Travelling overseas? Here are 4 tips to maximise your savings potential!

by Polly Fleeting, money writer at Mozo Wednesday March 25th 2020

Travelling overseas? Here are  4 tips to maximise your savings potential!-student-money-saving-tips-travel-01

Travelling the world as a student is awesome. But the reality is, it comes with a pretty big price tag.

Having recently been a uni student and still a world traveler myself, I know things like the cost of flights, accommodation, transport and activities can seem really daunting at first. But it’s important to not let them kill your international adventure dreams, because you and I both know with a little determination, you’ve got this.

So with that in mind, here are some tips to boost your savings and get you to where you want to go.

  1. Set a savings stretch goal

Stretch goals force us to think outside the box and when you're saving for an overseas trip you can't just rely on one method of savings.

The truth is, you will have to put your investigative hat on and do a little research into the potential travel costs you could face while you are away and figure out where you could potentially save as well. Consider things like flights, accommodation, transport and other activities, weigh up different offers and prices - your money may go further than you think, and remember, every extra dollar saved now is going to be more money to spend later on.

Once you’ve estimated the potential travel costs you’ll face, that’s your savings goal. But if you need a hand crunching the numbers, give Mozo’s Savings Goal Calculator a go!

  1. Ditch the duds

Bidding farewell to your lousy financial products is an important step to boosting your savings, whether it’s moving your money over to a higher interest rate savings account, switching to a fee free bank account or one with no overseas fees.

While it’s no secret that savings accounts and term deposit interest rates aren’t stellar at the moment - some are definitely better than others. So ditch the duds and be more savings savvy when choosing your banking products:

  • One option to fasttrack your savings is switching to an account with a bonus rate. Generally, these come with a low base rate but a high bonus rate when you put money away regularly. At the moment on Mozo’s database, the average savings account rate is 0.97% however, the highest savings account bonus rate is 2.25%. That’s an extra 1.28% difference which could grow your stash a lot more over time!

  • Going away sooner rather than later? You could take advantage of an introductory rate instead. The top introductory rate at the moment is 2.65% for the first 4 months which could be a great way to hike up your savings stash in a short period of time. Just bear in mind that after the introductory period the interest rate will drop to a less competitive one, so this option is good for the short term.

  • If you already have a large chunk piled up, you might want to consider a term deposit. This option could be a good one if you want to take away the temptation to withdraw your money before you leave for overseas. In this case, it’s crucial to compare products so that you find the most competitive rate for the term you need whether that’s one, three, six or twelve months.

  1. Become a grants super sleuth

While the government or your university are unlikely to lend you cash for a quick party trip to Bali, if you are heading overseas to study there are some options out there to give you a leg up financially.

Global exchange programs are really popular, and for good reason, it's a chance to spend a semester or two in a new country, live like a local and experience all life as an international student has to offer. Take it from an ex-exchange student though, it is expensive to live away from home for an extended period of time, especially on a student budget.

So that’s where the government’s interest-free OS-HELP Loan comes in to lend a helping hand. These nifty loans are offered to Australian students heading on exchange for one or two semesters and are added to their HECS-HELP debt to then be paid off the same way.

How much can you get? Well, as of 2020, for students heading to Non-Asian destinations they can borrow up to $6,913 per semester and for those looking to study in Asia you can borrow up to $8,295 as well as an extra $1,104. Just remember, you are only eligible to take out one loan per semester, and two loans in their lifetime.

Also don’t forget! Aussie and international unis offer scholarships for students looking to study internationally as well. Take Sydney University for example, in 2018, the uni offered a whopping $4.2 million worth of travel funding to help their students. So there’s plenty out there - you’ve just got to do a little digging.

  1. Make your budget your new BFF

Already have a BFF? Well make room for one more because you’re about to get all warm and fuzzy with your budget.

No matter what type of saver or spender you are it’s a good idea to review your current budget and adjust your spending habits to maximise your saving potential before you jet set overseas. It could be as simple as cutting down how many times you buy lunch when you’re at uni, to how often you shop online or even signing up for a budgeting app which could help you every step of the way.

And did someone say student discounts? Whether it’s retail shopping, heading to the movies or buying a coffee student deals are everywhere so keep your eyes peeled! Just remember to always keep your student card on you - you never know when you might need to whip it out to save a dollar or a few.

It’s also crucial to put the money you save by budgeting away to go towards your travel, not just leaving it to spend on something else. You could even set up an automatic transfer from your everyday account to your savings account, so you know you are saving without even having to think about it!

Polly Fleeting is a Money Writer at financial comparison site mozo.com.au. Whether it’s helping students find savvy ways to save or searching for the hottest travel money options, Polly keeps her readers informed so they can live life and make better financial choices. When she’s not finding out the latest banking news, or writing up in-depth money guides, you’ll find her out to coffee with friends or at home searching for her next holiday destination.