October 16, 2019

Should you travel at any cost?

By admin

Instagram has spawned a new generation of millennial travelers while fanning the desires of the middle-aged traveler so much so that there is a school of thought that believes the millennials are living in the future while the others are living off the past. Is travelling becoming something of a must do at any cost?

Should you travel at any cost?

In an ideal world, everyone must have enough money to travel. But that is not the case as the current traveling generation is new and carefree, led by the belief of “happiness in a distant land” which must be reached at all costs. Strange as it may sound, this has become particularly relevant today because people seeking an imaginary or unreal sense of fulfillment through Instagram feed of people they’ve never met.

Sometimes, just like this dumpling that has burst and is yet so delicious, traveling too is far from smooth.

I met a young American gap year student traveling on her student loan in Switzerland last year. What amazed me was the nonchalant manner in which she perceived her decision and completely justified her reasons for spending her student loan on visiting one of the most expensive countries in the world. “I’ll probably work for the rest of my life to pay off my loan, but hey, what if I didn’t live past this year?”

When said like that, her reasoning seemed sound. In fact, not only students traveling on loans have said this very thing, young adults and people well into their fifties have expressed similar opinions. Of course, I am not entirely sure if I would do that – but that is the way I look at it. I know people who have taken out loans or used credit cards to simply fund their travel. In fact, a friend of mine once said – “I am rather depressed because I haven’t had a holiday in years because I have no money, but I have decided to travel on my credit card. I’ll worry about paying later.”

Fortunately for her, the credit card company gave her the option of converting her spends into easy installment plans. Others haven’t been so lucky.

Social media and why middle-class millennials take loans 

Today’s young adults often get flack for spending frivolously on Instagram-worthy trips but youngsters transitioning from college to the job market believe it is with good reason. They believe all of that experience will benefit them when they’re looking for a job. Is this justified? One can never know, but what we do know is that, these frivolous spends definitely make the holes in the pocket bigger!

A study published in the Journal of Consumer Research from researchers at Bucknell University says that “The middle-class emerging adults voraciously consume exploratory experiences in the present with their imagined future selves in mind.”

In other words, they spend money on expensive travel in order to gain more life experience and give them an edge in the job market, or so they don’t regret missing out on fun experiences later, when they have more responsibilities.

Nathan Anderson, a blogger and teacher says it is all about the goals. “If you’re saving for the future, whether for family, a house, or something else, then perhaps taking a loan out on travel is an ill-advised idea.  But if you’re living for experiences, why not take that trip?  Be mindful of what you can safely borrow, and allow for the unexpected expense, but don’t let anything stand in the way of your adventure.  After all, the worst could happen, and you may never get another chance.”

He quotes from his own experience. “I had been planning an extended trip abroad for some time and was planning on working right up until I left.  Suddenly, weeks before my departure, the company collapsed and I found myself thousands of dollars short of my budget.  I could’ve scrapped the trip, but I’d been planning it for nearly a year.  After a little thought, I decided I’d regret canceling more than I would regret accumulating a little credit card debt. I did accumulate some debt, but I was as smart as I could be about it and took advantage of some 0% financing offers to minimize the financial impact. Today, a lot of millennials are using credit cards as a way to live beyond their immediate means, whether that’s a good thing or not, I cannot say.”

Besides taking out loans or freely using credit cards, there is another smaller, albeit determined set of people wanting to travel the world as a “blogger” – often ending up disappointed and with a debt.

Shubham Mansingka, is a professional blogger and traveler, who never took a loan to travel. “It’s really simple. If I have less money, then I make sure I stay at cheaper places and eat at local eateries. The thought of taking a loan to travel does not even appeal to me. I am wary of carrying a credit cards or spending money I don’t have.”

“I can only wonder what thoughts the millennials have in their mind when they are even thinking of the possibility of taking a loan so that they can be on the road! Although I can’t deny that the allure of a credit card or a loan is an easy bane and one is likely to take the offer in haste.”

Let’s for a moment forget the millennials. Take the elderly for example – the sixty plus travelers, who are currently on the rise. Most of them are living off their past, their life’s savings simply because they want to see the world before they kick the bucket. But what is more interesting is that a few of them also take out loans or use credit cards for the purpose. Why?

“How does it matter that I don’t repay? I might die soon enough, so what do I have to worry about? At least I have lived my life and someone else will pay… this is the most common answer I have received. The justification is corny, but true in many ways. What is even more interesting is that, gone are the days when the elderly saved up for a “health crisis” opting instead to take life more lightly. “We’ve worked all our lives, paid the bills and taxes – so it is just fine for someone else to take responsibility for us.”

Two contrasting views but one common goal – to see the world. But does seeing the world on borrowed money bring any satisfaction? Statistically the two age groups that are care-free are the millennials and the sixty plus. The young adults are cautious and as the former two groups would say. Take Beck Miller, a shining example of travel enthusiasts who has learnt her lessons well.

“I used a personal loan to fund my six weeks Europe trip because it was a last minute decision and I didn’t think the opportunity would come again. I easily paid it off in a couple years, and now I have the memories. But the interest I paid on top of the loan could’ve funded another small/cheap trip. I’ve now just saved up to go traveling, and I think I prefer it this way because I come home and don’t have debt hanging over my head,” says Beck Miller. Like her, hundreds of sensible travel enthusiasts prefer to save for their travel.

“Travel is for leisure and shouldn’t cause additional stress” is the most common theory for travelers like her. “If you need a loan to travel, you probably can’t afford the trip. Don’t dig yourself a hole.”

I am not entirely sure what is right. Whether seeing the world is important or how you see it, there are a growing number of Instagram-inspired travelers who are criss-crossing the globe for the very purpose of widening their viewpoints. The financial institutions are cashing in on this trend by offering lucrative offers on cards and loans.

Loans or credit cards?

While the young is careless about either option, loan seems to be a more popular choice for many reasons – low rate of interest and shorter processing time.  Also the travel bigwigs like ClearTrip etc offer easy payment options, thus fueling more wanderlust amongst the wannabe tourists.

Travel memories
Traveling for that perfect Instagram picture has become a norm. How about just random life pictures?

The processing for personal loans is hassle-free and loans can be availed online with a long repayment tenure. This is a rather win –win situation for the impatient generation not keen on saving up for years. Not all credit cards are accepted in all countries, so loans are the best. Loans are a great way to reach a short term goal, in most cases. And in many situations there’s nothing wrong with that. Personal loans are a great way to reach a short term goal, and with better interest rates than credit cards, are a much safer way to fund your holiday. However you do need to approach this sensibly.

Banks see the yawning gap between reality and aspirations as a tremendous opportunity. But it is you who needs to be smart enough to borrow responsibly. You don’t want to chase a fabulous sunset in Santorini one day and come back to a huge installment plan, right? More than anything the memories of your holiday would be marred by the big settlements for the rest of your life.

Sometimes, life is great through other people’s Instagram pictures as well.