We are a nation that loves to travel, with millennial travellers spending a whopping $11.3 billion overseas per year – the most of any age group according to Westpac’s 2016 Travel Finance Report released today.
This equates to 15 per cent more than Baby Boomers, who spent $9.8 billion on overseas travel and 66 per cent more than Generation X who spent $6.8 billion.
Ashley Gray, Westpac’s Head of Youth and Millennial markets said, “We know that Aussie millennials love to explore the world in pursuit of amazing experiences, with the USA, UK and Europe being the most popular destinations. With the average trip costing $3,461 however, Aussie millennials need to plan ahead and make sacrifices in order to save enough money to make their travel dreams a reality.”
The study also shows that millennials are being responsible and budgeting ahead of their trips, with 70 per cent saving for their trip for an average of eight months ahead of going away. They also make sacrifices while abroad to save cash, including walking instead of getting a bus (50 per cent), missing out on seeing tourist attractions (28 per cent), going without beer (22 per cent) and skipping meals (19 per cent).
Mr Gray added, “Millennials are clearly thinking about how they can save ahead of their trips, but they need to be just as financially savvy once they’re abroad. Rather than sacrificing on visiting attractions or transport, millennials should consider alternative opportunities to save that don’t impact their experience.
“I encourage millennials to thoroughly research their destination and create a daily budget that takes into account current exchange rates and the cost of food and drinks, transport and sightseeing – it’s important to be realistic.”
The report revealed seven in 10 (70 per cent) millennials withdraw more money per visit to the ATM while abroad, compared to at home in Australia ($206 and $92 respectively), primarily to minimise ATM fees (64 per cent).
However, carrying more cash does appear to have a negative impact on millennials, with half (50 per cent) saying it makes them feel worried about being pickpocketed, mugged or losing the money, and over a third (36 per cent) saying they feel self-conscious about the value of the money by local standards.
Furthermore, 83 per cent of millennials change their behaviour when they are carrying large amounts of cash overseas, including not opening their wallet or purse in case people see money (42 per cent), being reluctant to leave bags in hostels / hotels / lockers (41 per cent) and hiding money on various parts of their body (31 per cent).
“Millennials feel they need to withdraw extra cash to avoid fees, but then feel vulnerable carrying that extra money. With Westpac’s Global ATM Alliance, ATMs are easy to locate via Westpac’s mobile banking app, meaning travellers don’t need to wander foreign streets searching for a withdrawal fee free ATM,” said Mr Gray.
Tips for managing your finances while travelling overseas:
- Do your research. Understand the value of the Australian dollar in your travel destination, so you’re not over estimating (or under estimating) your spending. Use the Westpac mobile banking app to pinpoint the exact locations of the Global ATM Alliance ATMs in the area you’ll be travelling to, so you know exactly where to go to avoid ATM withdrawal fees as soon as you touch down.
- Create a budget. Create a daily travel budget that takes into account current exchange rates, the cost of food and drinks, transport and sightseeing expenses. It’s important to be realistic when planning a budget – this is where researching prior to your trip will really come in handy.
- Don’t carry wads of cash. While you’re on holiday you can often let your guard down – the more you have on you, the more you have to lose in the unlikely event that you’re pickpocketed or a victim of theft. Accessing your cash via Global ATM Alliance ATMs means you can withdraw the right amount of money each time you use an ATM, without worrying about ATM withdrawal fees.
- Resist impulse buys. It’s easy to get carried away when you’re on holiday and to justify a lavish purchase that you’ll (almost certainly) never use when you get back home. Controlling your impulse buys prevents suffering from buyer’s remorse down the track. Handmade Moroccan rug for $3,000? You can probably go without it.
- Book in advance. Take the time to book as much as you can in advance such as tourist attractions, tickets to shows and accommodation to avoid having to break your daily budget due to last minute peak prices.