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Yep, you can travel now and save for the future


Published 11 July 2018

You can spend money on what you love and saving for your future, writes Sylvia Pennington.

Savvy young Australians are satisfying their wanderlust while supplementing their super contributions to ensure they can afford to keep hitting the road, at the other end of their working lives.

Gold Coast social media coordinator and Instagram influencer Georgia Kelleher thinks she has the balance right.

Prudent spending and saving habits have meant the 23-year-old is able to salary-sacrifice an additional $50 to $100 a fortnight to her superannuation, save for a house deposit and dust off her passport a couple of times a year.

“My partner Jack and I both managed to get jobs quite quickly after uni,” Kelleher says.

“We don’t tend to spend a lot of money on going out and we’re both really into travel so it’s easy for us to dedicate money to that, something we both love to do.

“Travel is such an important part of finding out who you are and what the world is really like – it’s given me a perspective on life I just couldn’t have gained from reading or learning in a classroom.”

The couple aim to do a long trip over Christmas and expend the balance of their annual leave on a second holiday during the year. Together they’ve taken in the US, the UK, France, Italy, Japan and a string of destinations in the Asia-Pacific region.

Trips have cost her an average of $4000 apiece; justifiable splurges for once-in-a-lifetime experiences, Kelleher says.

A generation on the move

Millennials are a generation on the move – they travel more than any other demographic, including Baby Boomers, and are likely to up the air miles even more, as their incomes and wealth build, according to research published by The Nielsen Company in 2017.

A global survey by Airbnb in 2016 found many Millennials prioritised travel over buying a house or car or paying down debt.

Around two-thirds of survey respondents said travel was an important part of their identities and lives.

Smarter spending

Being strict about saving and mindful around spending enables Kelleher to save around 40 per cent of her pay packet.

Using her employer’s salary-sacrifice scheme and transferring money automatically into a separate savings account makes it harder to dip into funds earmarked for superannuation, long-term investments and globe-trotting good times.

“There’s that expression, ‘money burning a hole in your pocket’,” Kelleher says. “I don’t want to even put the money in my pocket – just take it away and I won’t be tempted.”

Small purchases can collectively punch a big hole in the bank balance over the course of a year and finding ways to circumvent them can mean more cash to devote to the things that matter.

“I make my lunch as much as I can and if I do have to buy it out, I don’t spend more than $10,” Kelleher says. “I keep it cheap by doing things like going to a grocery store in my lunch break instead of a fast food place and when I need to buy things, I look around for the best deal. I’ll shop online with coupons and if I’m considering a big purchase, I’ll sleep on it for a while, to make sure I really want it.”

Fun and financial security

Cordoning savings off from your everyday account, transferring money into a holiday fund each payday and salary sacrificing even $25 a week into super can help ensure fun and financial security aren’t mutually exclusive, according to Rising Tide financial adviser and fellow Millennial Sam Jewell, who was an AFA Rising Star finalist in 2017.

“Young people tend to spend because they’ve got it there, so the trick can be finding ways to segment your funds and make yourself accountable for putting money aside for things like travel, a house deposit and retirement savings,” Jewell says.

“Unfortunately, a lot of Millennials think of their super like monopoly money – they can’t access it, so it’s not real – but it’s such a tax effective way to invest and save for your future.

“Because they have a long time to retirement, making small, incremental changes now – putting away amounts they won’t miss, cash flow-wise – can make a really significant difference, without crimping their lifestyle.”

See the impact of an extra $50 a week’s super on a $10,000 balance from the age of 20 here.
 


Side-hustle savings

Developing a side hustle as a social media influencer has helped Kelleher showcase her marketing talents and trim the tab for her overseas trips.

“Travel can be quite expensive so I’ve used my professional experience to build my own brand,” she says. “I quite quickly got to 40,000 followers on Instagram and then venues started to contact me. I’ve had the opportunity to stay places and have experiences for free, in exchange for sharing photos with my followers.

“Millennials are digital natives and it’s easy for us to use the skills we’ve picked up to save – or make – extra money on the side.”

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