We have all had the feeling. You step off the plane from Bangkok still buzzing, images from your holiday flitting through your mind?the Parthenon, Big Ben, the Eiffel Tower.
What a trip? you are not going to kiss the tarmac or anything but it?s good to be home! You post the final selfie to Instagram on your mobile but as you flick back to the home screen you notice your banking app. A nagging thought disturbs your post-holiday reverie.
You haven?t logged on since you left Australia. But it was all so slick. The days of sewing travellers? cheques into your pants and wiring FedEx cheques around the world are long gone. Even the little Thai fishing village had a workable ATM that pumped out baht. And pretty much everywhere accepted your credit card. Luckily you extended the limit before you left, all it took was a few clicks. You also vaguely remember setting a daily budget?that didn?t last long. But hey, you?re not in Rome every day of the year.
Hang on though?you did hit it pretty hard in London?s West End. And then there were the five days at the Airbnb near Lake Como. After all, if it?s good enough for George and Amal, it?s good enough for you. Come to think of it, the previous week scooting up and down the French Riviera wasn?t cheap. And way back at the start of the trip those Sangrias in Barcelona kept on coming?
Slowly your heart sinks and you close the screen down, hastily shoving the phone back in your pocket. It can wait another hour at least, at least until you?ve got home and brewed a strong cup of coffee.
You?ve heard of jetlag, now brace yourself for debt-lag
We know how to avoid jetlag. Stay hydrated, get as much sleep as possible and go easy on the complimentary inflight beverages.
But what about debt-lag? You don?t want to arrive back home with a spring in your step but a hole in your wallet.
And it doesn?t have to be the trip of a lifetime. Even if it?s just the annual family holiday down the coast, it?s all too easy to let your spending get out of control.
Here are a few tips you might want to consider that could help you avoid a travel debt hangover.
Budgeting tips before you go?
- Pre-pay the big-ticket items.?Look for good deals and pay in advance for flights, accommodation and tours. The more you can pay for before you go, the less you?ll have to pay for at short notice with a potentially hefty local mark-up.
- Do your homework on fees and charges.?You may want to give yourself a choice of how to pay?a debit card with lower fees, a pre-paid travel card so there are no surprises and a credit card for emergencies.
- Work out your holiday budget.?Think about how much you?re willing to spend?it could help to set a daily limit and an overall limit (and stick to it!). Sometimes your choices about where to travel and where to stay can have a knock-on effect. If you?re based on a resort island or in a small hotel room with no kitchen facilities it could be difficult to source reasonably priced groceries and save money on food.
Budgeting tips while you are travelling?
- Keep track of how much you?re spending.?If you?re good at budgeting, there?s no reason to let things slide just because you?re on holiday. And if you?re not so good at budgeting, a holiday could be the ideal time to start getting into the right habits.
- Use the right card.?Pre-loaded travel cards are getting more popular and mean you don?t have to stress about the exchange rate. Credit cards are convenient but represent temptation. If you?re going to use credit, make sure your card is appropriate for travelling. Some cards charge an international transaction fee as well as not giving you any control over your exchange rate.
- Make smart choices.?Sometimes local merchants will give you the choice of paying in the local currency or Australian dollars. Converting to Aussie dollars could cost you more as you may not get a favourable exchange rate.
Budgeting tips when you get back…
- Pay off your credit card as soon as you can.?Be wary of minimum repayments?this only drags out the debt for longer and increases the overall interest charges. If you can cut back in other areas you could potentially pay off your credit card debt earlier and avoid paying interest.
If you are looking at budgeting for a holiday, we can help you manage your money more effectively.
Article provided by Andrew Julius, Financial Planner and partner at PSK Financial Services.
Living in Avalon with his Brazilian wife Flavia and three children Stella, Sophia and James, Andrew and his family embrace the lifestyle that the Northern Beaches provides with Andrew apportioning his time between his Avalon base and CBD office. With over 20 years’ experience in the Financial industry,?Andrew provides individuals, families and business owners with the clarity that they need to meet their financial and lifestyle goals. He specialises in providing high quality, unbiased financial advice, across a wide range of areas; including family protection, budgeting, wealth creation, investment management, all aspects of superannuation including SMSF, and pre and post retirement planning.