A holiday hangover

Financial sense also takes a break when people go on holiday, writes Sophie Elsworth

A DREAM holiday can quickly turn into a financial nightmare for jetsetters who fail to travel with set spending limits.

Many Australians will be taking an overseas mid-year break soon and experts say the best things they can do is factor in their daily travel expenses while also carrying multiple payment methods so they are not caught short.

New analysis by the nation’s largest bank, the Commonwealth Bank, found:

—One in four people fail to stash any cash for their trip before they head off;

—One in five people travel without bothering with a holiday budget; and

—One in two travellers will return from their holiday with an average of $1554 in debt.

CBA’s general manager of everyday banking Michael Baumann said travellers factor in the costs of flights and hotels but often don’t plan for their everyday expenses.

“Unless they have an inclusive and paid for holiday they need some spending money and that’s where they haven’t focused on ,’’ he said. “A mixed wallet is always good to have, including a travel money card, foreign cash, maybe a back up credit or debit card so if you have an unfortunate event you have a back up card.”

The independent research quizzed more than 1000 Australians and revealed about one in two made an educated guess on what they would spend, however one in three people are not putting away any extra money for unexpected expenses while on holiday. The Currency Shop’s director, Justin Rampono, said a good way to keep on track of your holiday spending is to use a currency converter app. “When you’re about to head overseas using a conversion app can give you an idea of how much the Aussie dollar will get you on your holiday,” he said.

“Then when there’s something you want to buy overseas such as a souvenir or a meal you can use the currency converter.”

Mr Rampono urges customers to be careful before signing up to prepaid travel cards because it’s easy to get stung by low currency rates.

He suggests carrying cash, using a low-fee card to make daily purchases, another card for ATM withdrawals and having your own debit card as an emergency back up.

Mr Baumann also said it’s important to do regular checkups on your spending.