Taking a gap year between secondary school and higher education offers a variety of valuable opportunities that promote personal growth and experiential education. Often, students schedule a gap year to travel, volunteer or create additional time to explore a degree they want to pursue. Additional work and internships can be done during this time as well, making the transition into college more effective – as they’ve increased knowledge within a specific field of study.
How about you?
With all the excitement and learning opportunities that a gap year can bring, it’s still very important to analyze the way you manage your money. Travelling to a new place or scheduling volunteer trips can affect your budget if you’re not careful. Overspending on booking trips and spending money on accommodation, especially if you’re without an income, will reduce the amount of travel cash you have. A plan for your finances is an extremely helpful guide to handling a gap year like a professional. It’s all about what you want to get out of it.
To develop a financial plan for your gap year, consider these tips!
Devise a Financial Strategy
In most cases, organizing a plan for your money can improve your knowledge on what’s working well for your budget, and what areas you need to revisit. Analyzing your income to identify how much money you’re spending each month is the first step and you’ll gain a better understanding of how you can improve the way you manage your costs, and how they can benefit your personal finances during a gap year.
Opening a savings account and downloading a budgeting app can help you stay on track or change your goals to improve your current financial strategy. Just remember, if you’re making adjustments to your budgeting strategy, give yourself time to re-organize your plan too.
Decide what your most important gap year experiences are likely to be
You will have a great time and learn lots about yourself and the places you visit on a gap year. You could prioritise, fancy accommodation, beaches and bars, over time spend exploring more remote areas or living more like a local. The choice is yours of course but budget accordingly and stick to it until or revise it as needed being realistic about what you can afford and what is going to make you feel it was all worthwhile.
Work out a daily costs for your travel
If you have the time to travel over a longer period and plan smartly you may get more out your experience and your daily budget. Remember, short programs will usually cost more per day than longer ones, so you could consider mixing up your gap year experiences to include, paid work, internships and volunteering. Staying in a few countries and maybe travelling with the same provider, might save you admin costs, flight costs and currency conversion costs while still giving plenty of variety if you travel for 3 months or more.
Use An Online Banking Platform
While traditional banks can provide you with a manageable way to track your budget, an online banking platform offers even more incentives valuable to individuals who want a more in-depth analysis of their financial status. As you receive payments, make deposits and transfer money from one account to another, you can receive notifications in real time alerting you of these changes. Since this tool is in the form of an app on your smartphone, you can receive an option to budget your gap year expenses, build your savings, log purchases and even a way to sink an employer’s payroll plan with your account to get paid before your actual payday. If you are looking for a convenient way to monitor your finances on the go, this could be a great option for you during your gap year.
Start saving now
As soon as you outline your gap year plans, it’s essential to save as much money as you can from the start. This could include opening an additional savings account to contribute to on a monthly basis, or cutting down on costs. Start with going through each payment you’re responsible for as a way to organize your expenses from essential to unnecessary. Some cost you can’t avoid entirely but you could spend less on phone bill extras, food luxuries (takeaway coffee, bottled water) and taxi cabs. Extra expenses like monthly music software’s, movie subscriptions, and shopping trips could be avoided with strict financial goals and proper planning. These additional payments can add up month after month, so eliminating some from your current budget will give you more money to work with.
Once you have a plan, go back over it and see where you can save some extra cash. It can be quite addictive and a good old piggy bank is an easy way to end up with some extra pocket cash, especially if you put away every £2 coin you find.
Financial planning is for life, not just a gap year
Before experiencing all of the positive instances a gap year can bring, it’s important to prioritize some financial planning. Without a strategy for your budget, money can be easily frittered away and spent with little control. A gap year is an excellent learning opportunity for all sorts of reasons. Financial astuteness is definitely one of them and appreciated by parents and employers alike!