Travel is the only thing you buy that makes you richer so the saying goes. Anyone who's recently been on a holiday will likely agree.
But travel can also break your bank account and max out your credit card(s). Any trip, even a budget one can be expensive and scraping the funds together for a European jaunt or a round-the-world gap year takes planning and commitment - especially if you're young, just starting in your career and don't have a big take-home salary.
If travel is something that's top of your wish list for the year, here are some tips on how to save for it.
You don't have to be independently wealthy or extremely lucky to make your travel plans a reality, but you do have to plan. Decide on where you want to go, for how long and when. Then research your best options for flights and accommodation and the activities you want to do. This will give you the basis for a travel budget: how much you need to get there and while you're away. It's good to build flexibility into your trip, but the more you can plan in advance, the more likely you are to avoid budget blow-outs while you're travelling.
2. Fund it
Once you have an idea of how much you need to save, you then have to get the money together to pay for it.
Your general choices are:
- Find new income streams to fund the trip
- A mix of all or some of these.
If you're thinking of taking out a loan or using a credit card, make sure you will be able to pay them off when you get home. Shop around for the cheapest way to borrow money and don't get yourself into unnecessary debt. Travel is usually cheaper the longer ahead you can book it, so give yourself time to get the money together. Last minute usually means more expensive.
If you're not already in the habit of saving, then planning for an overseas trip is the perfect reason to start. Putting your savings into a high interest account will make your money grow faster. You might also choose to pay down any debt. To calculate how much money you can save you'll need to prepare a budget. Setting up an automatic transfer to a savings account every time you get paid is a great way to start.
Put together a spreadsheet of your outgoings and income and see where you can save money. Set some targets and do your best to meet them. Keeping to a strict budget can feel dull so stay focused on the outcome when you feel tempted to splurge.
Get more budget advice and a great budgeting app here.
5. Speak to an expert
You may need some help getting your finances organised for your trip. If so, consider talking to a financial adviser.
Finally make sure you have travel insurance before you leave and money put aside enough to cover the unexpected while you're travelling. Peace of mind on any trip is priceless. Bon voyage!
This information is current as at 27/01/2015.
BT Financial Group - A Division of Westpac Banking Corporation. This document provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information does not constitute financial advice. It has been prepared without taking account of your objectives, financial situation or needs. Because of this, before acting on this information, you should consider its appropriateness having regard to your objectives, financial situation and needs. Information in this blog that has been provided by third parties has not been independently verified and BT Financial Group is not in any way responsible for such information.