As Australia continues its vaccine rollout, the light at the end of the COVID tunnel is within reach. And as restrictions begin to ease, many people will have their sights set on one thing: international travel.
After a gruelling year of no dancing, working from home and of course, lockdowns, everyone deserves a getaway.
Whether it’s within your budget or you need some time to save up, there are things you can do to prepare your finances for the holiday you’ve been dreaming of.
Saving hacks for your holiday
The easiest way to prepare your finances for a holiday is to save up, and ensure you’ve got enough money to fund your trip.
If your savings account is looking a little worse for wear, don’t stress. Here are some ways you can kick it into gear:
- Cut the coffee. If you’re spending $4.50 on a morning coffee, and backing it up with a second after lunch, that’s nearly $50 a week on coffee - and that’s just on weekdays. You can save a whopping $2,600 if you just use the office’s instant coffee, or make your own at home.
- Sell your unwanted items. Have you got an old iPhone? Some high-end clothes you don’t wear anymore? An old set of weights, or a desk that you’re not using now that you’re headed back to the office? Hop on Facebook Marketplace or Gumtree, and sell them! Gumtree estimates each Aussie has more than $5,000 in unwanted junk, so take advantage of the booming second-hand market and pocket more cash for your trip.
- Axe the subscriptions. We know everyone loves Ozark. But you know what everyone loves more? A holiday to Greece. Trawl through your bank statements to find any platforms you might be paying a subscription to. Pause or cancel the ones you think you can live without.
If you’re wanting to get away sooner than you can afford to build up your savings, you could consider getting a travel loan to fund your trip.
What’s a travel loan?
If you’re dreaming of faraway adventures, but don’t have the funds to pay for your trip outright, a travel loan could be a great option for you.
Travel loans, also known as holiday loans, are a type of unsecured personal loan that you intend to use for travel. Essentially, a lender will let you borrow up to a certain amount - depending on your circumstances - and you’ll need to repay that loan over a length of time that you choose.
This type of loan is generally paid as a lump sum straight into your bank account, so you can start paying for flights or tours even before you leave Australia.
Having a personal loan can give you peace of mind while you’re overseas, knowing you can cover any extra costs that may arise - like medical expenses, or a few extra weeks away!
Consider rates and repayment options
You should also ensure your lender offers flexible repayment options to suit you. You don’t want to miss a repayment, or find yourself in a situation where you can’t afford to meet your minimum repayments, so make sure you discuss your options with your lender first.
The other thing to consider is personal loans usually come with fees, which you may need to pay upfront. Compare lenders to ensure the fees you’re being charged are reasonable and competitive.
Check your credit score
If you’re going to make an application for a loan, it’s a good idea to first check your credit score. This is the score that many lenders look at when you apply for finance.
While they don’t look at it in isolation, it gives the lender an idea of how likely you are to meet your repayments, and on time.
If you’ve missed bill payments, your credit score is likely to be lower. This could affect your ability to get a loan, so it’s a good idea to be on top of it before you apply.
You can easily check your credit score for free here at SocietyOne. Our credit score report will provide you with powerful insights, to see how banks and lenders view your score.
You’ll also gain access to nifty tips and tricks on how to improve your score. Check your score here.
Travel credit cards
Similar to a personal loan, credit cards can be a great way to ensure you have access to funds in the case of an emergency - or if you just want to extend your trip and don’t have the money to do it.
Most travel credits also come with other great features, like competitive exchange rates and fees, or complimentary travel insurance.
Before you lock in a credit card, you should compare the annual fees and interest rates from multiple providers.
Think about how often you’ll use the card. If you think it’s just going to be in the absolute worst case, and you’ll likely only use it once, you may want to opt for a no annual fee card. However, these cards often have higher interest rates, so it’s important you do your research.
I need to take unpaid leave for my holiday. How can I budget for this?
If you’re taking unpaid leave to go away, it’s a good idea to ensure you’ve budgeted not only for your holiday, but also the weeks until your first pay packet after you come home.
The best way to do this is to actually create a budget.
Print out a calendar and mark the dates your bills or debt repayments are due. Mark any events you have, and how much you think it’s going to cost to attend those events.
Add in any general costs like groceries and petrol.
Once you figure out your total, ensure you have enough money backed up to comfortably get by until your first pay packet upon your return.
If you’ve taken out a personal loan for your trip, but have other loans or credit cards, consider refinancing them all into one loan. This could help you lessen the stress of multiple repayment dates, and help you manage your debts.
It also gives you the opportunity to refinance to a lender that may be able to offer you a better interest rate on your debt.