These ideas are useful whether you’re still in the planning stages or have hit the road already and need help balancing the books
Have you always wanted to take the big trip and travel around Australia in your RV of choice but wondered how you would plan and pay for it long term? It’s a question that appears on camping and caravanning groups on Facebook all the time, and the range of answers is wide and somewhat confusing.
The main problem? Everyone is different. Some of us are couples, some are families, some will have an income while we travel and others have to earn their money as they go. Strangely enough, the day to day finances are not too dissimilar to those while you’re living at home but it’s the unknown or the emergencies that catch travellers out.
Here we look at six ways to prepare yourself financially for the big trip and how to ensure you always have enough money for the everyday expenses, the occasional splurge and, most importantly, for the unforeseen emergency.
1. Start Saving now
It’s one thing to have an income for the time you’re away, however, the chances are it will be greatly reduced from your normal working wage. That’s because very few of us have 12 months of full-paid leave up our sleeve. The most we could expect is between six and 12 months leave at half pay. Now, you may well not spend anywhere near as much as you would when living at home but, the fact is, you will not have the same money coming into the bank each pay period. Therefore it makes sense to build up a pot of money before you leave to tap into when needed. How much this needs to be may depend on your level of preparedness you want to achieve. If you consider the worst possible situation that you may find yourself in, such as a cooked engine or a similarly serious mechanical breakdown, you may want to have at least $20,000 available at a moment’s notice. You may also need to fly home for a family emergency and depending on where you are and how many of you there are, it could cost that much and more if you have to arrange to truck your rig back home. All food for very serious thought.
2. Practice living to a budget
Today’s cashless society has made it all too easy to spend money, particularly money we don’t have. Here’s a little tip financial planners will charge you a fortune for. Go back to paying cash for everything. Set yourself a budget for each individual aspect of your life. Food and groceries, car fuel and maintenance, pet expenses, etc. Add all this up and take out this amount of cash at the beginning of each pay cycle. Split the money into various envelopes for each expense type and avoid using the credit cards or EFTPOS. If you have any cash left at the end of the pay cycle, put this towards the next pay cycle and only withdraw the difference or put the remainder into a special savings account. You’ll be surprised how much you can save using this method of budgeting.
3. Use a Bonus Savings account
This money you’ve saved up could be placed in your normal everyday bank account, but it’s not really doing much for you there. Instead, put it in one of those bonus saving accounts where you earn extra interest if you make at least one deposit and no withdrawals in a month. Put any money left over from your cash budget into this account as well. This extra interest builds up over time, and your money is available immediately should you need it.
4. Start a piggy bank
I know this sounds a bit childish, but if you put all the coins and $5 notes you get as change from dealing in cash into a large money box, over the course of a few months, you could easily save in excess of $250. We have done this for several years including our time on the road and each time we have opened the tin we collected $400-500! Enough to spend on ourselves for some fun like a nice dinner experience or a tour that we may not have done otherwise. We actually look forward to filling the tin so we can see how much we’ve saved. It’s a simple trick that can have a huge, positive impact on your trip.
5. Don’t overspend when stocking up on supplies
When we started out on our trip we thought it would be a good idea to do bulk grocery shopping so we weren’t spending money all the time. This turned out to be false economy. We ended up throwing out a lot of spoilt food because we didn’t use it fast enough and a lot went off. We now buy only what we need for the time we have access to shops and have much less waste as a result. It also means we spread our spending over many more towns, helping small, and often struggling, local economies. If we know there’s a farmers market on while we’re in a town, we will get some of our supplies from there too. It means we get to sample the local produce along the way.
6. Install a safe in your RV
A safe is a great way to set aside money for a variety of purposes well before you need it. If the safe is in a slightly inconvenient location, such as the back of a cupboard or behind a drawer, anywhere that requires some effort to get to it, then you’ll be less likely to raid it for other unnecessary expenses. We have money set aside for things like emergency medical bills for us or the dogs, entry fees to places we plan to visit, even fees for ferry crossings we know we will have to pay at some point. It’s all there, in individual envelopes, ready to go when needed.
You’ll notice we haven’t tried to tell you how much money you will need week to week. There’s a very good reason for that. Everyone’s situation is completely different to everyone else’s. What works for one family may not work for another. Some people need to eat gourmet meals every day and some are happy to eat baked beans on toast for lunch 5 times a week. I know for the two of us and our two dogs, we budget $1,000 per week. Some weeks we spend less than this, sometimes more but it tends to average out. We’ve noticed we spend much less when we’re stationary for a period of time than when we’re on the move. The key is to set that budget, stick to it and ferret away as much of your savings as you can so you can treat yourselves from time to time.