She's On The Money - Budget Ready...Set...TRAVEL!

Episode Date: April 2, 2024

Have you got the travel bug but feel anxious about parting with the money? Do you balk at setting a budget? Well never fear because today we'll not only explore how to set your budget before setting sail, but also discuss the often-overlooked aspect of budgeting for your return home, plus many more tips and tricks for your trip! Some other helpful episodes from our archives... Travel Savings Hacks Common Financial Mistakes For Travelers Travel Insurance Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements. The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs.  Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708,  AFSL - 451289.  See omnystudio.com/listener for privacy information.

Hello, my name is Natasha Nabanunga-Bamblett. I'm a proud Yorta Yorta, Kernai, Wolperi and Awadjeri woman. And before we get started on She's on the Money podcast, I would like to acknowledge the traditional custodians of the land of which this podcast is recorded on Awadjeri country, acknowledging the elders, the ancestors and the next generation coming through. As this podcast is about connecting, empowering, knowledge sharing and the storytelling of you to make a difference for today and lasting impact for tomorrow. Let's get into it. She's on the money.

She's on the money. Hello and welcome to She's On The Money, the podcast for people who want financial freedom. My name is Bec Syed and with me as always is Victoria Devine. I'm excited for this one. Excited? I'm exhorted. I think this is probably topical for a lot of people, this episode. Let's go.

And it's going to be very useful. So Bea, in 2023, approximately 7.27 million Australians travelled from Australia overseas. Slay. That's like all of Australia. No, it's not, but that's a lot of people. It's a lot of people. But as you dream of going on holiday and plan your next adventure, it's essential to prepare yourself financially for the journey.

That's why today we are talking about how to prepare for just that financially. Let's get ready because we want to travel. I'm excited. And we've had so many money diarists recently talking about travel. I feel like I've like sparked a new like interest in travel, which is really poorly timed because apparently traveling with a newborn is not that easy, but I'm probably going to do it anyway. So this is like me having done some research for me that I'm sharing with you guys.

The first thing I want to say, though, and I'm not saying you're going to hate me. It's just a confronting thing that not everyone agrees with. But I think it is the most responsible thing I can share with you. If you cannot afford travel insurance and you do not have an emergency fund when going overseas, you cannot afford to travel back. If you do not have the insurance that you need to cover yourself in the event of an emergency. I hope it's the biggest waste of money in the world. But if you don't have that, you can't go. And if you don't have an emergency fund to get out of any situation that you're in, we're not

saying like millions of dollars. We just need access to cash so that you can get out of a situation. Like say you travel to Paris, right? And you're like, oh, great. I got this backpackers hostel and it's really, really good. And you finally get there and you realize that like your roommates are really creepy and making yourself feel really uncomfortable. I need you to have enough cash to get out of that situation and if you don't put yourself in that position when traveling you can't afford to go so like that's the negative note that we're starting on but it's gonna get good from here because then we have all of our tips and tricks so I do apologize but I do think it's so important to just be like look I was a financial advisor I also would like to think I

have my head screwed on you might not agree and that's fine but at least I told you bye totally it's a tough pill to swallow oh it's not nice because you're often like already budgeting for so much and in the cosy lives that we're in right now you don't want to hear oh there's these other costs that you've got to allocate for sorry like we didn't think about these other costs but today beck we're not only going to explore how to set your budget before setting sale but also we're going to discuss the often overlooked aspects of budgeting for your return home so fasten your little sleep belt you're going to have to get over your fear of flying beck oh you can we're going to work on it that's so true okay sorry i've been watching yellow jackets that's a terrible

choice. But, V, we have done a few episodes in the past on travel and your finances. So we're going to link these in the show notes. A few just off the top of my head. Travel saving hacks, common financial mistakes for travelers, travel insurance. Sexy. But I want to talk about something that can be common for some people. Do you think it can be hard letting go of money on something like travel if you've been saving hard? Like, can it feel like a waste of money, which is a weird No, it totally can. So in like 2018, my two best friends, Steph and Rose and I, we decided to do Europe together. And so like we'd obviously planned it in advance and oh my gosh, like I just remember, I'm going to go find the spreadsheet for that because you and I both know that I was

meticulous in spreadsheeting that. So I want to know what the total budget is. And I cannot remember, but I remember it being so expensive. Like it would have been over $10,000 for this trip and that was individually like as in each because we spent six weeks in Europe so I think like 10 grand for a six-week trip nowadays is pretty good but this was 2018 so we had done a lot of saving anyway I remember saving saving saving and we went to a travel agent and we'd like set it all up with them because we're like we don't really know what we're doing and we want an itinerary for six whole weeks and you know we all couldn't decide on like where we wanted to go So we went to this travel agent, kind of brain dumped on her and said, sort it out.

Anyway, I remember when all of that was sorted and she was like, you're happy with all of that. Can I start looking it in? And we're like, yeah, yeah, let's go. Let's go. And she sent us an invoice via email to be like, this is what Steffo's Rose Victoria. And it was all the same. But I remember being like, wait, what?

I have to give you the cash? Like, oh yeah. I just had built up this level of safety, like a feeling of having cash to go and then realizing I had to give it away. and I was like, oh. Yeah. So yeah, like even I experienced that. I feel like when you're spending money on an experience, it does feel like if you can't see where all your money went at the end. Yeah. I mean, by the time we went on the trip, we had all fully paid for the trip. So nothing was outstanding. So that then felt good because we weren't having to cough up cash at every hostel

and every hotel. Oh yeah. Girl math. Like if you pay for it in advance, did you really pay for it? Totally. Totally. But it did feel bad, but I think it's really important to, you know, have your values aligned and go, you know, I do want to do this. And if it's a goal of yours, create that goal, save for that goal. And it can be really gratifying. Like I remember being on the trip, this was like sealed in my mind, right? We're sitting in this little park in France, we were in Paris and we were having a very frugal trip back and we had gone to a local supermarket and bought some like baguette and some cheese and I remember so vividly picking apricots because I was just like oh apricots in you know France for me for some reason that was really nice and I

bought these apricots and I'm sitting in the park on the most beautiful day and I was like I did this I got myself here I paid for this like amazing that feeling of being like wow I'm so grateful but also how cool and I took a picture of the apricot because I was like I need to remember this. Like it was just so weird, but I think it can also be so gratifying because you just know you've achieved this massive goal. Amen, sister. So cool, right? So what's the first step when we're actually planning to travel? We're back to the boring part. No apricots here, but we're going to set our budget. So unless you're obscenely wealthy, unrelatable, traveling without a budget is like embarking on a journey without a map. It might be like super exhilarating at first, but

you risk losing your way and just running around. You're not achieving much. Guilty. You need to understand if you're a luxury traveler or maybe like a budget adventurer, I was like a mix of both. Like I wanted the lux, but I couldn't afford the lux. Totally. So we compromised and stayed in hostels, but did more lux experiences, which I think, you know, there's always a level of compromise, but your budget is essentially your compass and steering towards the experiences that align with your preferences. So some people might say, I would never stay in a hostel V, like absolutely not, couldn't do it. Okay. Like, I'm not saying you have to do what I did, but like when I sat down and worked out what budget I had to travel and

how much I could save in the period of time that we were saving. And my friends were on very similar incomes to me at the time. So it didn't feel like, you know, one of us was significantly, you know, out earning and had higher expectations, but we had these conversations and it was like, all right well we don't really have the budget for fancy hotels or even hotels at all let's go find some really good like hostels that we could stay in and like our compromise was stay in a hostel but we want it to be private room like so we felt safe and so you need to understand that because that's going to be a major expense that will stop you from achieving other things while you're over there right so we did that knowing that we could have done the same amount of time

in really fancy hotels but we wouldn't have had very much budget for day-to-day activities yeah so we're like oh actually we would prefer to be able to go and do fun stuff every day and we kind of don't mind where we crash as long as we're safe yeah so i guess that leads into making sure that you're outlining your major expenses so first you'll have transportation and you need to when you're looking at transportation not just look at the plane flight there one of the things that stings a lot of people is the transfer from your airport to wherever you're staying. And that can also be a bit of a clunky journey. So unless you're a really lean traveler, like we had three girls that were getting off a plane after, you know, 24 hours plus traveling, we all had six

weeks worth of luggage that wasn't just going to go in a standard taxi, you know? So we had to work out, have we organized if we're catching a train and catching a train with two wheelie suitcases each. I regret. That was what was in budget, Bec, so we did it. But we were so grumpy. Like the day we arrived, we were all a bit salty, but that is okay. We need to work out accommodation, meals, what activities you're going to do, travel insurance, Bec, and any unexpected issues that you might encounter on your trip. Obviously, flexibility is key when making a budget. And while it's essential to have a roadmap, I want you to leave room for some level of spontaneity because you'll get somewhere and be like oh my god that's so cool I really want to

participate but if it's too locked and loaded you're not going to be able to do that so I would make sure that there's like a little bit of budget left for spontaneity and making sure that you can you know join in on a few things yeah obviously I also want you to consider a budget not as a restriction but more as a tool to enhance your travel experience it's a way to kind of ensure that you can savor every moment without worrying about your financial situation because there's nothing worse than going, oh, bitten off more than I can chew. And then you're anxious your whole holiday. I know. Absolutely not. That sounds like trash. Let's not do that. No. Let's just be really realistic and go, all right, we've got 10 grand. How far can we make this

stretch? Or I've got five grand or whatever it is. And these are big numbers. So there's a lot of privilege in traveling as well. But I also just want to be like, well, once you've got your budget, what are we doing with it? How is it going to work for us? How can we, you know, set in stone as many things so that, you know, Bec, once you get to this place, you're not like, oh, I didn't realize it'd be. Do you know what I mean? We just don't need that stress. So what's next?

So unnecessary. Unless you're going old school, phones are a vital part of our day to day, right? So when I am overseas, it's glued to me. I know it shouldn't be, should be hiding it, but I'm using it for Google Maps. I'm using it to look up a coffee shop. I'm using it to like get to my next destination. Take photos. Take photos.

goes. I'm using it to, you know, order Uber. Absolutely. You don't really want to be sprung with a huge phone bill while you're away. So check your list and check it twice. Because when I went to Europe, I was like, great. Like I had a phone plan that gave $5 a day international roaming, which gave me access to my existing data. I was like, great, that works for me. And I Googled it. Was it available in the locations I was going? Yep, absolutely. Every location I was going is available in. Great. No worries. Tick, tick, tick, tick, tick. But it wasn't available in the UAE. So we did a stopover in Dubai and my dumb ass went and turned my phone on and my girlfriends were like, oh, we don't have reception. I was like, don't worry. Just

tether to my phone. Oh gosh. $800 later. That's how much my phone bill was in Dubai because it I didn't have international roaming, but because I was like, no, it's fine. Like, I've got access to this. I just turned it on and started using it, but Dubai wasn't included. Oh, no. I talked my way out of it. I called. I was so apologetic.

I was like, I didn't know, and, like, I can't afford this. And then they were like, okay, no worries. And I think I ended up paying, like, $200 or something instead of $800. But, like, that was nice of them, wasn't it? That's really nice, but still. But phone plan. Understand it. You might find that getting a SIM card when you get overseas is the cheapest and best

option for you. It's a good idea. Another is, do you need to negotiate a new rate or plan with your service provider? So like you might want to switch carriers before you're going to make sure that you're getting the best bang for buck. So like there's lots of things to think about and plan before you go when it comes to like tech. Gotcha.

Okay. Okay. Okay. I'm liking it. You know, so far, nothing seems too out of reach. What's next? Nothing's out of reach if we have a plan, Bec. Yeah, 100% fee.

Sit down, nothing, not one thing. But we are going to want to have a think about how you're going to pay for things, the actual transactions. Like, are we going to go overseas with a credit card? Are you going to use a debit card? Are you getting cash out? Now, I certainly can't be trusted with one, but if you have a credit card, cards with minimal foreign transaction fees and travel perks can be a really good option.

Important though, before you travel back, call your bank. Let them know because red flag to them is seeing Bec buy a coffee in Melbourne one morning and then all of a sudden she's buying coffee in France. They're going to go scam, block your card, make sure Bec can't access her money because we're trying to protect Bec, but you need to call your bank and be like, hey, got some travel plans. If you see transactions from France, it will indeed be me. It will be me making transactions in France.

Good idea. I wouldn't underestimate the importance of cash. So some places might not have embraced the card revolution. So having a little bit of local currency is important and can be a lifesaver. I actually found this to be more true in the US than in Europe, because Europe seemed to be pretty across like tap to pay and credit card transactions and stuff. And I was in the US last year. If they're smaller businesses, like they don't have Apple Pay, like they take legit credit cards. And because I'm so in, I guess, the swing of just taking my phone places and expecting to pay. There were a few places that I got to that I went to like tap to pay and they're like, oh no,

you have to use like a real card. And I'd be like, sorry, what? I'm not carrying one. Like I left all of those in my hotel. Like I just use Apple Pay. So when you are traveling, having a number of different options can be really helpful. Also, I'm an anxious girly. Having a number of different cards has always made me feel really good. So if I'm traveling overseas, like I'll have my standard debit card, but I'll also have one with another bank and both debit cards that I carry in person never have access to my full amount of money. I'll always like just transfer $500-ish each time that I need to from my big travel budget over to that debit card. So if it gets lost and someone starts being tap happy, like I'm not losing, absolutely everything.

That's a really good idea. And, you know, if my card gets skimmed or something overseas, like they don't have access to, you know, all of my savings. They just have access to the money that I've given myself access to for like that day or those few days, you know. That's a very clever idea. Now, V, I am shocked to my core that I've only heard this word a few times peppered throughout this. I don't know, what's your favorite thing to talk about? Travel insurance. You're like, V, I'm so sick of insurance.

I am. But I am shocked and I'm kind of proud of you that you haven't brought it up more so far. Do you want to talk about it? No. It's all good. Thanks for bringing it up. Of course. But yes, I do really want to talk about travel insurance.

There she is. Yeah. It's so important. We had my friend Rhiannon Tracy on the podcast a while ago and thankfully she had travel insurance. But when she was 20, like if you've listened to the episode, you'll know the story. If you haven't, please go listen to the episode because you will see the value in travel insurance. Yeah, she dove into a pool in Bali and it was more shallow than she thought it would be.

And now she's a paraplegic. She's thriving. Like she's one of the coolest human beings I know. But that is one thing that you just can't foresee. She was 20. She was having the best time. She wasn't even partying or drinking. She was on just like a chill holiday with her mom.

Like you wouldn't expect that kind of outcome, right? Like you don't go to Bali and think, oh, hey, this is going to be wild. I'm with my mom. Do you know what I mean? So I think it's so important and so many people go, oh, it's not worth it. I don't bother with it. Like I think there's this automatic default that it's not about covering your person. It's about covering your stuff.

They're like, oh, I can't be bothered. It's so expensive. If I lose my phone, I'll just replace it. Whatever. I'll get a new one when I get home. Like it's actually more than that. It's actually not about your luggage being covered because I don't care about your luggage, Bec.

Yeah. Like, to be real brutal, if you lost your suitcase, great. We can replace that quite easily. It might be expensive. It's really frustrating. You know, you've got all your skincare products in there and that stuff adds up. Yeah.

But you haven't lost your life and your parents aren't paying $300,000 to have you airlifted from a random country back to Australia. Like, that's what I want you to be protected from. I want to make sure that if you need, you know, to be medically vacced from one location to another, it's not going to financially cripple you. I need to know that if something happens in a foreign country and you get hurt, you don't have thousands and thousands and thousands of dollars worth of medical bills. And you have heard how bad the American system is, right? That system applies to you if you are over there and you do

not have travel insurance. Same with every other, you know, healthcare system around the world. You might go, oh, their hospitals are good, but it's not really about that, is it? It's about getting you home safely because you can't just get on a normal flight yeah so yeah I've just got a lot to say about that obviously I want it to be the biggest waste of money in the entire world like I would love you to go v I travel all the time always get travel insurance never claimed on it what a waste I'll be like lucky you slay yeah like that's so good but make sure that you're when you start looking into this you're choosing a policy that actually aligns with your travel ambitions. So are you going to be like paragliding or skiing or scuba diving? You need to make sure

that your insurance actually covers these activities. So showing my privilege again, I have been to New Zealand to go skiing. That is a different country. I need travel insurance for that, but I need to upgrade my travel insurance to include snow sports because otherwise it's not included. And if I got hurt skiing, they'd be like, well, you didn't have that level of cover. Yeah. So make sure you are checking it because as I said before, it's not actually about protecting your belongings. I mean, it's nice to have as a little security blanket, but it's actually about your life. It's about making sure that you're in the best possible position. And I mean, the bonus of that is travel insurance usually covers things like flight cancellations, obviously medical

emergencies, but making sure that you have the right cover. Let's go to a break because I need to calm down. But if you don't have travel insurance, you can't afford to travel back. End of story. Bye. See you on the flip side of this break. Welcome back, everyone. So we're talking about how to prepare your finances for travel and you left us on a bit of a giant pill to swallow. So I hope everyone's gotten that down nice and safely. Nice and smoothly. Nice and smoothly. Yeah, nice and smoothly. Shut right down. So V, you have a few more things to say. I actually want to ask a question. Okay. Beck, have you ever been traveling and then spent every single cent in your bank account and had nothing left for when you

come home? Yes. So has Jessica Ricci. So have I. Like I feel like we've all done it, right? Totally. YOLO, I'm overseas, need to have the best time ever. Like I don't want to miss out on a thing, comes home and there's 27 cents in your account. You're like, worry about that later. It's a problem for another day. It's not. We're going to make sure that we're okay. We need to talk about budgeting for when you come home. It's so easy to get excited and swept up in the trip that you actually forget that you'll be coming home and have like bills to pay, life to pay for. You actually have to put food on the table still. Really boring when you get home that you're not eating baguettes under the Eiffel Tower, but you actually have to go to the supermarket and stock

up your fridge because you've been away for a while and that costs money. And often we come home and we don't have that money. It's so important to, I guess, acknowledge that every journey, it's going to come to an end and returning home, yeah, there's going to be some financial consequences. So first things first, I would make sure that I understand what my like bills or rent or mortgage and other related costs are going to cost us. It's super tempting to focus on, I guess, just the adventure, but returning to a financial mess can obviously dampen the post-holiday glow. We want to keep that going as long as possible. So set aside a portion of your budget to cover these impending costs Gabby who is on the she's on the money team she's just got back from a

massive Europe trip and she had a really cool few tips for me when it came to budgeting because obviously we like talk about it off air as well and she was like one of my favorite things because petrol sucks when you get home you've probably got an empty tank yeah she said I always make sure that I fill my car full of fuel before I leave for a trip so I have a full tank coming home. And she said, and sometimes I'll buy myself like a hundred dollar fuel gift card, pop it in the center console. So when I come home, I know I've got the fuel in there and I'm not going to have to pay for fuel for a little while. Isn't that smart? Like I feel so much less stressed coming home to, oh yeah, actually I've got money for that and I can't spend it on anything else

either. And she said, making sure that she has like some non-perishable items in the pantry. So making sure she's got some pasta and some tomato paste and like some stuff that she can make some dinners with without having to go to the supermarket because obviously you're like I don't want to split with more food you could prepay some of your bills so if you know our quarterly we pay xyz why don't I just call up and ask what you know an indication of my next bill is going to be they might go it's 150 you go all right I'm just going to put 150 on the account so that when that bill comes it's not going to sting as much like let's take so much pressure off ourselves. Same thing with like rent and mortgage, like make sure that that is allocated.

Have a think about, I guess, baggage fees as well. Like what if you really like shopping, Bec? Are you going to get stung at the airport on the way home when you have next to no money because your bags are real heavy? Make sure that we're thinking about this. Like I know that when we go overseas, you'll be like, but I have 23 kilos. Do you know how easy it is to go over that 23 kilos? You've been collecting souvenirs the whole way home. And then they're like, yep, so your bag has come over. That's just $180. And you're like, sorry, what? Yeah, that's a good point. I don't have $180 and I don't want to throw my stuff out. That's a very good point, V. Obviously, we need to plan for these expenses in advance to make sure that there's like a

little smooth transition home and we're not stressed and we just get to continue our holiday glow. I love that. This is kind of off topic and maybe irrelevant for a lot of people, but really quickly, there's this freezer hack where you put a coin on top of like an ice cube or something to see if I've seen that online. Sorry, I was trying to swallow some of my oat latte, which I definitely shouldn't have while we're recording. But isn't that smart? If you are going to put meals in the freezer, you know, maybe there's a blackout or something and you want to see if the food's been unfrozen, then refrozen. Yeah, you put a coin on the top of a frozen cup of water. And if you get home and the coin is still on top of that piece of frozen ice, we're all good. Freezer didn't turn

off. Yes. But if the coin has melted through and is now at the bottom of the cup, well, your whole freezer has been defrosted and refrozen while you're out. Exactly. Also, it's a bit of a money saving hack because you can chuck a couple of coins on there. You forgot they existed. Put 50 bucks in the bottom. Yeah, exactly. Genius. So I guess that kind of does it. But is there anything else? Look, I think it's really important that when you're spending your hard earned money and taking some time off, we want to savour all of those moments. So making sure that you're not coming home to a financial stress that takes the shine away to me is really important and making sure that you're covering yourself and budgeting for everything is going

to make it just the holidays better you're gonna have so much more fun if you know you're not under any financial stress like no one wants to come home to a financial mess and we don't have to if we plan well back and we can do that that's very easy all right i think that's all we have time for today i think that's a pretty good episode and a good place to leave it we're so smart have a good week guys we will see you on friday bye guys the advice shared on she's on the money is general in nature and does not consider your individual circumstances she's on the money exists purely for educational purposes and should not be relied upon to make an investment or financial decision if you do choose to buy a

financial product read the pds tmd and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN 321 649 27708 AFSL 451 289.