Top new ways to save for your holiday

Top new ways to save for your holiday

We all know that travel can be expensive, especially when you have bills or a mortgage to pay. By the time you add up your flights, accommodation and insurance costs it almost feels like there’s no money left to go out and enjoy the city to which you have travelled.

Finding new ways to come up with the cash for your holiday, and to keep costs down while you’re on vacation, is a must for every travel addict.

Here are some of the best ways to pay for your holiday necessities and still have enough money left over for those once in a lifetime travel experiences.

Saving up before you go

Money box drinking cocktail down the palm

Saving enough to go away on a trip is often the first and most difficult hurdle for cash-strapped travellers.

Incentive based savings accounts are a great way of stashing some cash for your next holiday as they tend to both require a minimum monthly deposit and discourage you from making any withdrawals.  By sticking to the account’s basic terms and conditions, you effectively sign yourself up to a relatively simple savings plan.  By doing so you are rewarded with bonus interest which can go a long way to making your trip even more memorable. 

The RAMS Saver account is a great example of an incentive based saving account.  It has some conditions in order for customers to earn bonus interest (on top of the variable base interest rate the account offers). Firstly, customers must deposit at least $200 each month.  This could be as easy as getting a portion of your salary paid into the account each month. 

Secondly, in order to be eligible for the bonus interest rate, customers must not make any withdrawals each month. This effectively makes customers think twice about whether they really need to spend money now or instead build up the spending money for their trip. Bonus interest is only payable on balances up to $500K.

Apart from the traditional savings account, new apps can help you stay disciplined and save extra cash before your big trip. An example of this is the Acorns app that can be a useful tool for savers who find it hard to stick to a financial plan.  

The app helps in identifying areas of your spending where you can cut back, and setting reasonable short and long term targets for yourself. Acorns allows you to automate how much you save by allowing you to save & invest any amount on a daily, weekly, or monthly basis.

Another key feature of Acorns that helps relieve the stress of saving is Round-Ups. Round-Ups takes any transaction you make on your credit or debit card, rounds it up to the nearest dollar and invests the change into your portfolio. By linking saving to spending, it is a great way of showing that you can save without affecting your lifestyle.

Saving on insurance

Europe map and airplane in cappuccino (made of cinnamon). Travel concept. Travel agency

Travel insurance is a must for any holiday. While it will involve an initial cost, the cost of not having insurance if something goes wrong could be infinitely higher.

Online travel insurance specialists, InsureandGo, suggest buying directly from a specialist to help cut out middle man fees on travel insurance. Buying your insurance direct from an online supplier can work out cheaper, but make sure you shop around for cover that is appropriate for you – not just cheap.

It’s also recommended to read the terms and conditions and take note of any inclusions and exclusions on your policy so you know exactly for what you are covered. This should help you avoid running into any surprise costs down the track.

While most policies will cover you for standard items – like medical/hospital and emergency, trip cancellation, liability, baggage. Before you purchase your insurance think about what other unique areas you will need cover for.

Will you be doing any risky sports or activities that required extra cover? Perhaps you taking an expensive camera or renting a car? These are just some of the things that you should take into consideration when choosing your cover so you are not left out of pocket if something goes wrong.

Another tip is to look out for discounts and promotions. Just like your favourite clothing store, travel insurers also offer coupon and discounts. If you’re a regular traveller, it may be worth signing up to their newsletters or checking out their social media pages is a great way to find out about these limited time offers.

Saving on accommodation

Small dog maltese sitting in the suitcase or bag wearing sunglasses and waiting for a trip

For those looking to pay less for accommodation and more for experiences, house and pet sitting is the ideal option. By providing free pet care when you travel, you can enjoy the opportunity to spend time with a pet and live like a local in the places you visit.

You could reduce the cost of your trip by over a third and help pet owners find peace of mind while they are away from home. Instead of checking into a hotel you can stay for free in homes across Australia and all over the world.

This style of accommodation is an experience in itself and gives you the chance to make connections with local people, discover off-the-beaten-path destinations, and take advantage of the companionship having a pet can provide. By organising house and pet sitting stays through a community like TrustedHousesitters, for less than the cost of one night in a 3-star hotel, you could save thousands of dollars on your holiday accommodation.

TrustedHousesitters is an online community of pet lovers who engage in a mutually beneficial exchange to ensure all members can find the freedom to travel. Providing a simple solution to a universal problem, they help home and pet owners connect with caring, verified sitters who offer free pet care in exchange for a free retreat, because they want to spend time with pets when they travel.

Saving on the road

Three tourist friends consulting gps on smart phone in a touristic place with a monument in the background

Apps are not only for saving before your trip, they can also make life a lot easier when you’re out on the road. One way that apps can make your travel experience better (and cheaper) is by helping you avoid those “tourist trap” restaurants that give you inauthentic food for double the price of a true local feed.

Using the Townske app, you are able to easily uncover the places that locals go to again and again. These are the places that are doing amazing things, providing amazing experiences and are often at or below prices of more touristy places. With Townske, you could improve you travel experience and have the opportunity to enjoy the true richness of cities. 

Another hot tip that could see you saving thousands over your travels is getting access to an International Student Identity Card (ISIC). Full time students, teachers and anyone under the age of 31, qualify for one of 3 lifestyle and discount cards.

First established in 1953, all bona fide students over the age of 12, regardless of their nationality, race, gender or religion can purchase an ISIC card at an affordable price. Via one single card, ISIC students gain preferential and discounted access to products, services and experiences relevant to all aspects of student life, from software licenses, cinema access to bookstores, public transport, cafés and eateries and much more.

Whether you’re staying put in Australia or heading off on an overseas adventure, these internationally recognised discount and lifestyle cards are the real deal when it comes to savings.

ISIC gives you a choice of up to 42,000 lifestyle and travel benefits in over 133 countries, including more than 5,000 in Australia and New Zealand. For example, you could get 20 per cent off your meals at over 2,500 restaurants, cafes and takeaway outlets across Australia and New Zealand.

There are also exclusive discounts on flights and other travel products through STA Travel and negotiated discounts on train, bus, tram & ferry tickets around the world. There is an ISIC app that can be downloaded to help you check for discounts while you’re on the go. 

Looking for a financial product to offer you the best of both worlds, both at home and abroad? ISIC cards are an exciting collaboration and a great way for the students and youth to make their hard earned travel dollars last a little further. The global benefits on the ISIC card together with the Westpac Choice account, ensure students and youth can’t go wrong if they are looking for flexibility, savings and a great way to start their adventure.

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Learn more about savings accounts

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.

How can I get a $4000 loan approved?

While personal loans and medium amount loans don’t offer guaranteed approval, there are steps you can take to help increase the likelihood of your application being approved, including:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria