How to save for a gap year
Taking a gap year may not necessarily be for everyone, but it’s certainly an option for those matriculants and graduates that want to take a pause from studying or who aren’t sure what field of study they want to take on or what they want to pursue in the job market. Gap years can be expensive but it’s not impossible to save for them, writes Angelique Ruzicka.
While a gap year is an exciting prospect – a year off without an income can be financially draining, so it needs to be planned for carefully.
“Whether you are a young person who needs more clarity to consider future goals or you plan to travel before settling into your studies and ultimately your career, once you decide about what you want to do in your gap year you need to plan how you will fund this lifetime experience,” says Stephan Buys head of strategic business development at FNB Cash Investments.
If you want to save for your gap year so that you can afford to take a break as you travel around the country (or around the world), consider these tips:
- Set your savings goal
According to Gapyear.com, the average luxury gap year can cost you around £5,000 (over R84, 000). But if you’re happy to make some sacrifices and live in backpackers or other forms of cheaper accommodation you could reduce that cost by a lot.Ultimately, you will need money for food, accommodation and transport costs. Start listing what you want to do, where you want to go, what you’ll need to commute around and create a budget. Set some savings goals too. All of this will help you decide how much you need to save and for how long.
- Open a savings or an investment account
Once you’ve determined your budget, open a savings or an investment account, dedicated to your gap year. Make sure you take the time to find an account that works best for you as savings and investment accounts have different features – consider when you will need access to your money. If you are happy to lock your money away as you need to save for some time, consider some of the fixed options as they tend to give you more interest.
- Get a part-time job before travelling
Consider taking up a part-time job, as you will need to earn money that you can put towards your savings goal. Depending on your current situation, you may be able to take up two jobs, not only will you earn more but you can reach your goal sooner. Your other job need not be office based. There are plenty of ways that you can work from home. Consider online platforms like Upwork and PeoplePerHour which links employers to employees. Or consider doing micro-jobbing or answering surveys on the likes of Answered, which will give you money for each completed questionnaire. Alternatively, if you are crafty consider selling your goods online or at markets to earn extra cash. Working more hours will likely keep you from spending more.
- Cut unnecessary expenses
Cut out or cut down on the luxuries. Try to eliminate the urge to buy convenience foods, daily snacks and treats. Not only are they unhealthy but they will eat into your savings goals and set you back even further. If you spend less you can save more towards your gap year excursions.
- Think about volunteering or taking a gap year job
A gap year doesn’t mean that you don’t have to work. It’s possible to do some work while you’re on your gap year and there are plenty of companies both locally and abroad that specialise in offering these types of jobs. The benefits are huge as you get to explore different places but at the same time get paid or provided with food and accommodation. Au pair jobs, for example, are easy to find in most countries – just make sure that you are suitably qualified to look after children.
While you can take out a loan to finance your gap year, taking on debt will be far too stressful. Unless you are able to pay your debt off as you travel it won’t be nice to come back to debt after you’ve taken a break. It’s best to rather save the money than borrow it and put financial strain on yourself as well as the family member that has stood surety for the loan.
“Taking a gap year is not a cheap exercise; however, it’s possible to take a gap year without incurring debt. What’s most important is to start planning early and ensure the plan is adhered to,” adds Buys.