We are in the summer of 2024 and more and more Americans are willing to go into debt to finance their vacation. Note that the interest expense on personal debt is not deductible (in contrast with mortgage interest for your home).
This post pandemic world never ceases to amaze me. Cost of living (home, rent, child care, food, etc.) has raised much more rapidly than salaries, so credit cards and other financing have increase in the last few years. Note that this increase in debt should be compared to the GDP or to the wealth of families which also increased due to the strong real estate market and spectacular run of Wall Street stocks. This is even more detailed explained by Richard Vague in his Youtube video – The Truth About Our “Massive” Credit Card Debt
This is a clear example of bad debt as your net worth is decreasing for an experience. There is no asset, no future cash inflow or any other financial advantage in the future for that “investment” (or how it is really called expense). Try to keep a budget, have a emergency savings for 3 to 6 months of living expenses and if you cannot go on your dream vacation yet, well, do something less fancy but still have the time to disconnect and relax.
Link CNBC – Gen Zs are traveling big this summer — how they’re paying for it may surprise you
Link Kalb 5 – Americans willing to go into debt for travel and entertainment, study finds
Link KTLA5 – Parents taking children to Walt Disney World acquire nearly $2K in debt, study shows
