Driving through rolling savannah plains in Kenya’s Maasai Mara National Reserve on her honeymoon, Liza Akhvledziani Carew saw elephants, lions and giraffes. She was reminded of the sheer vastness of the world and felt her “own little life” put into context.

For Ms. Akhvledziani Carew, the chief executive officer of a startup that helps Canadians earn more credit card points, travel is a non-negotiable budget item.

“It’s a big part of our lifestyle. That’s probably what I would spend most of my money on,” she said, adding that the couple pays for part of their travel with a “sophisticated [credit card reward] points strategy.”

The cost of travelling has soared in recent years, driven by the postpandemic travel boom, inflation and new taxes imposed by destinations affected by overtourism.

But for many Canadians, travel remains a high-priority spending area, regardless of rising costs. And it’s clashing with other financial goals.

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Kathleen Daunt, a financial adviser with the New School of Finance in Toronto, works with clients who are saving for a major financial milestone, most commonly to buy a home.

When she sits down with her clients and calculates the amount they’d need to save each month to reach that goal – which usually means not spending on travel – they balk at the trade-off.

“People expect to have all the items on their list of priorities. If anything, it means you have to understand your priorities and have flexibility,” she said.

She also said roughly two in five new clients will cite annual travel as one of their top financial goals.

Ms. Daunt said she sees the desire for travel as a mix of social media-induced fear of missing out, widespread burnout and a societal view of vacations as a right – all of which can make it easier to justify overspending.

“You have that same old expectation [of being able to take vacations] but everything just feels more pricey,” she said. “It’s so much money for a family of four or more to do an on-a-plane vacation.”

Canadians’ overseas trips were up 32 per cent in the July-to-September period last year from the same period a year earlier, and up 6.5 per cent from 2019, according to Statistics Canada’s most recent national travel survey. The amount they spent abroad also jumped, rising 20 per cent in 2024 from a year earlier and nearly 40 per cent from 2019.

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Even the trade war with the United States and growing possibility of a recession have not dimmed Canadians’ vacation ambitions. While travel south of the border by plane and car is down, Transat A.T. Inc. chief executive officer Annick Guerard said on a conference call with analysts in March that Canadians’ spending on transatlantic flights has not been affected.

According to estimates by Barry Choi, a personal finance and travel expert at moneywehave.com and regular Globe and Mail contributor, a two-week European vacation costs about US$5,050 ($7,000), though he noted the estimate was for a solo traveller, so couples or families should expect to pay notably more. Timing can significantly affect costs, with June to August the most expensive months.

In contrast, according to the Canada Mortgage and Housing Corp., Canadians’ average monthly mortgage payment at the end of 2024 was $2,042 (and much higher in Toronto, at $3,006, and Vancouver, at $3,053).

Rachel Dodds, a professor at Toronto Metropolitan University’s Ted Rogers School of Hospitality and Tourism Management who studies overtourism and consumer motivations for travel, said social media plays a huge role in stoking travel interest. According to data from TikTok, as of mid-2024 the app had seen a 410-per-cent increase in travel content views since 2021.

“Everyone has a phone, everyone consumes [travel content] – if you see a reel on Instagram you’re like, ‘Oh, I wanna go there,’” Prof. Dodds said. That goes both ways: While on vacation, people are much more likely to post photos for the “instant gratification” of likes and comments. “There’s an emotional and sharing aspect of it that didn’t exist before 15 years ago.”

Relative to previous decades, travelling is now more affordable and is seen as a right rather than a privilege in Western countries, Prof. Dodds said. And that increase in affordability has come at a time when many people, particularly millennials and Gen Zers, have more disposable income but feel other large financial goals are out of reach.

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“Travel has become a substitute for those kinds of things,” she said.

Prof. Dodds said we are an increasingly lonely society, and many people are travelling to connect with others to have meaningful, authentic experiences of other cultures. That’s given rise to sustainable travel, and nature-based trips and community experiences, rather than the traditional resort-based vacations.

While Ms. Daunt said none of her clients have ultimately chosen travelling over other financial goals, some have opted to delay major purchases. She said she usually sees people negotiating within their new budgets to downgrade from a trip every year to once every two or three years, or from pricier international trips to smaller ones close to home.

“It’s hard, because we have the push from feeling burnt out and I would argue expecting vacations. We live in a country where we feel like, ‘I deserve to be able to have vacations,’ and there’s this other push on the home-buying side where there’s so much FOMO when it comes to home purchasing despite a bonkers overpriced market,” she said. “We’re still putting those expectations on ourselves.”

A strategy of making small regular contributions to a dedicated travel savings account can be an effective way to save for vacations without compromising other travel goals, she said.

For Ms. Akhvledziani Carew’s part, when she and her husband bought their home a few years ago after years of rigorous monthly savings goals that mimicked what they expected to spend on mortgage payments.

They also tapped their investments, and her husband sold a condo he previously owned. She said they did slightly less-elaborate trips, but their points strategy meant they didn’t have to cut back much.

“It was a different position we were starting from,” she acknowledged, but added later “you build your lifestyle around the thing that’s most important to you.”

Some money experts have insight on what helps the average American feel better about their financial situation – and it has little to do with a high income or assets. 

Emergency savings amount

Conclusion:

The investment adviser group Vanguard surveyed thousands of its clients about their financial situation, and found the strongest predictor of financial well-being and lower financial stress was having at least $2,000 in emergency savings. 

By the numbers:

Those who have at least $2,000 in emergency savings were associated with having a 21% higher level of financial well-being, versus those who didn’t have any emergency savings. 

Those who have an additional three to six months of expenses saved up saw an additional 13% boost in financial well-being. 

Dig deeper:

Additionally, those with an income of $500,000 or more saw a 12% boost in financial well-being. 

And those with over $1 million in assets had an 18% boost. 

RELATED: These cities have the highest percentage of ‘rich renters’ as housing prices rise

Financial well-being

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More perspective:

Financial well-being is a state wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow them to enjoy life, according to the Consumer Financial Protection Bureau. 

Dig deeper:

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Vanguard asked how often people spent thinking about and dealing with their finances, and found that those who have an emergency savings fund spent 2.5 fewer hours per week on financial matters. 

On average, those without emergency savings spent more than 7 hours per week on financial matters. 

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RELATED: Child care cost the most in these states in 2024, analysis found

Big picture view:

Most financial experts, including Vanguard, recommend having about three to six months of expenses accessible in an emergency savings fund. 

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The Source: Information in this article was taken from a Vanguard report, which analyzed data after surveying more than 12,000 investors of varying age, income and asset ranges. This story was reported from Detroit. 

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Start-ups and companies seeking scale-up funding no longer flock to the stock market as readily as they once did. Many bypass the high street banks too. The reason? They have other options thanks to the ready availability of different types of funding from private markets, at least for those businesses showing fast growth potential.

Private capital markets, which have grown significantly in recent years, offer services ranging from debt funding, seed and venture capital to minority stakes and full buyouts. 

Their efforts to rival public markets have been helped by bouts of volatility and illiquidity that have hit stock markets. The tougher life gets for listed companies, the more companies are tempted to go or stay private. Being on a public market comes with extra costs, the legal obligation to be fully transparent on all aspects of the business and the risk of a lifeless share price. Increasing numbers of listed companies are being taken private as their discounted shares make them easy prey. 

Ironically, one way for investors to tap into the growth and profitability of private markets is through investing in companies that use public stock markets to raise capital for their private funding operations. Intermediate Capital provides a range of private funding, spanning debt, mezzanine finance and private equity. Petershill Partners, whose parent is Goldman Sachs, provides capital and expertise to private capital managers.

Investment trusts have invested in private markets for decades, and range from Pantheon International, which specialises in private equity assets, to Scottish Mortgage, which allocates a proportion of its portfolio to unquoted companies. Lucrative returns are not guaranteed and it has become an increasingly crowded market, which brings additional risks. Investors should take care to avoid overexposure and to research the available options properly.

Intermediate Capital (Hold)