10 Great Ideas To Help You Budget For Your Gap Year

Expat lifeMoney know-how
11 Dec 2018
14 mins read
Written by Team Instarem

Your University days are finally behind you, a fact that has you unbelievably relieved and profoundly grateful. Mum and Dad are now nagging you to “find a job and move out of our house!” The rational you knows that this is something you’ll have to do sooner or later because ‘real life’ is calling!

However, the non-rational you is on a totally different tangent. This part of you – the dreamer, the romantic, the idealist – is telling you to take some time off before you jump into real life, a life that will surely include work, money and a bunch of responsibilities you don’t yet feel ready for. This little voice inside your head (which sounds nothing like Mum or Dad by the way!) is exhorting you to step out of your comfort zone first. “Explore this beautiful world, visit new places and discover new peoples and cultures”, it says, “because work will still be there when you return but the opportunity to see the world at leisure may never come again”. Around the same time, you bump into an old school friend who tells you about the amazing time he had on his ‘gap year’ – 365 days full of travel, adventure and fabulous experiences. By now, your mind is made up. “Gap year, here I come!” you tell yourself in glee.

Also Read: What Is A Gap Year & How To Make The Most Of It

Suddenly, your rational side reasserts itself with a dose of harsh reality: “Hold your horses, matey! Did you think gap years come for free? How do you plan to finance your so-called time of travel/adventure/fabulous experiences? Are you sure you’re ready for this?”

And now you’re suddenly feeling overwhelmed by all these hows and what-ifs raised by your rational side. You’re on the verge of deciding that you can’t really afford to travel and therefore a gap year is not on the cards for you.

Yay-nay-yay-nay – argh!

We say that you stop worrying and jot down your concerns with a calm and rational mind. If you do that, here’s what your worries would look like:

  • How much money will you need to finance your gap year?
  • How do you prepare a budget?
  • How can you save money before and during your travels?
  • How can you earn money during your travels?

In fact, we can help you find answers to these questions and show you how to prepare a budget to finance your gap year.

Preparing A Budget – Ten Useful Ideas

10 Great Ideas To Help You Budget For Your Gap Year

Films and books like ‘Eat, Pray, Love’ give the impression that taking a gap year is simply a matter of taking off when the whim strikes you. In the real world, however, this is rarely true. Also, the book’s author had plenty of money so a modest budget was not really an important consideration for her. If you are like most regular folks of the world, your gap year is more likely to be a transformative (and maybe even transcendental!) experience if you do your research, create a plan and prepare a budget.

And actually, preparing a budget for your gap year adventure is not as intimidating as it seems! As long as you arm yourself with relevant information, understand your own needs, goals and objectives, and leave some room for manoeuvring, you’ll have a perfectly practical budget in no time. If you have a solid plan and a good budget, well then, a wonderful gap year adventure cannot be far behind, can it?!

Before you start though, remember that planning and budgeting for your gap year should not be a painful activity that you ‘have’ to complete before the ‘real fun’ begins. These pre-trip activities can be equally fun, so treat them as such.

And make use of technology! Download apps or spreadsheet software – many of them are free – that you can refer to before and during your travels.

Below, the first six ideas will help you find answers to the initial two questions we raised:

  • How much money will you need to finance your gap year?
  • How do you prepare a budget?
Idea #1: Identify All Possible Costs
Idea #2: Review Your Current Financial Situation

10 Great Ideas To Help You Budget For Your Gap Year

Identifying costs and possible expenses should be your first step in preparing a budget for your gap year. Some of the most common travel expenses are:

  • Flight tickets
  • Vaccinations
  • Visas and other documentation – such as application fees for police clearance certificates
  • Medical checkups
  • Travel insurance
  • Hostel expenses
  • Intra-country conveyance expenses
  • Activity or entertainment costs – knowing what activities you’d like to undertake will help you with this step

If you know how much you are likely to spend in future, you will be better able to understand if you have the ability to finance your dreams now. To do this, you will also need to review your current financial situation and find answers to these questions:

  • How much money do you have saved? Is it enough to cover all the costs (and more) you have identified?
  • Do you have any assets or investments (such as stock) you can sell to finance your trip?
  • Can you raise additional money by selling something or organising a fundraiser?
  • Can you get a legal ‘side hustle’ in addition to your day job? A side hustle could be any part-time work that yields you extra money.
  • Can you cut back on some expenses?
  • Can you borrow funds from your parents or friends (or parents of friends and friends of parents!)?

We wouldn’t recommend that you take on debt from a bank or the government to finance your gap year. And we definitely wouldn’t recommend finalising your plans without a proper analysis of your financial situation!

Idea #3: Prepare Rough Estimates For Some Items

10 Great Ideas To Help You Budget For Your Gap Year

For some items such as food, you may not be able to predict your exact future expenses but don’t let this get you down. As long as you are willing to make some sacrifices and have some knowledge about the food culture in the countries you plan to visit, you will be able to prepare a rough food budget (and stick to it too!)

These tips might help:

  • Prepare a daily budget for food and drink and stick to it as much as possible (it’s not hard!)
  • Stay in hostels that include a kitchen and cook your own food instead of eating out for every meal
  • If you have to eat out, find cheap options such as food courts or fast food outlets. But remember that even these can add up over the course of a year!
  • Familiarise yourself with the markets and food stores in your host countries. Buy items on ‘specials’ sales at supermarkets or shop for produce at farmers’ markets
  • Carry dried goods like bread, chips, rolls or nuts when you’re travelling

Regardless of your food budget, don’t be afraid to experiment! Try out the local dishes, ask questions and enjoy exploring new flavours and cuisines. In short, make the most of your gap year experience!

Idea #4: Create A Schedule

10 Great Ideas To Help You Budget For Your Gap Year

An itinerary will be worth its weight in gold if you plan to spend your gap year hopping from one country to another. The information you put on the schedule can help you with creating your budget. In addition, knowing where you’d like to go will make achieving your gap year goals easier.

Remember that living costs vary widely across the world so it helps to know which countries are more suited to modest wallets. Also, exchange rates can make a huge difference while travelling, so you should pay attention to both these factors and plan a gap year accordingly. For example, if you’re American, your dollars will last longer if you if you spend your gap year travelling through India, Nepal, Sri Lanka, Cambodia and Vietnam, instead of backpacking through rich European countries like Germany, France, Italy, the UK or Sweden.

Your itinerary can be as flexible or as fixed as you (and the visa Gods!) like – the point is to have some idea of where you want to go and when instead of leaving everything to chance. Remember, those chancy decisions may seem fun and exciting for a while, but they usually end up costing a lot more in terms of time, money and effort.

Idea #5: Figure Out Your Logistics & Accommodations In Advance

10 Great Ideas To Help You Budget For Your Gap Year

Once you know where you’re going and when, you should confirm your logistics. Compare airfares (plenty of comparison sites are available; so, take advantage of them) and book your flights as early as you can. You can almost always save money if you make advance bookings.

And don’t forget to apply for visas and other necessary paperwork (medical tests, police clearance certificates, etc) well in advance. Processing times vary by the host country and time of application, so the earlier you apply, the better. Here’s a simple table to help you organise your visa requirements. Simply replace placeholder information as per your particular needs:

Travelling from one country to another will naturally necessitate air travel but travelling intra-country offers a host of conveyance choices that you can pick and choose as per your needs. If you’re on a tight budget, you can forgo the Ubers and utilise cheaper modes of travel such as trains in India or three-wheeler tuk-tuks in Thailand. While these conveyances may be uncomfortable, poorly maintained and crowded, they are almost always cheap and therefore suitable for budget-conscious gap year adventurers.

Also, in many countries, night travel or travelling during weekdays tends to be cheaper than travelling during the day or on weekends/holidays. Find these cheaper options and book them in advance if possible. Also, try to avoid travelling during busy periods like Christmas, Easter and other important country-specific holidays like Thanksgiving, Diwali or Chinese New Year (depending on where you’re flying to).

Like conveyance, accommodation must be another important consideration if you’re planning a gap year. All over the world, youth and backpacker hostels tend to be cheaper than hotels (and even AirBnBs, in some countries). Many can be booked online months in advance. But if you plan to stay in one place for an extended period, you might find that staying in a shared flat or bungalow with other expats or signing up for a ‘paying guest kind of arrangement may be even more cost-effective over the long term than a hostel.

Idea #6: Factor In Some Additional Money In Your Budget

10 Great Ideas To Help You Budget For Your Gap Year

A budget – even a daily one – is more often than not, a rough estimate of expected expenses. It is impossible to stick to it all the time, no matter how conscientious or careful you are. Therefore it makes sense to keep some money aside for emergencies or unforeseen expenses that may arise on your gap year. This emergency fund will keep you sane even if you go over-budget on some days (for whatever reason!)

A word of caution though – don’t forget that this is an ‘emergency’ fund, not an excuse to go crazy shopping for pounamu jewellery in New Zealand or khon masks in Thailand! To avoid the temptation of spending this fund for non-emergency reasons, first identify what qualifies as an emergency in your book. Then make this money less readily available to yourself. In other words, don’t carry it in cash form! Keep it in a bank account that you can access with a global credit card or through a money transfer service like InstaReM. Both these options are useful but still not as easily ‘accessible’ as cold, hard cash. Another option is to use a prepaid currency card: load cash onto it before you leave and spend it only in case of emergencies while abroad.

In addition to an emergency fund, you should also consider buying travel or multi-country health insurance. It can save you a lot of hassle as well as expenses (and you won’t have to touch your fund!). Buy a policy that is valid for the entire duration of your trip and that covers emergencies such as loss of passport, illness, accidents, etc. And make sure that the insurance covers every country you’re travelling to (*Read The Fine Print*).

Another question we raised was: How can you save money before and during your travels? Here are some ideas to help you with this:

Idea #7: Be Wary Of Scams

10 Great Ideas To Help You Budget For Your Gap Year

Scammers and con artists exist in every country and they often target trusting foreign travellers (can you spell ‘gullible’) If you’re new to a country and its culture, you can very easily fall prey to unscrupulous people and find yourself in a financial, or worse, legal jam. If this happens, you may find yourself poorer by a few thousand pounds, dollars or Euros!

Before travelling to a new country, do your research about scam networks operating there. Pay attention to government advisories and talk to other travellers for information. While travelling, use your common sense and always trust your instincts. If a deal appears too good to be true – better than usual exchange rates, cheap medicines, cinema tickets or sports passes or free entry to a club – then it probably is. Whether you’re a seasoned traveller or a first-time gap year-taker, remember that there’s no such thing as a free lunch!

Also, keep an eye on your stuff, don’t carry too much cash on your person, beware of pickpockets and avoid initiating conversations with strangers, especially, if you’re a lone female traveller.

Idea #8: Don’t Exchange Money At Airports

10 Great Ideas To Help You Budget For Your Gap Year

Airports all over the world offer some of the worst exchange rates possible. The convenience of exchanging your dollars for dongs at Vietnam’s Noi Bai international airport is minuscule compared to the loss you’ll face thanks to the hefty commissions charged by the airport’s exchange bureau. If you want to make your dollars go further, you are better off waiting until you get into Hanoi city and then finding a money exchange bureau that offers better exchange rates.

Idea #9: Educate Yourself On Types Of Travel Expenses & How You Can Avoid Them

10 Great Ideas To Help You Budget For Your Gap Year

Foreign travel expenses can really eat into your budget and turn a memorable gap year into a nightmare. These expenses include:

  • ATM withdrawal fees
  • Foreign transaction fees
  • Currency exchange fees – not the same as foreign transaction fees
  • Dynamic Currency Conversion fees – applied on credit card purchases in a foreign currency
  • Mobile roaming or data fees
  • Wi-Fi charges
  • Airport departure tax

Do your research about these possible expenses so you can find ways to avoid (or at least minimise) their impact on your gap year budget.

You Might Also Like 10 Travel Expenses You May Not Be Aware Of

And finally, try out some of these ideas to answer the question: How can I earn money during my travels?

Idea #10: Find A Job, Before You Leave If Possible

10 Great Ideas To Help You Budget For Your Gap Year

If you’re someone whose gap year is being financed by their Mum or Dad, then getting a job is probably not very high on your list of priorities.

But if you are an independent, self-financed gap year adventurer, you might find yourself strapped for cash. In many countries, travellers can work casual, short-term jobs – in hospitality or farming, for example, depending on the conditions of their visa. Such jobs are very popular with gap year adventurers because they offer the freedom to work as well as travel. Some jobs may include food and accommodation, which will reduce your living expenses and give you the luxury of a more flexible budget.

Find out what kind of jobs you can do in a country and start applying as soon as possible. In some cases, you may be able to get a job even before you leave your country. Research job-search websites, talk to other expats (forums are great sources of information) and sign up with temporary employment agencies in that country.

Before You Go

Don’t let money worries get in the way of your dreams of travelling the world and exploring new horizons. Taking a gap year is not rocket science. And it doesn’t have to cost the earth! With a little planning, lots of imagination and plenty of common sense, you can have a wonderful gap year and collect fabulous new experiences that you’ll remember forever. 

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