Holidays are a great way to spend time with your loved ones while experiencing new places, cultures and people. The Christmas/New Year period is traditionally a great time for Australians to take holidays, both around our country and overseas. And traditionally we spend more on our holidays than we would like. This is because of all the little expenses we often over look. Here are some of the most common overlooked or under budgeted for expenses.
Travel Expenses
While we always plan for the cost of the big travel items such as flights, trains or initial fuel for the car, it is the smaller trips which are often missed. A short train trip for a family of 4 might seem inexpensive, it can cost up to $20 per ride. This can add up after a few trips. Similarly tickets for subways, taxi’s, uber’s and buses can all add hundreds of dollars to your expenses if you stay in an area long enough.
Food/Dining
This can potentially be a big hit, particularly if you are buying 3 meals per day. Most tourist and holiday areas have inflated prices for food. This means you will most likely be paying 20-30% more than you would expect to pay at home. In addition to this, places like the United States where taxes and tips are added to the menu price can add another 10-20% again.
Exchange Rates
The exchange rate you see on the nightly news is not the same rate you will get when you go to a currency exchange agent. If the Australian Dollar is buying 70c US, then you will most likely get about 68c US, not 70c. This 2c difference is where the currency exchange makes its money. It is the same story when you exchange back to Australian dollars. You will potentially loose 4 – 6 cents per dollar if exchanging both ways.
Entry Fees
Generally people flock to popular tourist area because of the attractions that the area offers. And like most popular things, someone has worked out a way to make money out of it. This is generally by charging admission, viewing or usage fees to the best attractions. These are rarely cheap, as the operators know that people are more willing to pay inflated prices due to the effort they made to travel there. For a normal family of 4 or 5, this can be an expensive exercise.
The key to minimising these surprise costs is to do your research, make decisions before you go and stick to them. Too often we decided beforehand not to do something, only to get there and get caught up in the moment and cave in. Being strong and committing to decisions made when not in the moment will potentially save you hundreds of dollars.
If you need help with your budgeting, give the team at Steve May a call and start a conversation today.
You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Sensibly Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website
Nick Shanley, Steve May, Luke Styles and Shanley Financial Planning T/A Steve May Financial Services are Authorised Representatives / Corporate Authorised Representative of Sensibly Pty Ltd, AFSL 533923. Please refer to our website at www.stevemayfs.com.au to reference our Financial Services Guides.
