Earning saving and raising travel money
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Organising your travel moneyBank accounts If you’re still using the same bank account you had as a kid, now’s the time to think about changing it. It’s likely that more money will be going into - and coming out of - your bank account during your gap year than ever before, and you want to make that money work for you.  It’s a good idea to have two accounts. You’ll need a current account for day-to-day transactions like withdrawing money from cash-points. But if you open a savings account too, you’ll be able to watch your travel stash grow... Savings accounts offer higher rates of interest than current accounts, which means any money sitting in there will be earning you more money. Result. The accounts which offer the highest rates of interest often require you to give notice (typically a couple of months) when you want to withdraw money. This might be a bit annoying, but is good in the long term as it means you can’t fritter away your travel funds on pies and ale before you leave the country. Why not set up a standing order to take a set amount of money from your current account each month and put it in your savings account? That way you’ll know exactly how well your saving is going. Fantastic plastic If you don’t have one already, think about getting a debit, credit or prepaid card. Debit cards let you withdraw money from cash-points and pay for things in shops or over the phone or internet. They also let you get ‘cashback’ in shops, pubs etc. Any money you spend on your debit card will be taken from your account straight away, which means you won’t get a monthly bill and can’t run up big debts. Debit cards are an invaluable gap year accessory: most let you pay for stuff and withdraw cash overseas (sometimes for a small fee). Credit cards should be approached with a bit more caution. Pay for stuff on your credit card and the money won’t be taken out of your account immediately. Instead you’ll receive a statement each month telling you how much you owe. You won’t need to pay this off all at once, but the longer you leave it, the more interest you’ll have to pay on it. Interest charged on credit cards is generally high. You can see how this system is both very handy for travellers (you can pay for things when you need them, even if you don’t have enough money in your account), and quite risky (you can get yourself into some major debt if you’re not careful). Think carefully before you get one, and before you use it. Prepaid cards are a relatively new way of taking your money travelling. Essentially, they are like a mobile bank account and combine the best features of debit and credit cards. They are fraud protected, like credit cards. You can't spend what you don't have, like debit cards. You also don't need a credit check, so they're very handy if you're working while you're travelling Find out more about prepaid cards A question of trust... Before you go travelling, think about adding your parents or a trusted friend as signatories to your bank account. This means they’ll be able to do things with your account and the money in it while you’re abroad. This might sound like a loony thing to do, but could be very handy. If there are any problems with your account they can be dealt with straight away, rather than being left to fester until you get home. Banks cannot do anything on any account unless they are dealing with an organised signatory. It does mean that your parents or friend can access your balance, so if that’s a problem for you, think twice... but it also means you can leave money in the account to pay for credit card bills etc which is important. |
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