How to Finance a Year of Travelling

In my last blog I looked at why many mature adults are opting out of work and their normal lives and heading off for a year of travel – a gap year. These ‘grown-up gappers’ aren’t fresh out of school, but are mid-career professionals who are fed up with the rat race. They have realised there is more to life than working 24/7. Of course it’s much easier to take off when you are young and carefree and you don’t have children or a mortgage or a thousand other responsibilities however there are still ways to make a year of travel possible even if you have commitments. That’s what I want to write about today.

Jason Butler, author of The Financial Times Guide to Wealth Management, says planning a gap year should involve “a 12-month budget and a three-year road map”. I know people who’ve taken years to save and plan for their 12-months of travel. Let’s look at what needs to be done to make it happen.

Stepping out of work

If you have a responsible secure job, resigning for most people is not an option given the shrinking job market, but that does not mean a career break is impossible. Have other people in your company taken unpaid leave? What is your company’s policy on unpaid leave? Would you feel comfortable talking to your boss about a gap year? You could explain that it is a sabbatical and you will return to work refreshed and reinvigorated. Is there any possibility of staying with your company and working in a branch of the firm overseas? Could you work for a comparable organisation abroad and learn new skills that would please your boss? Could you work part-time remotely? If you have long-service leave coming up, consider taking your long-service leave on half pay and extending your leave time. Be creative, look at every option when planning a gap year.

Are you facing redundancy?

If you are facing redundancy, you might find yourself well placed to travel. Essential Travel, an English online travel insurance company, did a survey and found out that half of those embarking on an adult gap year were doing it because they were unhappy at work or they had been made redundant. The survey also found that the number of ‘grown-up gappers’ was rising rapidly. In 2012 only eight per cent of career gappers were aged over 36 years, but in 2013 more than half of gappers were aged in their mid-30s or older. Because of demand, Essential Travel has now raised the age range of its backpacker insurance to 55 years, and has reduced premiums for older gappers by 15 per cent.

Volunteering overseas

Another option to consider for a gap year is volunteering in a third-world country. You would be amazed how many roles are on offer for volunteers abroad. You are of course not paid for your work overseas, but you may find accommodation is provided and food in many developing countries is very cheap. This may be the most affordable option for a gap year, and you will also be doing valuable work for people in need. It’s a win-win situation. The volunteering program may also cover the cost of your travel insurance. Most standard travel insurance policies don't cover voluntary work or manual labour, but there is specialist backpacker or gap-year cover policies and these policies include this. It's really important to make sure you read the small print on the policies to ensure you will be covered.

There are a number of organisations which find volunteers work overseas, but visit this website first: the Australian Volunteers program: https://www.australianvolunteers.com/opportunities/

It’s an initiative of the Australian government. When I visited the website they had 40 volunteer positions that needed filling. They were looking for a massage therapist trainer in Vietnam, a fundraiser in Tanzania and a human resources manager in Timor. They also wanted a tourism operator, vet, marketing officer and librarian in other developing countries. What skills do you have? Think seriously about volunteer work in a developing country. According to Essential Travel, one in ten gappers are planning on doing some kind of work overseas.

It’s a question of money

Financing a year away takes money. Of course you are going to have to save, possibly for years, ahead of your trip. Draw up a comprehensive budget and think seriously about ways of reducing expenses. Do you have friends overseas who can help you? According to Essential Travel, a third of all gappers will be couch surfing, ie staying with friends and family for some of their trip. One in ten gappers is also looking at travelling by bus and train while overseas, instead of flying, if it is cheaper. And more than a quarter of gappers were heading to cheaper destinations like India or Thailand.

If you own your home, leasing the property will generate some income for you while travelling. It’s a good idea to talk to an accountant before planning your gap year. If you still have a mortgage you could consider renting your house and going to an interest-only loan for a year or two. This will delay the date that your house is paid off, but you might find that you can pocket some of the rent and put this towards your travel expenses. You need to calculate what your outgoing expenses at home are before hitting the road. Remember you still have to pay rates and you will need landlord insurance if you rent out your home. If you are making extra superannuation payments, consider putting them on hold while you save for your travels. I would suggest you speak to an accountant.

Is there any type of work you can do online while travelling? The advantage of taking a gap year when younger is that many countries offer people aged under 25, holiday work visas. Do you know if you are entitled to a passport from another country? Do you have a grandparent born overseas? You might discover you are eligible for a Greek or Italian passport and with a passport comes the right to work in those countries. However getting a passport does not mean you will walk into a job overseas. You might be lucky and find some manual labour like fruit picking when travelling. Again look at every option when planning your gap year.

Consider house-swapping

There are a number of websites which can put you in touch with someone overseas who wants to house-swap with you. You live in their house for a set period of time, and they live in your house. If you sign up to this you are committed to staying in one place, but the upside is that you will be totally emerged in that culture. It is a chance to learn the language and history of the country.

Very few people regret taking a gap year. Most remember their year overseas as a life highlight, but do not be mistaken – this will not necessarily be easy. There will be difficulties and setbacks along the way, but the most challenging experiences are often the most rewarding…a