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Despite the pressures of the cost of living in Australia, a recent study has indicated that millions of Australians are “irrationally” spending their income towards holiday expenditures.
A recent survey by Finder revealed that 17 per cent of respondents, amounting to approximately 3.6 million individuals, have booked a vacation they couldn’t afford within the past year.
This data persists despite the ongoing rise in the cost of living and the economic pressures being experienced by households throughout Australia.
Recent Australian Bureau of Statistics data underscores the financial strain that households are currently enduring. It reveals that during the June 2024 quarter, every household experienced an increase in living expenses, ranging from 1.2 per cent to 1.4 per cent. This rise in cost notably outpaced the general consumer price index, which recorded an increase of just 1 per cent.
The Finder survey also discovered that 5 per cent of travellers incurred debt due to planning holidays that were beyond their financial means, while an additional 5 per cent resorted to borrowing funds from friends or family members.
Moreover, it revealed that 6 per cent of prospective holidaymakers found themselves forced to cancel their travel plans entirely due to affordability issues.
Angus Kidman, a travel expert at Finder’s, underscored that while many Australians are grappling with financial strain, the allure of travel still remains strong.
This is despite recent findings from Deputy indicating a notable increase in the number of workers engaged in poly-employment as a means to achieve financial stability. Specifically, the data revealed that 22 per cent of employees are now managing the demands of two jobs, while a smaller segment, constituting 5 per cent, is reported to be juggling three positions simultaneously.
Kidman emphasised that neglecting one’s financial situation in favour of booking a vacation can lead to significant long-term repercussions.
“Ignoring financial reality can lead to serious consequences in the long run.
“Your post-holiday glow will quickly fade when you’re faced with substantial debt that can take years to clear,” Kidman said.
Finder also uncovered that the inclination to exceed travel budgets is notably more pronounced among younger Australians. Specifically, 35 per cent of Generation Z respondents reported booking unaffordable vacations, in stark contrast to merely 1 per cent of Baby Boomers.
Kidman advised individuals grappling with financial difficulties to re-evaluate their holiday expectations, emphasising that indulging in a lifestyle that exceeds one’s financial capabilities is a “classic money mistake that often spirals”.
“Rein in your holiday expectations while you boost your financial position.
“If you’re in over your head with bills, you need to be realistic about what you can afford,” Kidman said.
He offered practical tips for budget travel, such as “house swapping or staying with family in another city to save on accommodation costs”.
Additionally, he emphasised the importance of travel insurance: “And remember – if you can’t afford travel insurance, you can’t afford the holiday.”
