As we move into a post-Covid world, it might just be time to start planning that OE. From saving money on flights, to travelling with a student loan, there’s a lot to consider when heading out on your big adventure. We’ve put together our top tips on how to manage your travel finance concerns.
Getting the best flights
There’s no denying that flights will probably be the biggest expense coming out of your travel budget. As much as it hurts to spend money on what is essentially glorified public transport, it’s also the area in which you could make the biggest savings.
Generally the earlier you book your ticket, the better. According to the booking site kayak.com, ticket prices hike up closer to the travel date due to business travel booked at the last minute. Aiming to nab your tickets at least 21 days in advance is your best chance to get the lowest fare possible.
Being flexible with when you fly can be used to your advantage when looking for affordable flights. Most travel search engines such as Skyscanner or KAYAK will allow you to search for the cheapest options, which tend to fall in the “off-seasons” for that destination. Departing at an unpopular time in the day can also significantly reduce the strain on your wallet. Hello 3am wake-up time!
Onward travel requirements
Being a New Zealander comes with many perks, one of them being Visa Waiver entry. This is an arrangement that allows New Zealanders to enter certain countries as a tourist without a pre-arranged visa. However, what many countries do enforce is evidence of onward travel. Your proof of intended travel out of the country will be asked of you before boarding. If you aren’t prepared with a prior booking you could be refused entry onto the plane. As if airports weren’t stressful enough!
For those of you who haven’t yet decided in advance where your onward travel destination will be, a reliable solution is Best Onward Ticket. This site is a best-kept secret of travellers around the world, and can get you out of some sticky situations! Rather than wasting money by booking a border-crossing bus that you may never use, Best Onward Ticket allows you to temporarily “rent” a plane ticket. The boarding pass emailed to you is acceptable as valid onward travel, despite its expiry in 24 hours. The best part is, it’s only $12!
Working while travelling
Every traveller knows that being on the road can be lonely at times. Working while on your trip is a great way to meet both tourists and locals.
Volunteer work is a popular choice for those looking to save money by exchanging work for accommodation and food. If you’ve got an environmental bent, there are plenty of eco-projects across the world that welcome volunteers in exchange for board. Finding a place that lights your fire is easy with workaway.com, a site that connects travellers not only with work exchanges but also with homestays and house-sitting among other opportunities.
Becoming employed in paid work overseas definitely requires a little bit more foresight. Although some employers are happy to pay undocumented staff under-the-table, being prepared with the right visa is always the safest option. If you do anticipate wanting to work abroad, for many countries you will need to apply for the appropriate work visa in advance here in New Zealand. Each country has a different procedure, and processing times can be slow. However, with a bit of organisation and patience, you’ll be off on your working travel adventure in no time.
Travelling with a student loan
A reality for many kiwis, having a student loan becomes a little more complicated when you leave the country. Reading all the fine print on your loan isn’t exactly enticing, but running into trouble with the IRD is not something anyone wants to experience. However, it is easy to avoid by keeping in mind a few key points.
Payment free period
When you leave New Zealand you are still considered a “New Zealand-based borrower” for six months after your departure. This means that your loan remains interest-free, and you don’t have to make any payments while away. If you do want to travel for longer than six months, interest will start being charged on your loan.
At this point, obligatory payments also start to kick in. Every six months you’ll need to make a contribution which is based on your loan balance. Unfortunately, if your total balance is larger than $90,000, it’s likely that the obligatory payment won’t be enough to offset the interest being charged. To avoid this, you can make voluntary payments throughout the year on top of the obligatory charges.
Repayment holiday
Yes, there is a way around some of this. If you know that your travels will last for a year and a half in total or less, it’s worth applying for a repayment holiday. This allows you a year without making any payments towards your loan. Keep in mind though that interest is still added to your loan during this period. You can apply before you leave New Zealand or up to six months after your departure.
Working abroad and making repayments
Moving overseas for good is the dream for many young kiwis. If you do end up overseas for an extended period, you might wonder how to make it sustainable while having a student loan. In the end, it does come down to crunching the numbers. To make it work long term, you need to make sure you’re earning enough to keep up with loan payments, and be able to take care of your living costs, and maybe even save a little.
Because you’ll be making repayments in New Zealand Dollars, it’s a good idea to choose a country with a strong currency in which to work, ideally stronger than the NZD to give you the upper hand. Countries like the United States, the United Kingdom, and anywhere using the Euro are good options.
Set up a nominated person
There’s really nothing worse than getting caught up in New Zealand bureaucracy while stuck half-way across the world in another time-zone. Unfortunately, the IRD isn’t just a Messenger or Whatsapp chat away, so if you have a concern your options are email or phone call. Particularly if you are having trouble making a repayment, you might want to talk to someone urgently.
This is why you should set up a nominated person before your trip. This could be a trusted family member or friend. This person will have access to your student loan account and be able to take actions on your behalf. You can register your chosen person by logging in to your MyIRD account, with their IRD number, name and address.
In the end we can’t predict what will happen when we travel. Having someone at home to rely on when things get a bit messy can be the greatest comfort of all.