Younger Americans Are Set to Have a Summer of Fun, No Matter the Financial Costs
A new study by Credit Karma, conducted by Qualtrics, found that the younger generations of Americans are looking to have a fun summer regardless of their financial stability. The study more than 2,000 U.S. adults over the age of 18 and found that 61 percent of Generation Z and Millennials reported that summer travel is on their to-do list.
A third of Gen Z and 32 percent of Millennials reported that they are more interested in having fun than saving money this summer — with 38 percent of Gen Z and 39 percent of Millennials reporting that regardless of their financial situation, summer travel is their priority.
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Furthermore, 27 percent of Gen Z and 28 percent of Millennials consumers surveyed said they are willing to take on debt to have a fun summer — with approximately a quarter of Gen Z (23 percent) and Millennials (25 percent) expecting to take on $2,000 in debt and 11 percent of Gen Z and 8 percent of Millennials anticipating $4,000 in debt.
Despite the high costs associated with traveling such as skyrocketing airfare, travel continues to be at the top of people’s plans this summer — throwing out any financial planning goals and saving money. Forty-four percent of Gen Z and Millennials said they are even willing to spend more money on their travel plans this year, compared to previous years.
As previously reported by WWD, younger generational cohorts seeing their pandemic years stuck inside the house as wasted time is one possible explanation for this consumer behavior rise in tourism, particularly in sports.
Despite the 47 percent of Gen Z and 43 percent of Millennials who said they will dip into their overall savings to pay for travel, 26 percent of Gen Z and 19 percent of Millennials have a dedicated savings account for their travel plans.
To pay for their travels, 21 percent of Gen Z and 23 percent of Millennials rely heavily on credit card rewards and miles, with 13 percent of Gen Z consumers planning to open a new travel or rewards account. The buy now, pay later installation payment plans are also being considered by 16 percent of Gen Z and Millennials.
Another source of debt for Gen Z and Millennials is weddings — 8 percent of survey respondents say they plan to spend the most on weddings this summer. Thirty-six percent of Millennials and 30 percent of Gen Z feel obligated to attend weddings and wedding-adjacent activities such as bridal showers or bachelorette parties even if they are unable to afford them. Notably, 29 percent of Gen Z predicts that the cost of attending a bachelor or bachelorette trip will cost anywhere from $501 to $750.
Wedding guests reported they’ve started to cut costs on gifts (42 percent), tapping into savings (30 percent), doubling up on accommodations with other guests (29 percent) and taking on debt (21 percent). Moreover, wedding guests reported they have had to forgo being part of the wedding party or taking on the role of maid of honor or best man (29 percent of Gen Z women and 25 percent of Gen Z men).
“Seasonal spending is very real, and summertime is no exception,” said Courtney Alev, consumer financial advocate at Credit Karma. “Despite the fact that many consumers are struggling to keep up with their finances at a time when travel costs are on the rise, many young people aren’t willing to put a price tag on the fun and adventure they seek out during the summer months. Factor in social media, and temptation to spend money grows even more as many of our social media feeds are flooded with people on lavish trips.”
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