Planning for a holiday
Whether you’re travelling interstate or internationally, be sure to plan for the financial aspects of your big trip.
Start saving
Whether you’re planning a safari through Botswana, backpacking in Vietnam or taking a gap year in London, your finances will probably take a hit. It’s better to save as much as you can before you travel. This could minimise the reliance on credit cards while you’re away and lower the risk of still paying off the holiday years after you return.
Some of the travel costs may include visas and passport charges, accommodation, entry fees to sights and activities, entertainment costs, emergency money, food and beverage, and roaming mobile phone charges and travel insurance.
Money management when overseas
Think about how you are going to access your money when travelling.
You could get a travel money card or talk to your financial institution about how you can access your money with your debit or credit card when travelling overseas.
With a travel money card you can load up with a number of different currencies. Better still, you can choose to lock in a currency’s exchange rate and potentially use the travel money card to make purchases online, in stores and to withdraw money at overseas ATMs.
Some cards allow only a single currency to be loaded, while others allow for multiple currencies. It is a good idea to shop around to find the travel money card that is right for you.
Minimising the risk of overseas travel
Check out our helpful hints to be sure your travel insurance offers appropriate protection:
- Type of activities planned – Check the classification in each travel insurance policy; what one insurer might define as ‘high-risk’ could be regarded as merely ‘outdoor adventurous’ with another. The insurance premium could reflect this difference.
- Personal belongings, baggage and specified items – The total sum insured, associated limits and excess amounts will determine the final premium. Have the right cover in place for your level of luggage.
- Any pre-existing medical conditions? If so, are they covered? Importantly, what documentation or evidence might be required to even obtain the cover, apart from what may be needed in the event of a claim?
- Age limits – Many providers do not impose age limits. However if coverage is needed for a minor (under 18), a parent or guardian may be required to include the detail as part of your application.
- Cancellation and/or delay – Ensure your nominated cover amount equals the full cost of your trip, plus any extras just in case you have to cancel the trip due to any number of reasons as prescribed in the policy, such as natural disaster, lost or stolen travel documents, pre-departure relative emergency, or missed flight connections beyond your control.
- Destination – The world is divided into travel insurance ‘zones’, and if the US is on your itinerary, there may be a bit more to pay for travel insurance given the historically high cost of medical treatment in this country.
What’s generally not covered
Apart from any pre-existing medical conditions, common exclusions could include loss or injury suffered due to:
- Acting intentionally or recklessly
- Belongings being unattended in a public place
- The influence of alcohol or drugs
- Undertaking ‘adventure activities’ such as mountaineering, sky diving or off-piste skiing
- Competing in professional sports
No two policies are the same. Investigation and comparison-shopping could save you a whole lot of grief – and money – if the unforeseen occurs.
For more information on travelling and safety precautions, see the Government’s Smart Traveller website. (http://smartraveller.gov.au/Pages/default.aspx)
Budgeting
Draw up a budget to see where your money will go and find ways to spend less on non-essential items. For example, look for savings in your:
- Entertainment costs
- Restaurant meals
- Takeaway lunches and coffees
Growing your savings
Once you’ve cut back on your spending, make the most of your savings. For example, there is an option of saving your money where it will earn interest, such as a term deposit or a savings account. These accounts could give you a higher rate of interest than transaction accounts.
