The Joy of Going Places!
You can afford to splurge a little on a nice hotel room and make up for all the restaurant meals you missed during the lockdowns. It’s no big deal!
Fit Travelling into Your Life Plan
Australians love travelling and most of us cannot imagine life without it. It’s what we work for and how we recharge; it opens our eyes to diverse cultures and gives us perspectives and life stories that we can share for a lifetime over a drink at the pub.
That’s why travelling is one of the most common life goals for many people in Australia and 2023 is expected ot be a big year for international travel.
Photo by Alexandr Podvalny
Travel is so important to Australians, in part because of the tyranny of distance and partly because so many of us have immigrant roots. So much so that 69% of young Australians believe that travel is important for their self-improvement (Reach Foundation report).If travelling is important to you, it needs to feature on top of your core values. You want to make it a priority so your money can support it.
Otherwise the money you spend on travelling will keep eating the funds you’re saving for your other “money goals”, such as buying a property or retirement.
In truth, there are no money goals.Behind every money goal, there is always a life goal with clear emotions attached.
Let's say Lucy wants to buy a house because she craves security, and Jeff is saving to get a second degree so he can inspire his children to pursue their passions.
How accomodate travel with these goals?
It is only when you consider travelling as a life goal will be able to make room for it in your life and your budget.
Budget Yearly and Relax
Most traditional budgets can sabotage your relationship with money. They tell you what to do and, most of the time, what not to do. Budgeting can end up becoming a time-consuming exercise that does little more than add new worries to old ones. A well-constructed budget instead, is a great stress-relief tool and won’t leave you feeling frustrated or restricted..
Start with an annual plan and spread your total expenses over 12 months.
Set aside some money from each payslip for the big outgoings, including your travel ones. Better yet, open a dedicated account for each of them.
The advantage here is that you won’t have to scramble to find the money for your next holiday – it will be sitting right there in your holiday account, ready to be accessed when needed.
A key component of this strategy is to track how much you spent on your previous trips. You can do this by reviewing your old bank and credit card statements or by keeping a travel spending journal.
This way you can identify what didn’t return as much value as you expected or where you could have spent less. For example, that time you got stuck in a taxi during Bangkok's rush hour, while you could have enjoyed a much cheaper and much more fun tuk tuk ride instead.
Planning small things like this may seem unimportant, but it can be a big shift. An annual plan makes you feel in control before, during, and after your trip. Knowing that you’re not making any sacrifices or trade-offs will let you enjoy your holiday even more.
Avoid the "Pay Now, Worry Later" Mentality
Sure, we’re all up for spontaneity. But you shpould also know that constanlty wondering if you're spending more than you should creates unnecessary stress. And the one thing you shoud keep your travels free of is money stress!
It helps you stay in the present moment when you don’t have to second-guess if you’re overspending every time you make a payment.
That's key to avoiding the dreadful moment of going through your credit card statements and realising you’ve spent ‘way too much again’.
Photo by Anastasia Shuraeva
Get Travel Insurance
According to the Australian government’s website Smartraveller and the consumer group organisation Choice, there are several reasons to get travel insurance:
Holidays don't always go as planned
Think about medical expenses, trip cancellations, delays, stolen items or documents, lost luggage or big events like natural disasters and terrorism.The Australian government doesn’t cover your medical bills
If you end up injured or sick while overseas, you'll be footing the hospital bill and the cost of flying home (which could be thousands of dollars).Some countries won't let you in if you don't have insurance
Cuba, Turkey, the Czech Republic, the United Arab Emirates (UAE) and Qatar are some of them. All 26 European countries in the Schengen Area ask for one when you apply for a visa. Some cruise ships won't allow you to board without insurance, either.Reciprocal agreements don’t cover everything
Australia has reciprocal healthcare agreements with several countries. With Medicare, you can get subsidised treatment for essential services in these countries only. But if you happen to fall severely ill, travel insurance can pay for a medical escort to bring you home to Australia from anywhere in the world.
Hopefully, you’ll never have to claim on your travel insurance. But its more likely than you might think—research from Smartraveller found that one in four Australian travellers experienced an insurable accident on their last overseas trip.
Types of travel insurance policies
There are many travel insurance policies to choose from: basic, comprehensive, complimentary credit card travel insurance, and more.
Before you choose one, check the list of extras and make sure you’ll be covered for your circumstances. For instance, if you travel with an expensive camera, make sure the policy covers its entire value; if you are planning a relaxing holiday, simply untick the extras for extreme sports.
A note on Covid-19 insurance cover
Some travel insurers now offer limited cover for COVID-19 if you, or someone you’re travelling with, tests positive for the virus. But there are several restrictions you need to consider, including if the country you’re travelling to is on the list of the government travel bans.
To find out more, see the CHOICE travel insurance buying guide: COVID-19 edition.
Photo by Roman Odintsov
Travel insurance also ensures you don't have to interrupt your trip in case of a minor accident or theft. I’m sure you don’t want your holiday to end sooner than you planned!
With travel insurance, you buy peace of mind, which ultimately makes your trip more enjoyable.
Build an Emergency Stash
Your insurance policy might not cover some events, such as fines, legal expenses, or the untimely illness or death of a family member. All of these are situations that might require you to end your trip sooner or travel somewhere else. For these and any other surprises you might meet along the way, you need an emergency stash.
“How much should I put aside?” , you might be wondering. As with most things in personal finance, there are no one-size-fits-all answers, but an emergency stash holding three months' expenses is a useful benchmark. Work out how much you spend each month and multiply this amount by three.
An emergency stash gives you further reassurance you’ve got all bases covered, in your everyday life as well as during your travels.
Take Off and Land with No Regrets
Say no to post-travel blues, credit card regrets, and the months of denisl. It’s time to change.
At Life Sherpa, we believe you can live the life you want with the money you have.
Follow the steps in this article, starting by aligning your money with your values. In no time, you’ll reach your most important life goals - including those who take you around the globe in awe of its wonders.
Francesco Solfrini
Writer
For 15 years, Francesco has approached communication from various angles: client-side advertising manager, agency account director, freelance photographer and content writer. Working for several global and Australian finance brands (Morningstar, CBA, American Express, uno Home Loans, OFX and InvestSmart) he has learnt to understand how people save, spend, invest and feel about their money. Today, Francesco develops online content that addresses the real needs and aspirations of Australians when it comes to personal finance.
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