About talk
3 parts:
- Saving money for career break
- Organising your money before you leave
- Managing money while away
Saving money for your career break
All circumstances are different and individuals vary regarding what they can save money on. This is just a guide.
Things you can save money on:
- Mortgage
- Investments
- Bills and utilities
- Insurance
- Luxuries
Going to keep a running total on how much we're saving as we go (in a year).
Can't give average figure on mortgages or investments as circumstances vary and it's important to choose the right mortgage or product for you (may not be immediately cheapest).
Mortgage
- Usually save most by switching supplier rather than type of mortgage.
- Could extend terms (better for younger person with secure future)
- Could switch to interest-only mortgage
- Note: have to pay fee to switch
- Check other fees and hidden costs (www.which.co.uk)
Investments
- Make sure not paying unnecessary tax (normally pay tax on all income from interest)
- Make sure your money is getting a good rate of interest
- Put money in ISAs where you can
- Could set up separate savings account for career break - make it hard to access
Bills and utilities
- moneysupermarket.com says average saving on fuel is £180 (uswitch.com says 20% of their users save £325 on gas & electricity)
- uswitch.com says 20% of people saved £140 on their home telephone
- Broadband - if you're with BT and you switch you could save £140 a year (uswitch) - also consider using lower speed
- Turn off anything you normally leave on standby and save £371 a year (figure from uswitch)
- Put a jumper on! Turning the heating down saves 10% on fuel over a year, saving £100 on an average of a £1,000 yearly bill (average annual bill figure from Energywatch)
- Doing it online takes up to 5 minutes
- Total (fuel and phone): £791
Insurance
- confused.com says average savings are:
- £150 on car insurance
- £130 on home insurance
- Total: £280
Luxuries (examples)
- Starbucks grande latte on every work day - £580
- Sandwich every work day - £700
- Can of drink every work day - £130
- Friday lunchtime pint - £140
- Chocolate bar a couple of times a week - £47
- Magazine (£32), gym membership (£380), takeaway once a week (£520)
- Bus instead of taxi twice a week (£624), eat out once a month instead of once a week (£1,200)
- Total: £4,353
- Smokers add £1,800 if you quit
Grand total: £5,424
People who've done it say it doesn't hurt as much as you think it will.
Need more?
- Sell stuff on ebay
- Freelance (if employment contract allows it and you have time)
- Get extra part time job (if it won't tire you)
- Things like Tupperware or Ann Summers parties
Money-saving tips
- There are many, so just chosen favourites
- Book train and bus tickets as early as possible (3 months)
- Set a budget. Write it down. Figure out what you want and what you need.
- Know your own bad habits and avoid them
- Carry plastic instead of cash - less temptation to spend OR only carry enough cash for the day
- Reward yourself occasionally to stay motivated (reward suggestions & schedules are in the money resources section of the Career Break Site, with printable motivation cards)
- Read inspirational books
- Tell your friends what you're doing and why to get support - be easier to stick to your budget when socialising
Organising your money before you leave
People to tell:
- Mortgage company (essential if renting out house and/or changing employment status)
- Home insurance (essential if renting or home is unoccupied for more than 30 days)
- Everyone you pay regular bills to (phone, council, etc)
- Mobile phone company - probably cheaper to change SIM card to foreign one or even get foreign mobile
- Your bank and credit card company (otherwise they may stop your card)
- Ask your bank about online and telephone banking, particularly security (useful info can be found at www.getsafeonline.org)
Money
- Renting out house gives more income while away - much more information on renting out your house here, including tax and legal info
- Move your money into low-risk products (eg ISA instead of shares) - won't necessarily save you money but more secure.
- Reclaim anything and everything you're entitled to - and make sure it goes into your account!
(Use this sheet to help you keep track).
- income tax rebate (can be done on your return)
- council tax
- security bond (if you rent)
- car tax
- TV license
- Try to pay credit card bills off so you have the maximum limit available in case of emergency
- Can prepay on credit card, or set up direct debit to your credit card
- Set up credit card protection so you only have to make one phone call if they all get stolen. Your bank or credit card issuer will usually offer this for around £20 - £30 a year. Usually comes with card insurance which may include emergency cash loan.
- Get comprehensive insurance (usually you can extend your policy while away)
Budgeting for career break
- Budget depends on what, where, when and how long
- If going travelling, talk to travel agent about cheap times to go - sometimes simply going a day earlier or later can make a difference to price
- If volunteering, shop around and look at what is included in the price - and where the money goes
- If training, again shop around and make sure your qualification is the kind you need (eg internationally recognised certificate for TEFL)
- If working abroad, don't make any assumptions about how quickly you'll be able to find a job
- Get a good guidebook (eg Lonely Planet) for your destination and see what it says the daily budget is
- Make a list of what you'll need - use the Career Break Site, guidebooks, travel goods suppliers (eg Nomads) and people who've done it for advice on what to take
- Finally - write your budget down! It'll stop you over-spending. Make sure there's some space in there for emergencies, and, if you can afford it, treats or luxuries (eg nicer hotel on your birthday).
Insurance
- Absolutely vital - make sure it covers you for everything you want to do
- Can usually extend or upgrade your policy while away
- Subscribe to FCO email updates
Remember
- The more time and effort you put in now, the easier it'll be on your career break.
While you're away
Take
- Cash - US dollars as well as local currency are often useful
- Debit card and credit card (take 2 cards because you will almost certainly find one won't work at some point)
- Travellers' cheques - less useful but handy in places with no ATM facilities
- Also consider Travel Money card. You top it up from your current account, the money is in Euros or US dollars, and you use it like a debit card. More secure than debit card (not linked to bank account) and you're not liable for losses. Lloyds TSB offer a Visa one for £7.50.
Budgeting on the road
- Travelling with others is usually cheaper - make friends on road if going solo
- Travelling is about expanding your comfort zone - can mean literally - stay in cheaper, less fancy places
- Don't take loads of stuff - not only does it cost more but you'll be tempted to hop in a taxi, or stay in the nearest guesthouse when you get tired.
- Carry on using your guidebook for budgeting tips (eg Lonely Planet 'Shoestring' guides).
Security
- Using an internet cafe is not recommended by banks
- If you do use internet cafes, be meticulous about logging out and clear the internet browser's cache - also close the browser
- Make sure no-one is looking over your shoulder
- Be aware that the anti-virus protection could be non-existent
- Know that in some places you may not be able to access a private phone
- Be aware that credit card fraud is rising - keep your cards on you and in sight at all times
- Call your bank immediately if you notice fraud
- Hide cash in various places, eg waterproof moneybelt, socks, knickers
If you run out of money
- Can be wired money from home (you need to pick it up in person from the transfer office, with abroad)
- In desperate situation, Foreign Office will lend you money but not willingly
- Careful planning means this shouldn't happen
Finally
- Worrying about spending money on your career break is normal.
- Out of all the career breakers I've spoken to, they've all said the experience has been worth the money.
- When people ask what they'd save in house fire, it's not material possessions like designer clothes, not ready meals, not expensive telly, it's photos. Your career break is a chance to make sure you have some photos worth saving.
