Category: Money Matters
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Sub category: Spending
27 October 2014

Money tips for life’s big milestones: taking a gap year

Thinking of taking a year off from work or study? While you may have a dream trip in mind, a little preparation can help ensure you have the financial resources to make it a reality.

  • Do your research:  Investigate the cost of living and the cost of experiences in each of the destinations on your list. Some countries on your wishlist may be more expensive than others, so be ready to compromise if necessary. For example, you may decide to reduce the length of your trip or choose less expensive destinations if you think your budget won’t quite stretch.
  • Save: Once you have an idea of how much you’ll need, set yourself a savings goal and make regular deposits into a high-interest savings account to help your money grow. A savings calculator can give you an indication of how long it will take you to reach your goal, and help you work out how much you need to save within a particular timeframe.
  • Cut back: Look at reducing your current living expenses where possible so you have more money to spend on your gap year. For example, review your direct debits and cancel any subscriptions or services you no longer need. Look back at your transaction history over the past few months and take note of your spending habits. Be aware of any spontaneous purchases which, in hindsight, you could have said no to.
  • Think ahead: While it’s tempting to focus on your travel plans, remember time flies when you’re having fun. So, consider putting some cash aside now to tide you over, and cover things like a rental deposit and immediate living expenses for when you return.
  • Invest in peace of mind: Make sure you take out travel insurance to cover you before you go. It might seem like an additional expense when you’re trying to cut back, but it can help give you peace of mind and potentially save you a lot of money if things go wrong.
  • Manage your money wisely: Once you’re on the road, take note of how much you’re spending. Be aware of ATM fees when withdrawing cash overseas, and stay aware of charges associated with credit card payments. Think about downloading your banking app onto your smartphone so you have easy access to your balance, and make note of any credit card repayments or other financial commitments you still need to take care of while you’re travelling.
  • Look out for free activities: Rather than costing a fortune, some of the world’s best museums, experiences and attractions are actually free – so keep an eye out for opportunities to explore when you’re on a budget. In addition, some attractions offer reduced rates during off-peak hours.
  • Stay in touch on the cheap: Make the most of Wi-Fi hotspots wherever you go; many coffee chains increasingly offer wi-fi so if you can, save non-urgent communications for your coffee break.  Before you go, consider downloading some apps such as Skype, Viber or What’s App so you can share photos and keep in touch with friends and family back home on the cheap.

The information is current as at publication. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Deposit products, savings products, credit card and home loan products are issued by ING, a business name of ING Bank (Australia) Limited ABN 24 000 893 292, AFSL and Australian Credit Licence 229823. ING Living Super (which is part of the ING Superannuation Fund ABN 13 355 603 448) is issued by Diversa Trustees Limited ABN 49 006 421 638, AFSL 235153 RSE L0000635. The insurance cover offered by ING Living Super is provided by Metlife Insurance Limited ABN 75 004 274 882, AFSL 238096. ING Home and Contents Insurance is issued by Auto & General Insurance Company Limited (AGIC) ABN 42 111 586 353 AFSL Licence No 285571 as insurer. It is distributed by Auto & General Services Pty Ltd (AGS) ABN 61 003 617 909 AFSL 241411 and by ING as an Authorised Representative AR 1247634 of AGS. All applications for credit are subject to ING's credit approval criteria, and fees and charges apply. You should consider the relevant Product Disclosure Statement, Terms and Conditions, Fees and Limits Schedule, Financial Services Guide, Key Facts Sheet and Credit Guide available at ing.com.au when deciding whether to acquire, or to continue to hold, a product. Before interacting with us via our social media platforms, please take a minute to familiarise yourself with our Social Media User Terms https://www.ing.com.au/pdf/Social_Media_User_Terms.pdf.

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