Research shows we are spending 145% more than expected on our holidays and just over a quarter of travellers are using credit cards and overdrafts to fund it.* It’s not good idea to rely on credit if you’re not in a position to pay it off quickly and beat any interest that may take effect. Here are our tips and advice on saving up and preparing for your holiday in advance so you don’t return with money worries still on your mind.
Cut back on luxuries
A little goes a long way, so aim to cut back and economise on some of your luxuries and put the money you save from that into a separate account for your holiday savings. You might think it’s difficult but you could muster a few months of maybe cheaper own brand items over branded, especially where you might not notice the difference like washing up liquid so you can instead enjoy a week at a luxurious hotel. We know which one we would choose!
If you can’t live without any luxuries, then set yourself a small budget every month to spend on treating yourself, be it a dinner out or a manicure but remember the end goal here is to save for your holiday, so don’t splurge too much if you can help it.
Set a budget and start saving early
If you know where you want to go, research how much it may cost and aim to save that amount, figuring out how much you’ll need to save each month or week until you reach your target. The earlier you save, the easier it’ll be and you won’t have to cut back so much on spending the closer it gets to booking/paying for your trip. Think little and often.
If you don’t have a particular holiday in mind just yet but plan to go somewhere, put aside a reasonable amount each month that will go into your holiday fund. That way, at least you’ve got some or all of your next trip paid for without having to fork out loads when the time comes.
Grow your savings
You’ve started saving early, great start. However, depending on how early you begin stashing your cash, why not think about putting it somewhere where you will earn a bit of interest. There are numerous saving accounts that give you interest on your balance, as long as you make monthly deposits. There are even specific holiday savings accounts for this exact purpose. It’s worth doing some research and using a price comparison site to help you decide what’s best for you. Take into account when you plan to go on holiday and how much you can set aside each month.
Believe it or not, you can save money when you spend. Some supermarkets and high street stores offer loyalty cards where you get rewarded with points that can be exchanged for goods or get discounts on items when you shop with them. It makes sense to get a loyalty card for everyday expenses like your groceries, as you’re likely to use it more frequently and therefore earn more points.
Airline companies also have reward programmes where you earn points every time you book and fly with them. Accumulate enough points and it could be enough to earn yourself a free flight (depending on the destination and price) or at least some money off.
Sell what you don’t need
It’s never too early (or late) to do a spring clean. Go through all your cupboards, wardrobes, your loft and garage for things that you no longer need and are still in good condition. A good way to know whether an item is worth keeping or reselling is asking yourself ‘when was the last time you used it or wore it?’ If the answer is over a year ago then sell away, either on reseller sites like eBay, through car boot sale or by spreading the word on Facebook. Whatever money you raise can be put towards your holiday fund.
Credit card – ONLY if you can afford it
Like mentioned before paying on credit card is only a good idea if you able to pay off the balance in full. If you think you can and already have money saved up then paying for your holiday by credit card means in most cases you’ll be protected under the Consumer Credit Act if anything goes wrong with the airline you booked with. Beware though that some travel companies may charge a small fee for paying on credit.
Now you’ve got a bunch of ideas on how to save up for your next holiday, we recommend putting these into practice as soon as you can. Got any useful and quirky tips on how you and your family save up for a vacation? Share them with us in the comments or tweet us.