Mind the gap ( year)

Of course, they’re fun – but taking off on your travels can be fiendishly expensive – not to mention risky. Our guide will help you to...

AGAP year spent travelling overseas offers school-leavers or graduates a taste of adventure before heading off to university or settling down to the world of work. Many of those taking time out abroad may want to volunteer, learn a language or gain work experience.

According to the Association of British Travel Agents, Thailand, Australia, Vietnam, Peru and New Zealand all feature high on the current list of top gap-year destinations.

Nick White, from the association, says: ‘The cliched image of a gap year as a year-long party is rapidly losing ground as many use it as an opportunity to gain work experience on internships or in paid employment. Volunteering trips are also popular.’ But while a gap year should provide positive experiences, it is essential to do your research and plan your finances thoroughly to get the most out of your time away.

Here is our survival guide for those preparing to pack their bags.

SAVING UP

WHEN planning for a stint abroad, the first task is to research the cost of getting to – and living in – your chosen destination. This should include the amount needed to cover flights, accommodation, transfers, taxes and food.

Andrew Hagger, financial expert at money website Moneycomms, says: ‘Once you have worked out the anticipated cost of your gap year, divide this total by the number of months you have until you are due to head overseas. This will show you how much you need to put aside each month.’

It is then down to you to work out how to get this money together. While the bulk of your travel fund might come from taking on a part-time job, you can also look at other ways to boost your earnings. This could include selling old DVDs and mobile phones ( tr y website Musicmagpie), or by taking part in surveys (through websites Swagbucks and Surveys).

You might also be lucky enough to get financial support from your family.

Hagger adds: ‘The best financial step to take is to open an instantaccess savings account. You may not earn much interest, but it is important to keep your travel fund separate from your day-to-day money.’

Ellie-Kate Fallon cut back considerably on her spending in her final year at Leeds University to save for her gap year. The 21year- old, who has just graduated with a first in chemistry, will go to Chile in February next year.

She says: ‘I did not socialise as much in my final year and when I did go out, I got jobs handing out flyers for events. This meant I got both free entry and taxi rides, saving me around £30 a night.’

Ellie-Kate is now living back at home in Formby, Merseyside, and doing all she can to build her gapyear fund – including three weeks of work at the recent golf Open Championship in Royal Birkdale.

She says: ‘Working at sports competitions is a great way to save for the short-term as you get a lot of hours during the event without being tied into a contract for months.

‘In addition, I earn a bit of extra cash working as an internet moderator. I do this job from home whenever I want. I will also be able to do it when I am travelling, meaning I can boost my funds while away.’

Ellie-Kate is booking her flights to Chile with STA Travel, a gap-year specialist, and will book her first few hotels in advance. She will organise the rest of her accommodation as she goes along.

While abroad, she plans on keeping a budget spreadsheet to make sure her money lasts. She will take out Post Office ‘Backpackers’ travel insurance and has a Travelex prepaid card which she will load before her trip.

She adds: ‘I will also buy a bit of each currency that I need from the Post Office before leaving the UK. I have a mobile phone contract with Vodafone, but plan on having my data turned off as much as possible, and instead using free wi-fi spots.’

BUDGETING WHILE AWAY

IT MIGHT not sound fun but you need to carry out some careful cashflow planning during your travels.

The key is to avoid throwing caution to the wind and piling up huge debts that you cannot afford to pay on your return.

Hagger says: ‘Try to set a weekly or monthly allowance – and be disciplined about sticking to it. The last thing you want is to run out of cash halfway through your trip.’

Register for online banking so you can keep tabs on your money on your phone or tablet, wherever you are in the world.

Do not forget that working abroad is a good way to make a gap year more affordable. Websites such as Escapethecity list paid job opportunities around the world. But bear in mind that it is not always as straightforward as turning up and finding a job. You will need to check on visas and permits in advance. Try websites Gapyear and Gapwork.

TRAVEL MONEY

ONCE you have the beginnings of an itinerary, you can start thinking about how to t ake your t ravel money.

One of the best options is a prepaid card that you can load before you go – and then use to withdraw cash in a range of currencies.

Top picks i nclude cards from FairFX, Caxton FX, WeSwap, Revolut and Monzo.

With a prepaid card, you can lock into competitive exchange rates, which could be an advantage if the pound falls.

While some do not levy charges, others come with replacement fees, monthly administration fees, top-up charges, withdrawal fees and fees for spending – so check before signing up.

Once you have got a card, think about giving your parents t he account information so they can top it up for you in an emergency. If you are taking foreign currency, do not buy it at the airport as rates will be poor.

Moneysavingexpert’s Travelmoneymax online tool – or app – can help you find the best rates locally.

If you are set on taking a credit card avoid being hit by steep charges for cash withdrawals and purchases by using one specifically designed

for use overseas – such as Halifax Clarity or Post Office Platinum.

Once abroad, always insist on paying in the local currency – even if you are given the option of paying in pounds. This means you will not fall victim to a practice known as ‘ dynamic currency conversion’, where an uncompetitive exchange rate is applied.

CHEAP DESTINATIONS

WITH the pound weak against many major currencies, your gapyear savings will not go as far as they once did.

To help combat this, look at destinations where the pound goes that little bit further – and consider countries where living costs are not too expensive. According to the latest cost-of-living index from currency specialist FairFX, the cheapest places to visit as part of your gap-year travels include Argentina, Russia, Brazil, South Africa, Japan, Indonesia, Tanzania, Malaysia, Australia and Chile.

This is based on a combination of exchange rates and everyday costs, including the price of hostels, food, transport and essentials such as coffee, mobile phone usage and alcohol.

For example, in Argentina the pound has improved by 205 per cent over the past five years, meaning that travellers will get an additional £673 worth of currency for every £1,000 they exchange. When it comes to the cheapest options based purely on the cost of living, the FairFX findings show Tanzania is the cheapest at just £21.74 a day, followed by Argentina (£34.87) and Malaysia (£37.84).

Separate research from Caxton FX, another currency specialist, also puts Argentina top of the list of destinations where sterling still offers good value for money – along with Mongolia and Egypt.

Rupert Lee Browne, of Caxton FX, says: ‘With the pound currently so weak against many currencies, it is worth considering destinations off the tourist trail where costs are lower. But this kind of adventure is not without risk and it is important to check the latest travel advice from the Foreign & Commonwealth Office.’

GET COVERED

LATEST research from comparison website Comparethemarket reveals that more than a third of those taking gap years are set to do so without travel insurance – meaning 27,000 students are putting themselves at risk should they fall ill or get injured overseas.

Stephanie Corbett, from the website, says: ‘Given that a quarter of previous gap-year travellers have had an accident where an insurance claim was necessary, t he high number of travellers without cover is concerning.’

If you are looking for gap-year insurance, the good news is that insurers cater for the adventurous traveller. Kevin Pratt, insurance expert at website Moneysupermarket, says: ‘ Remember that the cheapest policies will not necessarily provide you with the level of cover needed for a lengthy stay overseas, or for extreme sports. At the same time, cover does not need to break the bank.

‘You can buy 12 months’ worldwide cover for around £150, while six-month policies cost around £80.’

When searching for quotes, check you are covered for all the destinations you want to visit – and all the activities you want to try.

Pratt adds: ‘Insurers know backpackers will often want to go scubadiving so many activities are covered as standard. But if you want to go paragliding, it is important to check the sport is covered.’

Also keep an eye out for deals. For example, TopCashback is currently offering £14.85 cashback on Post Office ‘ Backpacker’ travel insurance policies.

Adam Powell, from insurer Policy Expert, says: ‘Arrange cover well before your trip starts – this will mean you have cancellation cover in place. Check the level of cover for medical costs, lost and stolen possessions and personal liability.’

Make sure you take your insurer’s details with you. Some firms will now store your policy documents via their app or an online wallet, meaning you do not have to carry documents around.

If your travels are taking you to Europe, do not forget the European Health Insurance Card, which entitles you to free or cut-price state medical care.

PHONES ABROAD

YOU will probably be keen to keep in touch with family during your time away – and may also want regular access to social media. But you need to think about the cost. Matt Sanders, f r om c o mpar is o n we bs i t e Gocompare, says: ‘Before travelling abroad, check your mobile phone operator’s roaming charging policy. If not, you could be in for a nasty shock when your bill arrives.’ Ask about any special deals for overseas use. It might prove shrewd to buy a SIM card abroad.