Jaspreet Singh: This Is One of the Dumbest Things You Can Do With Your Money in Your 20s
Written by
Quinlan Grim
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Jenna Klaverweiden
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Money expert Jaspreet Singh recently posted a video on Instagram discussing what he calls “one of the dumbest things you can do with your money while you’re in your 20s.” According to Singh, putting your financial goals on hold for a fun vacation is a horrible decision for your future.
So is it really that bad to prioritize fun over finances? And can you still travel in your 20s without going broke? Here’s what you need to know.
Also see nine frugal money habits that are helping Gen Z save money.
Summer Fun vs. Saving Funds
Around one-third of Gen Zers and millennials say they care more about having a fun summer than they do about saving money, according to a Credit Karma study.
At the same time, Gen Z has reported feeling more financial stress than any other generation. That’s not surprising, considering young people today face a high cost of living and a steep housing market. So why are people in their 20s choosing vacations over savings?
One answer might be an eagerness to travel after a tough few years. Around 44% of Gen Zers and millennials said they were more inclined to spend money on travel this summer than in years past, potentially because travel finally feels accessible after the COVID-19 lockdowns and the economic struggles that followed. The influence of social media could be another factor.
However, it’s just as likely that young people today are simply excited to have fun and spend time with their friends. Twenty-somethings aren’t exactly known for smart financial decision making — that’s as true today as it has been in the past. The main difference is that today’s financial stressors make saving from a young age even more important than ever. As Singh noted in the video, this isn’t a smart financial decision “especially in a time when we’re already seeing the economy slow down.”
The True Cost of Vacations
There’s nothing wrong with wanting to have a fun summer. However, putting off your financial goals can come with long-term consequences. As Singh put it, “You get stuck always going to work to pay your bills, and you never have a chance to have any freedom.”
Neglecting your savings — and, worse, taking on more debt to travel — means neglecting your future financial freedom. The true cost of taking a trip you can’t afford may be higher than you think, especially if you’re putting that trip on a credit card.
The average American has more than $100,000 in debt, and debt tends to peak after age 40, per Business Insider. Although Gen Zers and millennials have less credit card debt than older generations, taking on more debt today will only make it harder to dig out of the hole once auto loans, student loans and mortgage debt pile up later in life.
How To Travel Responsibly
Traveling in your 20s can be a life-changing experience. You may feel like travel is a worthwhile expense — and that’s okay. It’s possible to have that experience without putting your financial goals on hold.
If travel is a necessary expense for you, treat it like a necessary expense. Budget accordingly and make sacrifices in other areas. Look for good deals, share the cost with your friends and avoid luxury tourist traps while you’re abroad.
Most importantly, take the time to save up for that trip so you don’t have to go into debt to pay for it.
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