How can you avoid the travel money mistake Commonwealth Bank says is costing Aussies $4.6 billion?
On the official list of things Aussies love to do most, travelling ranks right up there with ditching Prime Ministers and talking up the quality of our coffee.
In fact, recently released figures from Roy Morgan reveal that 68.3%, or roughly 14 million Australians aged 14 and above are planning on taking a short or long term vacation in the next 12 months.
But while would-be travellers may have no issues organising an overseas adventure, new research from the Commonwealth Bank has shown that Australians do have a problem when it comes to travel money organisation - one which is costing the country billions of dollars every year.
The research revealed that Australians are frequently heading overseas without an adequate spending plan, with 58% of travellers overstretching their budgets by over $1,554 per person - or a whopping $4.6 billion as a nation each year.
Michael Baumann, Commonwealth Bank’s General Manager for Everyday Banking and Payments, urged travellers to plan ahead by thoroughly researching their likely overseas spend before leaving home.
“Despite advice from family and friends and budgeting tips and tricks for travellers online, over half (55%) said they made an educated guess when working out their holiday spending money,” he said.
“Even more concerning was that a third (33%) aren’t putting aside extra spending money for unexpected expenses or overspend.”
Among the largest concerns, the Commonwealth Bank reported that 21% of Aussie travellers fly off without having a travel budget in place, while 15% admitted that they don’t plan for regular expenses while they’re away like rent and utility bills.
So if you’re busy planning a quick winter escape or a long-term summer holiday, what can you do to best ensure that you don’t return home with a holiday budget blowout? Here are four tips to keep your finances in check while you’re away:
4 overseas travel money tips
1. Set up a holiday budget
While every day overseas will be different when it comes to how much you’ll spend, that doesn't mean you can’t do your research beforehand and set a rough spending limit for each day - or your trip as a whole. You might not need to account for your flights and accommodation if they’ve already been booked, but do budget for all your fun day to day needs like food, drinks, souvenirs and activities like tours and entry to museums and galleries.
Even if you do go a little bit overboard once in a while, at least you’ll have a figure in your head that will allow you to adjust your spending to rebalance that budget.
2. Get your travel money mix in order
Whether you’re planning on using cash or a travel money card, debit card or credit card, having the right combination of payment options at hand will be crucial, especially if you’re travelling to multiple countries. That way you’ll be covered for different currencies, local customs (like not accepting cards) as well as having a back up plan in your pocket in case something goes wrong.
But given the potential cost difference between travel money options, how can you make sure you’re not adding more than you need to to your holiday spend in the way of fees? A travel money card with no fees or a low rate could be your best option, so start your search with our list of 2018 Mozo Expert Choice winners.
3. Automate your bills back home
As the Commonwealth Bank reported, 15% of Aussie travellers admitted to not automating their everyday expenses while travelling abroad. But the last thing you’ll want to see while you’re overseas, aside from your plane or bus heading off without you, is an email from your electricity provider telling you your payment is late or a notification that your bank account is overdrawn.
So to avoid waking up to any stomach churning emails, make sure you’ve budgeted the money to take care of everything from your rent to your Netflix subscription while you’re away and ensure that you automate any regular transfers before you leave.
4. Cover yourself against expensive mishaps
While your pre-travel excitement is probably going to be channelled into into booking accommodation and activities, that doesn’t mean you should neglect the other essentials. Having a travel insurance policy up your sleeve could help you in a range of scenarios from lost luggage and delayed flights to medical mishaps. After all, you don’t want to add to your holiday costs by having to shell out for new clothes or a hefty medical bill when you don’t need to.
The good news is that travel insurance doesn’t have to break the bank. According to the Mozo travel insurance comparison tool, a couple (both aged 33) heading to Europe for three weeks over the Australian summer could pick up a comprehensive travel insurance policy with unlimited overseas medical and hospital cover from $166.
For more top money tips to avoid post-holiday headaches check out our range of travel guides, or compare all the winners of the 2018 Mozo Experts Choice Travel Money Awards for a great card option to take with you.