When you’re ready to tackle travel debt once and for all, be sure to figure out exactly what you owe, decide on a repayment strategy, be reasonable about what you can pay, and stick with your plan. Getting out of debt now means you can start daydreaming about your next travel destination and plan to pay for the trip in cash!
By Brooke Joly
Brooke is a freelancer who focuses on the financial wellness and technology sectors. She has a passion for all things wellness and spends her days cooking up healthy recipes, running, and snuggling up with a good book and her fur babies.