Planning your finances for your holidays
If you are planning a holiday, either as an individual or for your whole family, it is important to make preparations so that you can enjoy and make the most of your time away from home. By approaching your holiday savings in a structured and organised manner, you can ensure you have enough money to fully enjoy your trip, without having to get yourself into debt to do so.
Planning ahead
It is easy to think that once the travel and accommodation is paid for, that the lion’s share of the expenditure is under control. Unfortunately in the majority of cases, this is not so. Spending money often equates to or even outweighs the cost of the holiday itself, so make sure to budget a good amount for things you will need whilst away. Remember, even if you are on an all inclusive package, chances are you will want to take a day trip out or have a meal in the town at some point. Also you will need toiletries, drinks and food whilst out and about and no doubt will want to get some souvenirs of your trip. Start planning your savings at least 6 months ahead, and aim to tuck away a good 5% of your income each month towards the cost of taking your vacation.
Don’t borrow
Whilst it can seem an easy solution to just borrow any money you need on a credit card or via a personal loan and then pay it off when you get back, chances are you will not pay it off and will be left with an unmanageable debt for many months or even years after your holiday. The longer you are repaying your loan, the higher the amount of interest there is to be paid, whereas if you are saving money towards your holiday in a good savings account, you could actually grow your spending money by a good proportion by the time you come to take your trip.
Budget your spending
Consider how long you will be away for and devise a budget to cover that period. If you are going self catering or half board, set aside a proportion of your budget for food and drink, then divide that up by the number of days you are going away for. Chances are you will be able to save some money on this budget here and there, meaning you can afford some meals out or cocktails in the bar on a couple of occasions. Similarly you need to dedicate a proportion of your budget to activities and then stick to it. You may love to go scuba diving every day of your vacation, but this is an expensive hobby and one which maybe you can only afford to indulge two or three times during the week. Figure out how much you have to spend, and then list the things you really want to do whilst away, and see what you are left with. In the worst case scenario, you may have to spend two or three days reading by the hotel pool or relaxing on the nearby beach, which probably isn’t so bad after all.
Shop around for a deal
When you are booking your holiday, spend some time researching the cheapest times and locations to visit. If you don’t plan to take children with you, then go out of school holiday season to make the most of the off peak prices. If you can, go for a late deal to make great savings on the list price, or arrange a holiday yourself, finding the cheapest flights and hotels on the market for less than the tour operator’s prices.
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