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Who Pays for Generation Gap?

By Sylvia Pennington

2nd November, 2014:  Sun Herald, WA Today, Sunday Age, Canberra Times, SMH

Sylvia Pennington asks who funds the trip of a lifetime – the Bank of Mum and Dad, or savings from after-school jobs?

Digging wells for orphanages in Cambodia or pulling pints in the local George and Dragon in Britain – taking an extended end-of-high-school break or gap year has become a rite of passage for many Aussie teenagers.

But who’s picking up the tab for their globetrotting adventures? Are young people flipping burgers and saving their babysitting money to pay their own way – or is the gap year yet another drain on the Bank of Mum and Dad?

Not in my case, says Hannah Moir, a Year 12 student at Sunshine Coast Grammar School in Queensland. Come April next year she’ll be heading to Tanzania for a 3½ month stint as a volunteer English Teacher in Zanzibar and Moshi in the Kilimanjaro region, organised by gap-year travel company Antipodeans Abroad.

“I will be teaching basic English to children three to five years old at a local nursery school, and Masai men aged sixteen to twenty-five who work in local hotels as security and want to improve their job opportunities,” Moir says.

She’s expecting little change from $10,000 for the experience; including placement costs of about $6000, airfares upwards of $1000, visa fees, vaccination costs and spending money.

The bulk of the funds will come from her own pocket. Moir says she’s been stashing pocket money and wages from her part-time job at Amart Sports since early high school – initially in a home safe, but more recently in a high interest account.

“Since about Year 8 I’ve been keen to take a gap year after finishing Year 12, yet it wasn’t until the start of the year that I decided to volunteer,” she says.

“However, as I’ve always had the gap year in mind, I’ve been cautious to save and earn money wherever I could.” A fund raising drive by her school is expected to add an additional $1000 to her kitty.

Sarah Clark, the Asia Pacific General Manager of youth tour company, Topdeck, says travelers typically divide into two groups: those who take a holiday of about a month, and long-termers who combine travel with work and stay away for a year or more.

The company’s research shows an average budget for a gap year experience is between $5000 and $8000; a sum not many school leavers can pony up.

“We’ve seen a rise in the number of gap year travelers receiving support from their parents to help fund their trips, either by covering the entire amount or partially funding a trip,” Clark says.

Mum and Dad chipping in a four-figure sum is a phenomenon confined to affluent households – as is the whole gap experience, according to NSW Secondary Principals’ Council President, Lila Mularezyk. She says students from poor families who work part-time are often required to contribute to the household as well as cover their personal spending needs, and have little opportunity to save significant sums.

“It’s exceptionally difficult for most families to fund a gap year in lower socio-economic communities,” Mularezyk says. “It’s way out of the norm.”

Working to pay at least some of their own way and budgeting for their travels can provide teens with as many life lessons as the break itself, Darren Withers, the Head of Strategic Advice at financial planners, Elston Partners, believes.

The benefits include the habit of putting money away regularly and the sense of satisfaction that comes from setting and achieving a long-term financial goal. “At the end of the day, if you haven’t experienced pain, or it hasn’t cost you anything, you don’t value it – you don’t value what’s been given,” Withers says.

Meanwhile, young people who borrow money to fund their gap experience, or go wild with newly-acquired plastic, may be setting themselves up for years of financial pain.

“Large credit card debts and loans can put people on the back foot for the rest of their lives. It’s a huge bump to get over, especially when HECS fees come hot on its tail. It’s a terribly big mistake to go into debt to fund something like that,” Withers says.

Budgetary concerns have seen Sydney teenager Zac Quinlan condense his original plan to spend three months abroad down to a three week tour of Nepal and India in December.

Quinlan’s airfare was an 18th birthday present from his mother, and the balance of the $3000 holiday will come from a savings account he’s been contributing to since school banking days.

Wages of $90 to $110 a week from a part-time cleaning job are deposited into the account, which has traditionally been reserved for major purchases, while pocket money from household chores covers his regular spending.

Quinlan says he researched the idea of travelling for a full year back in Year 10, but discovered he would need to get an additional job to pay for it. He reduced his expectations to three months and, more recently, wound them back again.

“It’s down to money,” Quinlan says. “Three weeks is enough time to go and enjoy myself thoroughly but not make myself broke or have to work my arse off. My aim is stay with a healthy bank balance. It will go down but not to zero.”

Cutting the Costs:

Tight budget but still want to go? Travel site GoOverseas.com has some tips to help young people trim the tab:

• Choose cheap destinations:  South-East Asia offers more bang for your buck than Western Europe or the US.
• Book early:  Most things are cheaper in advance.
• Let go of luxury:  Save cash by travelling overnight and don’t turn up your nose at hostel dorm rooms.
• Eat cheaply:  Avoid the tourist strip and eat with the locals.
• Stop drinking:  or stop doing it as much. Hitting the bars and clubs adds up fast.