So you want to... go travelling?

Travelling as a new graduate is definitely possible, but there are some things you can do to set yourself up financially before you jet off. Because, as much as we'd love to just book that ticket without giving our finances a second thought, that's not always the smartest choice.

1. Sort out your student loan before going overseas

Student loans are interest-free while you live in Aotearoa New Zealand, but once you have left the country for about five months out of a six month period, your loan will start accruing interest. This won't affect you if you're just heading away for a short holiday, but if you're planning on travelling long-term or living overseas for longer than six months, your student loan is definitely something to consider. Have a read of the IRD guide to what happens to your student loan when you go overseas so you can plan for this.

If you decide you'd rather pay off your loan before moving overseas, check out our top tips for getting rid of student loan debt.

2. Can I be a nomad but also set myself up for retirement?

The short answer is yes. Just because you want to be a globetrotter for a few years before settling back down in New Zealand, doesn’t mean your KiwiSaver account has to suffer.

If you keep your KiwiSaver account balance growing while you're overseas through voluntary contributions, you'll probably have a healthier nest egg when you eventually return home. Equally, you don't have to contribute anything to your KiwiSaver account while you're travelling or working overseas if you don't want to.

Keep in mind that even if you do contribute to your KiwiSaver account while living overseas, you won't receive the Government contribution as this is only given to people who live in Aotearoa New Zealand. 

3. Do your pandemic prep

Before you head off on your big adventure, make sure you do some pandemic prep, including checking the cost of your travel plans. As you can imagine, the pandemic has pushed airfares up, and there aren't as many bargains as there used to be.

There are still border requirements for entry into some countries, so it's best to have a clear understanding of what restrictions you'll encounter, what the isolation requirements would be if you were to catch COVID-19 while travelling, and what kind of documents or tests you'll need to have prepared for each destination you want to visit. Head to the Government's Safe Travel website for more info on travel in the COVID era.

4. Sort your travel insurance early

Travel insurance is often the last thing you want to think about when you're off on holiday, but it could really save your bacon in case of an emergency. Different policies will have different exclusions or limitations though – some policies exclude activities like skiing or snorkelling, some won't cover you for hiring scooters or motorbikes, and some don't cover any injuries that happen after you've consumed alcohol. Cover for COVID-related disruptions or cancellations varies too, so make sure you do your research and find travel insurance cover that suits your plans – if you do end up in a sticky situation, you'll be grateful you sorted it before you left.

If you have MAS Contents insurance and end up losing a bag overseas, MAS will cover the cost of your lost luggage up to the value of $50,000*, plus the cost of any individually insured items within the bag. Also, not to take things down a morbid route, but if you pass away due to a sudden accidental event, MAS will pay $20,000 to your estate.

Have a read of a few more great tips on how to protect your gear when you're travelling. 

*Please refer to your MAS Contents policy for details. 

5. Travel money cards

If you're planning on travelling for a long time and jumping between different countries and currencies, there are travel card options that will help you avoid too many ATM fees and give you the best exchange rates. You can load multiple currencies onto a money travel card, and the exchange rate is locked in at the time that you upload the money, meaning if the exchange rate changes after you've loaded your money on to it, you won't be affected.

MoneyHub has an awesome guide to travel cards, highlighting the pros and cons of each type of card.

6. Sending money home

If you end up living overseas and need to send money back to Aotearoa New Zealand – for example, to make a voluntary contribution to your KiwiSaver account or student loan repayment – look at options other than transferring via your bank. Money transfer services often have lower fees and exchange rates than banks.

Take a look at the different money transfer services available in Aotearoa New Zealand, including fees, how long the transfer takes, and other valuable information.