The true cost of taking a gap year
If you or someone you know is set to graduate from university this year, then you’re probably well aware of how tough things are. Unemployment levels are rising and many companies are on a recruitment freeze, making it hard for those finishing their studies to secure a job.
No wonder 54% of graduates have decided to ditch their job hunt and take a gap year instead, according to a survey by TMP Worldwide. While the temptation is to see a bit of the world by travelling, do some work experience or simply take some time off while the recession runs its course is understandable, taking a gap year can be expensive and could impact your career down the line.
So, with money tighter than ever and the risk of returning to a job market that is even tougher to crack, is taking a gap year such a wise move?
Should I go on a gap year?
The end of university can be a culture shock for many students, as it means having to knuckle down and face reality. But for the current crop of graduates, getting into the real world is harder than it has been for many years and the frustration of not being able to find work is a difficult pressure to deal with.
“If you get offered a job that you are happy with then take it,” says Tom Griffiths, founder of gapyear.com. “Don’t cut off your nose to spite your face or assume that you can come back and just pick up a job really easily.”
But what if you can’t find work or don’t know what area you would like to work in? For many people, taking a gap year is the perfect way to take time out to make some important decisions and is arguably a better use of time than staying at home. After all, there won’t be many times in your life when you are free of financial ties like a mortgage or any dependants.
One of the most popular options is for people to go travelling. Champions say seeing the world broadens the mind, throws up some interesting opportunities for work experience and – last but not least – can be a lot of fun after three years of study.
An alternative is doing work experience or volunteering – either at home or abroad.
“Look on a gap year as a positive - instead of being unemployed and looking for work or stacking shelves for a year, use the time to go on a gap year,” Griffiths adds.
With the job market closing in, it’s not enough now to just finish your degree and walk into a job – which is why so many graduates are struggling to find work. Showing you’ve got something extra to offer will help make you stand out.
While many companies are not hiring at the moment, and there is fierce competition for jobs, there are plenty of opportunities out there for interns prepared to do a days graft for little or no financial reward other than the prospect of a more impressive CV down the line.
It’s important to use your time as wisely as possible and if you have any idea career–wise about what you would eventually like to get into, use your gap year experience to demonstrate your skills in that particular area.
For example, if you are looking at getting into the care industry, perhaps as a doctor, nurse or speech therapist, a work placement at the most basic level will give you an insight into the industry and help develop your bedside manner.
“You will get valuable hands–on experience and working with the ill and disadvantaged is invaluable to your career development,” says Richard Oliver, chief executive officer of yearoutgroup.org.
You can also combine work experience with travelling. For example, getting into the conservation world can be notoriously hard - on one hand, you need experience to get a job and on the other you need a job to get experience. Oliver thinks that volunteering on a gap year conservation project can get you over that hurdle.
Even if you can’t get a placement that is relevant to your future job plans - or if you don’t know what career suits you - all experience can be seen as good experience when it comes to improving your CV.
Whether you decide to spend your gap year blitzing around as many countries as possible or end up staying in one place on a voluntary placement, being exposed to different cultures is a great learning curve.
You are learning to engage with all sorts of people, having to look after your travel arrangements, show initiative and the ability to compromise when travel plans change and, most significantly, show that you are independent - spot the CV buzzwords.
Financing your gap year
Sadly there is no quick–fix way to make money for a trip abroad. Although you might struggle to get a long–term job, you can still find work in bars and cafes by signing up with temping agencies or by seeking employment in your local supermarket.
Provided you are prepared to put in the hard graft, you could build up a sizeable travel fund in a short period of time – especially if you work in a combination of jobs and are able to live back with your parents on the cheap.
Grants are a great way of funding a significant part of your trip; Oliver reasons there are probably between 10 and 20 different trusts that each individual is eligible to apply for to finance work experience or volunteer work abroad.
The Directory of Grant Making Trusts lists all the possible trusts you can apply for grants from. It divides into numerous categories including county, education field and type of trust. The book costs around £100, making it an expensive resource, but most libraries should carry a copy. You can also look at grantsonline.org.uk to get an idea of what is on offer.
“The credit crunch means there is not as much money in trusts at the moment as in the past, but on the upside fewer people are applying at the moment,” says Oliver.
He advises people to telephone the trust as the first port of call and speak to the administrator to say you would like to apply. Then, send a letter outlining your request and explaining what you are planning. You could also offer to do something after your trip, such as a report in the local newspaper.
Raising the money to fund your trip yourself can also be rewarding; think about doing a sponsored run, hosting a quiz night or organising something a little more leftfield such as a shaved head sponsorship. If you get enough interest you can raise a decent amount of money. Go to ideasfundraising.co.uk for more inspiration.
Managing your money abroad
The age–old principle of budgeting comes into its own when you are overseas. With a set amount of money tucked away and no (or very little) extra income to rely on, you have to be strict with yourself.
“You can get by on £5 a day in Thailand if you’re careful for example,” says Griffiths.
Oliver recommends carrying a credit and debit card with you plus a couple of decoy old cards, to hand over to muggers in worst case scenarios. Make sure you let your bank or provider know where you are heading, because if it spots any unusual transactions it may cancel or freeze your account.
If you haven't already got a credit card, then consider applying for a card that offers a good deal on overseas transactions. For example, the Post Office and Abbey both waive overseas transaction charges on their respective credit cards, while other providers charge a fee of up to 3.75%.
Although it might not feel like something an independent traveller would do, making your parents signatories on your account avoids the hassle of expensive overseas calls to you bank if they stop your card working abroad. Your parents can confirm with your bank that your card is being used legitimately.
Cash is also a must; whether you plan to stay put in one country or move around, make sure you take enough hard cash with you so you aren’t stuck once you get off the plane. As with holidays, don’t wait until the airport to change your money – you’ll find this is one of the most expensive places to buy currency. The same goes for banks, where commission can be high and the exchange rate is rarely the most competitive.
Generally speaking, Marks & Spencer and the Post Office are good places to change currency, but you could also try online to see if you can find a more favourable exchange rate.
Travellers’ cheques are also a good idea – according to American Express, a British traveller abroad is a victim of theft every 31 seconds. While cash can’t be replaced, travellers’ cheques can no matter where you are in the world.
This method of carrying cash is also fairly straightforward – simply buy your travellers' cheques in advance and make sure you sign them. You should also keep a note of the serial numbers in case they are lost or stolen.
When you're ready to cash in a cheque, all you need to do is find a travel agency, hotel, bank or money exchange bureau that accepts them. American Express is one of the largest suppliers of travellers’ cheques, and these are accepted around the word.
As well as taking your debit card, converted cash and travellers’ cheques with you, you could also consider pre–paid cards especially if you are worried about getting into debt. FairFX Dollar and Euro cards are top of the best buys at the moment, followed by the Post Office Travel Money Card. As well as putting an initial amount on the card, users can add small amounts of money to their card during the year too.
Of course, if you plan your trip through an organisation then there is less need to worry about everyday budgeting because all your costs, apart from spending money, are arranged in advance.
“Going with an organisation means the chances of expectations matching reality are good and if you are unhappy they can usually rearrange something new for you but there’s a price for that,” says Oliver.
Do your research and find out as much about the organisations you are considering going with. Ideally get in contact with someone who has just come back from a similar placement to hear their feedback too.
Regardless of if you go solo or on an organised trip, the issue of security is extra important with backpackers easy prey to opportunistic thieves.
Make photocopies of all your important paperwork, leave a copy with your parents, email another set to yourself and spread out the documents throughout your baggage.
“I always take $50 with me as an emergency fund too,” Oliver adds.
Finally, don’t forget travel insurance. "You just can’t stint on this” warns Oliver, who recommends that you work out in advance if you are going to go bungee jumping or white water rafting as this is much easier than trying to change your policy halfway through.
Making money abroad
Working while you travel is a great idea in theory but there are a few things to consider first warns Griffiths: “There’s a big myth that you can pick up jobs easily overseas but actually you can’t.”
Not all countries allow tourists to work and for others you need a working visa to do so. If you choose to disregard this and work for cash in hand you could be deported and banned from visiting that country again. Europe, Australia, New Zealand, Canada, the US and Japan all welcome overseas workers, provided you have the correct paperwork.
Be organised and plan ahead; for example if you want to work over the Christmas period in Sydney, you need to be there by the beginning of November – arriving on 1 December will be too late.
Aside from the ubiquitous bar and café work travellers can ofen pick up, TEFL (teaching English as a foreign language) is a great way of earning a decent living while away and for some people this can turn into a full–time career. Look for courses approved by the British council. You can find more details at tefl.com.
Issued by a bank as part of a current account and, in a nutshell, serves as electronic cash. Unlike a credit or charge card, where you get an interest-free period before you have to settle the bill, the funds spent on a debit card are withdrawn immediately from your current account. Unless you’ve arranged an overdraft, if you don’t have the cash in the account, you can’t spend it.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.