We’ve all been there. You’re overseas by yourself for the first time, you go to buy your fifth baguette for the day and you realise: you’re fresh outta cash.
Then comes the hurried dash to the nearest payphone or internet cafe to sheepishly beg your parents for a tiny little funds transfer to save you from starving.
Sound familiar? Turns out you’re not alone. New research has found that more than half (58 per cent) of us have called upon the bank of mum and dad to help fund overseas adventures. What’s more, 16 per cent admitted to never repaying their patents.
Compare the Market commissioned a survey of an independent, nationally representative panel of 501 Australians who travelled overseas between the ages of 18-35 on a holiday, student exchange or working holiday to find out how young people pay for travel.
The findings revealed that young travellers budgeting skills aren’t up to scratch, leaving their parents to foot the bill.
Nearly a quarter (22 per cent) admitted their parents, guardians or other family members sent them money less than a fortnight into their trip, while 38 per cent needed financial assistance 2-4 weeks in.
The survey also asked the reasons for the required funds and presented six scenarios: running out of money, weren’t able to afford the cost of living, had unexpected expenses arise, weren’t able to work while overseas, received the money as a gift, or money was stolen. The most common reasons given were unexpected expenses arising, with nearly half (46 per cent of respondents) citing this reason. Running out of money was the next most popular excuse at 44 per cent, while a further 17 per cent realised they were unable to afford the cost of living.
When asked how much money their parents sent in total, 59 per cent said up to $1000, 17 per cent said between $1000-1500, and one in ten (10 per cent) said a whopping $2000-3000.
What’s more, 45 per cent of young travellers who required money from their parents admitted to not paying them back in full. This includes 16 per cent who have never repaid their families and 29 per cent who have only partly paid back the money.
Here are some tips from Compare the Market on how parents can avoid having to dosh out cash for their kids next jaunt overseas.
1. Make sure they’re insured! To financially protect yourself against the unknown while abroad such as cancellations or delays, unexpected medical costs or even stolen money or belongings, consider purchasing travel insurance.
Depending on the policy level and sub-limits, some insurers will cover between $2000-15,000 for lost, stolen or damaged luggage and personal effects. Remember that you must get a written police report within 24 hours of the incident occurring otherwise, you may not be covered for the lost or stolen item.
2. Pay in the local currency when using EFTPOS. When making payments with a debit or credit card overseas, some EFTPOS machines will ask whether you’d like to be charged in Australian dollars or in the local currency.
Opt to pay in the local currency as you’ll avoid incurring a foreign currency conversion fee charged by overseas banks. Be aware that your card issuer may still charge you an international transaction fee as you are making payments overseas.
3. Beware of taxi scams. Tourist destinations are often riddled with unlicensed taxi drivers who operate without a meter to hike up their rates to scam tourists.
To avoid being ripped off, always ask the driver to use the meter or make sure you agree to a fare before entering the vehicle. Some of the most common areas for unlicensed taxis are airport terminals. It’s recommended that travellers always look for an official taxi rank. Alternatively, pre-book a transfer so you can budget it into your expenses.
4. Compare international money transfer providers before sending money abroad. If you’re sending money to friends or family overseas, compare international money transfer providers first to avoid steep fees and poor conversion rates.
5. Research your mobile phone options before departing. To avoid paying exorbitant fees on your mobile phone bill, check whether your phone provider offers an affordable, international-friendly phone plan option as it will be more expensive to use roaming while overseas.
Many places offer free WiFi so consider taking advantage of this or buy a local SIM card at your destination.