Prepare your finances for the trip of a lifetime

With exam season drawing to a close, students considering a gap year can put some simple financial steps in place now to help make their money for the trip last longer.

Steve Willey, head of travel money at price comparison site moneysupermarket.com, said: "A gap year is a wonderful opportunity to experience different ways of life and see other parts of the world. But such a big adventure requires careful financial planning, especially as graduates and students get so little education on money matters.

"Students generally have a very sparse credit profile so their best approach is to go to their current bank and ask what products might be made available to them. It might seem like a dull start to such an exciting event, but students need to make direct contact with their bank to have a chance of being offered the best deals.

"A gap year is great unless it becomes a gap half-year due to you running out of money halfway around the world."

moneysupermarket.com financial tips for gap-year travellers are:

Savings

While many 'gappers' work their way around the globe, others actually have the means to save before they go. Those who are saving cash to fund the trip should seek out the best deal. There are four easy access savings accounts - from Birmingham Midshires, Bradford & Bingley, Alliance & Leicester and Abbey - all paying 6.5 per cent or more.

Debit cards

Students should try to get a Nationwide Flex current account because it is the only provider that doesn't make foreign currency charges on purchases and cash transactions anywhere in the world. When making repeated purchases overseas, banking with Nationwide can save travellers a bundle. For example, a €100 withdrawal with a Lloyds TSB debit card will incur a £2 transaction charge plus a 2.99 per cent foreign exchange fee.

Travellers should check their provider is able to supply a replacement debit card within 24 hours in an emergency, and that it will be delivered worldwide. They should also ensure they have the emergency telephone number close to hand.

Credit cards

Gap-year travellers may find it difficult to get a credit card, so a good alternative is to see if your parents will add you as an authorised user. But whether it's your card or theirs, you need to make sure it doesn't have too many nasty charges. Nationwide Gold, Abbey Zero, Post Office Platinum and Thomas Cook are the best credit cards for making overseas purchases as they don't levy foreign exchange fees. This is a far better prospect than their rivals that generally charge between 2.73 and 3.0 per cent.

Overdrafts

Those who have spent at least a year at university will probably have a bank account with an overdraft facility. But for those going on their gap year after finishing school, it can be difficult to get an overdraft. Contacting your local branch is probably your best hope.

Prepaid cards

If you are stuck with an uncompetitive debit or credit card, the FairFX and Caxton FX prepaid cards are a good option. They can be topped up easily by your parents if they have the desire and wherewithall to do so - and you can't spend money unless it is on the card. Beware of rival prepaid cards that often charge an application fee, a monthly fee and usage fees.

Mobile phones

Mobile users have three main options during their gap year. If you are staying in one country for a while then buying a local Sim card is your best option, but if you are globetrotting then you need to weigh up whether buying a global Sim card or signing up to your provider's international discount tariff is likely to work out cheaper.

Travel insurance

Comprehensive travel insurance covering you for the entire duration of your trip is essential. With policies varying widely, you need to check if you are covered for things such as work or extreme sports. For example, 12-month worldwide gap-year cover with 24/7 Insurance and Swiftcover includes bungee jumping, paragliding, scuba diving, water skiing and white water rafting - and often comes in cheaper than rivals that don't include these.

You should also ensure your cover limit takes account of expensive items such as a camera or iPod. In general, insurers will not cover your belongings if they are not adequately secured while you are away. It is also important to remember most policies have clauses relating to the consumption of alcohol, so it pays to tread carefully.

moneysupermarket.com recommends at least the following level of cover:

Medical expenses: £2 million
Personal liability: £1 million
Cancellation: £3,000 (or at least the value of your holiday)
Baggage: £1,500.

Steve Willey added: "Before leaving, gap-year travellers should photocopy details of their financial products and give them to a trusted family member. It will make life a little easier in an emergency.

"Not getting the right products now could mean having to cut a trip short or being stranded with no money, which is no way to end a great adventure."