A nation of over-spenders and under-budgeters: Our worst money habits while travelling revealed
When it comes to holidays, Aussies stomachs are bigger than their budget with a third (36 per cent) admitting they don’t have a holiday budget, a quarter saying they have spent $500 more than they planned on holiday before, and a further third (37 per cent) splashing cash on wining and dining.
Leading credit card comparison service comparethemarket.com.au surveyed an independent, nationally representative panel of 1,855 Australian holiday-goers to gauge their financial habits before, during and after a trip away.
The research showed that only half of us (52 per cent) bother to calculate how much we need to save for a holiday and then plan a budget in order to reach our savings goal.
Even when people take the time to work out their holiday spending money, the majority (58 per cent) said they had blown their budget when away, using their credit card or taking out extra cash.
More than one third (34 per cent) had over-spent by around $200, and a further 25 per cent said they have over-spent by more than $500. Whilst eating out and drinking were the main culprits, the cost of local attractions (25 per cent) closely followed.
Abigail Koch, consumer advocate and spokesperson for comparethemarket.com.au explains that when in a holiday environment it is easy to develop a more frivolous attitude to spending. Money, especially foreign currency, can lose its true value and become a bit like ‘monopoly money’.
“Latest figures show that Aussies over-spend by more than $900 million on international travel each year. Though it is great to get in the holiday mood, splashing the cash while away can lead to a serious financial headache when you are back in real life,” said Abigail.
Younger age groups were the most disciplined with creating and sticking to a holiday budget to avoid going into the red. Almost three quarters (71 per cent) of 18 – 24 year olds worked out how much they needed to save, and only 6 per cent didn’t plan ahead with their holiday expenses.
Boomers (over-50s) on the other hand aren’t big budgeters, with a third (32 per cent) of 55 – 64 year olds turning to their savings account to pay for a holiday. Only half (53 per cent) made a conscious effort to save up and stick to a budget.
Additionally, 36 per cent of Boomers spent $500 over budget, with most of the costs going towards eating out and drinking (41 per cent).
“With many families travelling over the school break, it’s essential for Australians to have a holiday budget, keeping in mind the additional cash they may splash on unexpected activities. If you are heading overseas then there are certain payment options that are better value for international spending and can help you keep on top of your budget,” Abigail explains.
Comparethemarket.com.au’s top travel tips for spending while abroad:
- Consider a travel money card: This is an especially convenient and easy way to buy foreign currency and take it abroad. Travel money cards are debit cards that you can load up prior to travelling. There are two main advantages to taking a travel money card – firstly, by pre-loading the card with your choice of currency, you can choose to do this when the exchange rate is strong. Secondly, you can reload your card or even change currencies as you travel without any additional charges.
- Look out for foreign transaction fees: Many credit cards can provide better exchange rates than currency exchange booths. To make the most of this rate, it’s crucial to look for a credit card with no foreign transaction fees before heading on holiday. For example, Bankwest provides a range of cards that don’t have transaction fees on both online and overseas purchases.
- Reap the rewards and bonuses: A number of credit cards offer a variety of rewards for spending. This is a great way to reimburse your expenses by exchanging points for hotel rooms, flights etc. A few cards also offer sign up bonuses such as access to airline lounges.
- Check if your card offers complimentary travel insurance: It’s crucial to be covered by travel insurance before heading off on an overseas trip. Many credit cards offer complimentary travel insurance, which can be a great way to save, but make sure you understand exactly what you’re covered for as you don’t want to find out your policy isn’t as comprehensive as you thought when you go to make a claim.
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 Commonwealth Bank travel research 2016: https://www.commbank.com.au/guidance/newsroom/Aussies-overspend- by-900M- on-holidays-201612.html