How to find the money for that holiday

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This was published 14 years ago

How to find the money for that holiday

A trip to Greece need not be out of the question if you have the right funding plan.

A trip to Greece need not be out of the question if you have the right funding plan.Credit: AFP

The piggy bank might be a bit depleted but you still want a holiday. And, judging by the results of recent surveys, you will probably find a way to take one. Australians continue to prioritise travel, with research showing the economic downturn has had limited impact on travel plans (see panel, right).

One way of finding the money for a holiday in tough times is to look for ways to spread the cost of your trip.

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Instead of forking out hundreds or thousands of dollars in one hit, you can often break it up into chunks over several months, or more.

Adventure travel operator Kumuka Worldwide has recognised an opportunity, with a new payment plan allowing travellers to pay for their trips in monthly instalments. There are no financial penalties for paying this way, making it a useful way to spread the cost (the final balance must be paid 60 days prior to departure).

It will be interesting to see if other companies follow suit but, in the meantime, there are other ways you can break up the cost of your holiday.

One of the most obvious is to plan ahead and pay a deposit on a holiday for next year or later this year.

The key to making this work is to have a plan to save the remainder prior to the final payment being due, to avoid a last-minute panic.

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One of the best ways to do this is to set up an online saver account, with an automatic weekly or monthly transfer through your account (many banks offer free online saver accounts).

If you have less time to play with, another option is to book a trip that includes a "local payment" or "travel kitty" paid on arrival.

This allows you to pay in three chunks: a deposit, a second payment and then the local payment on arrival.

Local payments are usually charged in US dollars and occasionally in the local currency of that country, so it pays to keep an eye on exchange rates and change your money at an advantageous time.

You could spread the cost even further by changing money over several months, although you need to be wary of transaction costs.

A good option for a holiday where you are paying for things as you go is to get a travel money card or debit card and load some money on to it each week or month to build up a fund.

There are many cards available but one of the best is the Wizard Clear Advantage MasterCard, which has no annual fee and charges no currency conversion fees for purchases you make overseas.

The card is a credit card but can be pre-loaded with your own money, which gets used up before you start using credit.

I would never recommend taking a holiday entirely on credit but combining pre-paid arrangements or a debit card with a credit card can further spread the cost.

Depending on the length of your trip, you might be able to spread your credit over more than one statement period, giving you more time to pay it off when you get home.

If you are planning a resort holiday, some have meal packages that can be pre-paid (and usually represent good value).

You might be able to pay for the accommodation, then add the meal package sometime prior to departure, leaving you with only drinks and activities to pay for on arrival.

One last thing to be wary of when trying to space out a holiday budget is last-minute costs.

Make sure your passport is renewed in plenty of time and that you get any visas you need well in advance.

And ensure you factor travel insurance into your early arrangements, for the sake of covering your prepaid bookings as well as managing your budget.

THE HOLIDAY BUG

AUSSIES have long been regarded as determined travellers and it seems not much will stand in our way.

The latest figures released by Roy Morgan Research show that while consumer confidence has plummeted over the past 18 months, the percentage of Australians taking a holiday has not declined.

And while many will be travelling more modestly or shortening their time away, overseas trips are certainly not off the agenda.

Nearly one-fifth of Australians took an overseas holiday in the 12 months to March and the intention to take an overseas holiday in the near future remains surprisingly strong.

The international director of tourism, travel and leisure at Roy Morgan, Jane Ianniello, says while competitive pricing and air access to new destinations have contributed to the trend, there has also been an increase in the percentage of Australians who say it “only feels like a holiday if I leave Australia”.

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