Saving for the trip of a lifetime
He’s home now, but 48 hours earlier, Nevan Ryan was dining at a cozy bistro in Venice, Italy, overlooking the canals — and two weeks before that he was learning to surf in San Sebastian, Spain.
Fully bearded with unkempt blonde hair and tanned skin, he’s not the same 22-year-old who left his parents’ condominium in Toronto three months ago.
“The toughest part of travelling is the end,” Mr. Ryan says. “You have to take some time to think about what’s next.”
Like many Gen-Yers, Mr. Ryan, who holds a BA (Hons) in Fine Arts from Queen’s University, dreamed about hitting the road and travelling after graduating in September 2012. This year he’s taken two trips: one to South America for six weeks with a five-day break at home and then another six weeks in Europe.
Statistics Canada doesn’t track the number of young Canadians travelling abroad. But data south of the border, suggests young people take an average of 3.9 trips a year.
Yet the median income for Canadians age 20-24 is shrinking. According to a 2010 report from Statistics Canada, the median total income for that age bracket was $13,800 in constant dollars, much less than their peers’ earnings in the mid-1970s. Throw in a whopping $19,000 — the average loan an undergraduate student must pay back — and travel becomes a rare luxury.
With BMO reporting Canadians spend an average of $3,073 on summer travel, should young people put aside money for vacations?
“Absolutely,” said Lesley Scorgie, author of Rich by Thirty: A Young Adult’s Guide to Financial Success. Ms. Scorgie encourages young Canadians to embrace travel in their financial planning.
“Certainly you don’t get that material return as an investment, but people do get experience in their world of business. Travel can have rewards that are more career building and can open up doors you wouldn’t have otherwise opened, professionally speaking.”
As an avid traveller, Ms. Scorgie met interesting people abroad and remained in contact afterwards. She’s been asked to revisit them to work on speaking engagements together. What’s more, these new connections helped to sell her books internationally.
Travel also breeds creativity. “When travelling, you can get an open mindedness from experiencing different cultures because it broadens our perspectives in our own businesses. This in turn makes an employee more likely to be creative back at home,” said Ms. Scorgie, adding you can pick up unique ideas from your travels, such as project management skills or experiencing how a foreign institution handles customer service.
For Mr. Ryan, travel also created the opportunity to see first hand the paintings he had been studying in books and on projector screens in his lecture halls. He said he was able to appreciate the amount of work European artists dedicated to their craft.
“[Art] is all around you: on the streets, in the buildings and even on the floors of the cathedrals,” he said. “These artists from the Renaissance to the beginning of modern art lived and breathed art. I think to really succeed today as an artist is to fully immerse yourself in it and produce as much work as you can.”
With the advent of social media and networking tools, Mr. Ryan was able to connect easily with fellow artists and art history students from various parts of the world on his travels. He remained in contact with one young woman from Seattle who shared his online portfolio with other artists back at home.
Travel can be an enriching experience, but there is a “smart” way to do it, Ms. Scorgie said. She discouraged slapping travel expenses onto a credit card. The trick is to plan ahead. Look into the total cost of the vacation and work backwards, she said. “People are afraid of the big, bad b-word: budget.”
And budget is exactly what Mr. Ryan did. He figured his three month venture into South America and Europe would cost roughly $14,000. He managed to save $7,000 from last year’s summer job as a sales representative and an additional $9,000 from a recent art show at which he sold 30 pieces of his work.
Brenda Yu also hopes to stay within her travel budget. She’s always longed to visit the picturesque beach towns dotting the South of Spain. So when a friend told her she was thinking of vacationing in the region for a week in mid-August, Ms. Yu jumped at the chance to join.
The 23-year-old Toronto resident, who is working in London, England, as an intern with the United Nations, said in an interview over Skype that she receives a monthly stipend for her work, covering her daily expenses.
She recently left a full-time job at a marketing company in Edinburgh, but managed to build up a small nest egg.
“It’s hard to save and have a social life in London. Let’s say it’s a Tuesday night and a friend asks you to grab dinner after a long day at work. I now have to really consider whether I can afford doing this or if I would go over my budget.”
Ms. Yu is also planning to travel to Hong Kong in July to visit her family, and she must consider flight tickets, accommodations, transportation, health insurance, food and other expenses for her summer travels.
With so many costs to add up when organizing a vacation, Andrew Feindel, a certified financial planner with Investors Group in Toronto, steers his younger clients towards having fun, but cautions they will need money saved up for the future.
Quoting The Wealthy Barber, Mr. Feindel said it’s important to “pay yourself” first by locking 10% of your paycheque into an RRSP or TFSA. By maximizing RRSPs in early years, you can get a tax-deductible refund that can then go towards travel.
With Mr. Ryan’s trip now a memory, he’s once again facing the pressure of finding employment. The same goes for his travel companions, who traded in their full-time jobs for backpacks and hostels.
He plans on producing enough art this summer to host another show. And he knows he wants to move out of his parents’ condo and eventually have his own art studio. But the travel bug might not be out of his system just yet.
“There are reasons why I should be saving. But at the end of the day, I’m 22 and I’m not getting any younger. You get so much life experience when you travel in a short period of time. I can’t do that at home.”