How can you afford to travel?
Can you travel cost-effectively without breaking your bank?
I have asked a financial expert and writer, Tatiana Day, to help us save for a holiday.
Take it away Ms. Tatiana from Down Under!
Simple Tips to Save for a Holiday
Let’s face it, we all need holidays. Whether you’re planning to pitch a tent in the bush or put your feet up in Hawaii, it’s important to give yourself a breather every now and then. However, in between loan repayments, schooling, and other financial commitments, saving can be harder than you think.
Of course, you can always use your credit card – but is going into debt worth it? The truth is, many Aussies are funding their adventures this way. What’s more, some are taking more than 12 months to repay their debts. From luxury accommodation to upmarket restaurants, to shopping sprees, it can be easy to accrue debt while you’re overseas.
However, if you choose to pay for your holidays this way, it is important you consider having a solid repayment plan in place. But if not, you’re running the risk of falling financially behind – and even jeopardising your future holiday plans.
While it’s true many of us end up coming back from traveling with debt, it doesn’t have to be the case. Before we look into how this works, it’s worth getting a little perspective.
How does the average Australian finance their holiday?
How do you compare to the average holiday-goer? According to a recent survey, it was found that 9.4% of Australians take out a personal loan or use a credit card to finance their holidays. The survey also found that the majority of Australians (65.3% of survey respondents) use their general savings, while 20.2% utilise a special holiday fund.
When it comes to retirees, a growing number of Australians are dipping into their superannuation savings to fund their trips. Instead of conservatively using their super to fund their lifestyle in their later years, they’re taking out lump sums and going abroad.
Whatever category you fall into, it’s safe to say travel is an important part of the Australian lifestyle, with many of us willing to go into debt or sacrifice spending money on other areas of our lives.
Easy ways to save for your holiday
If you’re wary of racking up too much holiday debt, it’s time to come up with a savings plan. Here are three things to consider.
- Cutting down on living expenses
Have you ever properly looked into what you’re spending money on? From eating in more to canceling unnecessary subscriptions, you’d be surprised how much money you can potentially save. Here are some (of many) simple ways to cut down the costs:
- Use public transport
- Decrease your credit card limit
- Reduce mobile phone bill
- Invest in energy efficient home features
- Cancel unnecessary subscriptions (do you really need Netflix, Stan and Presto Foxtel?)
- Cook at home rather than ordering in
- Limit any impulse shopping
- Cut down on consumable habits (e.g. smoking and drinking)
- Set up a high interest, long-term savings account
Once you’ve created a budget and cut down on living expenses, it’s time to watch your savings grow. From simple online savings accounts, to compound interest accounts, there are many options available.
Chat to your bank about what strategy will best suit your savings plan. Don’t forget to ask about account keeping fees, interest rates, and minimum and maximum deposit amounts.
- Saving money while you’re on the holiday
Even with your savings set aside and ready to go, it’s still important to keep an eye on your wallet when you’re on holiday. Let’s face it, there’s nothing better than a holiday bargain! Here are some ways to keep your spendings to a minimum:
- Use public transportation
- Walk around more, you’ll discover so much more this way, too
- Pack your student ID or seniors card
- Buy food from supermarkets
- Skip the souvenirs (experiencers are better!)
- Take overnight train or ferry trips
- Stay away from the airport express
- Use free Wi-Fi
There are many other ways to save on travel costs. It will depend on where you’re going and what your interests are. But to make the most of your finances, make sure you do your research, start saving now, and come up with a financial plan to suit your holiday needs.
**Post contributed by Tatiana Day. Tatiana is a dedicated mum of three beautiful children who keep her on her toes! As Head of Corporate Affairs at Real Insurance and with a background in PR and journalism across Financial Services she is keenly interested in the evolving life of the modern Australian family and the pressures put on it. When she can find some downtime, Tatiana enjoys cooking, music and breathing in the great outdoors.**