YOUR MONEY By Naomi Caine

If you are one of the estimated 20,000 young Scots who are planning to take a gap year, you need to plan your finances as well as your route. Steve Willey, head of travel money at Moneysupermarket, says: "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. A gap year is great unless it becomes a gap half-year because you run out of money halfway around the world."

BUDGET
The average traveller spends between £3000 and £5000 on a gap year. So, draw up a realistic budget for everything from tickets and vaccinations to visas and insurance. If you need some help, there's a handy cost calculator at gapadvice.org.

SAVINGS
Some "gappers" work their way around the globe, but it helps to have some savings as a back-up. And the earlier you start saving the better. An easy access account is probably the best option because you can take the money out whenever you want. The best deals at the moment are internet accounts. You can earn 6.51% in Bradford & Bingley's Internet Saver Issue 3. The isaver from Intelligent Finance pays 6.4%, or you can get 6.33% in Birmingham Midshires' e-Saver Issue 2.CURRENT ACCOUNT
You will need a current account if you are planning to travel abroad, so you can get hold of money quickly and easily. But there's a potential problem for young travellers. Most banks and building societies limit the services they offer to people between the ages of 16 and 18. You might not, for example, get a debit card or an overdraft facility.

The best option for gappers is the Nationwide FlexAccount because it is the only account that doesn't levy foreign currency charges on purchases and cash transactions with a debit card. So it can save you a lot of money, particularly if you make regular transactions overseas.

If you aren't eligible for a debit card, you will be given a cash card, which will allow you to withdraw money when you are away, although you will not be able to make purchases on the card.

Travellers should check that their bank or building society 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 will probably find it difficult to get a credit card because they probably won't have a credit history. An alternative is to ask if your parents will add you to their card as an authorised user. But whether it's your card or theirs, you need to make sure it doesn't come with 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 of up to 3%. But don't withdraw cash with a credit card because it can work out expensive.

Pre-paid cards If you can't get a decent debit or credit card, pre-paid cards are an option. You simply load the cards with euros, sterling or dollars, or ask your parents to make the top-ups. You can then use the card like a debit card - and you can't spend money unless it's on the card. The FairFX and Caxton FX pre-paid cards are the best deals, according to Moneysupermarket. Beware of rivals that often charge an application fee, a monthly fee and usage fees.

FOREIGN CURRENCY
You will need to take some foreign currency with you on your travels so you can pay for bus fares or accommodation when you arrive at your destination. You can often get a good exchange rate if you order your currency online. Travelex's "Price Promise", for example, guarantees the lowest foreign currency price in the UK with no commission, or Travelex will refund the difference. Once you've ordered online, you can then pick up your pre-ordered currency at a Travelex bureau in airports across the country. If you are ordering money to be delivered to your home address, some foreign exchange firms will charge as much as £5.

Try and avoid exchanging currency too often when you are abroad because you will have to pay a commission fee for each transaction. The fees can be particularly high in hotels, where the exchange rate might also be poor.

MOBILE PHONES
Most modern gappers wouldn't go anywhere without their mobile - and it can be a good way to keep in touch. But it can also be expensive. If you are staying in one country for a while, you should consider buying a local Sim card. But if you are globetrotting you need to weigh up whether it's cheaper to buy a global Sim card or sign up to your provider's international tariff.TRAVEL INSURANCE
It's easy to forget insurance, but it's essential if you are travelling overseas. Traditional gap-year insurance covers cancellation, missed departure, curtailment, medical expenses, personal liability, cash and baggage. But Brian Wright, managing director of Karmainsurance.com, thinks today's gappers need more. He says: "Policies should reflect the growth in popularity of sports termed as extreme or hazardous and cover accordingly. Equally, they should recognise that people may be visiting remote regions and provide search and rescue cover, plus protect the cost of trips that are independently arranged."

Karma's insurance includes a number of extreme and hazardous sports, such as trekking in remote or mountainous areas, white water rafting, canoeing or kayaking, trail running and riding, snow surfing, tobogganing, bungee jumping and the latest water sport, wakeboarding.

Worldwide gap-year cover with 24/7 Insurance and Swiftcover also includes bungee jumping, paragliding, scuba diving, water skiing and white water rafting - and often comes in cheaper than rivals that don't cover these activities.

The difference in premiums can be big. Karma would charge a 19-year-old leaving in August and returning in July 2009 £160.25 for worldwide travel insurance. The highest quote was £455 from specialist student travel agent STA Travel - that's £294.75, or nearly three times more expensive. Student-friendly insurer Endsleigh quoted the second-highest premium at £444.50. Wright says: "Government statistics reveal that about a quarter of gap travellers will have no insurance. Given the sky-high premiums being offered by the majority of gap-year insurers, I'm not surprised."

You should also make sure you have cover for any expensive gadgets such as iPods - and take care of your possessions while you are away. You might not be eligible to claim on the policy if you were negligent, and negligence can include being under the influence of alcohol!