Saving & Budgeting

How to Save for a Holiday

Set up an envelope and start saving money for your next holiday – straight from your mobile phone.

Couple being able to enjoy their holiday on the beach after saving money for it

Whether you’re into discovering new cultures or switching off altogether, vacations can be hugely rewarding providing that they’re affordable. Whether it’s a winter staycation or a summer trip overseas, planning and budgeting ahead of time are key when you’re looking to save for a holiday. This blog will provide you with some practical tips on how you can enjoy your holiday without worrying about getting into debt or overspending.

Cost Up Your Trip

Start by listing all the estimated costs associated with your ideal holiday, including transport, accommodation, food and drink, activities, and clothing. You may need to carry out some research into the typical cost of a flight (especially as the prices can fluctuate so rapidly).

It’s also worth comparing the cost of living in the country you’re wanting to visit so you can estimate what you’re going to spend each day. When it comes to your accommodation, remember to consider any potential refundable deposits you may need to pay on arrival. Additionally, it’s worth checking whether everything is included in the total price, or there are supplementary items like breakfast and WIFI that you may be required to pay for.

💡 Top Tip: To avoid paying more when you’re away, it’s always best to avoid visiting shops in the tourist hotspots

Set a Savings Goal

With a rough total in mind, now you can create a clear savings goal that sets out how much you need to save by when. One of the best ways you can start saving is by using something called SMART objectives.

This means ensuring your goals are Specific, Measurable, Attainable, Relevant, and Timebound. In terms of saving for a holiday, this is could look something like this:

S = Specific – What are you saving for?
M = Measurable – How much do you want to save for your trip?
A = Attainable – Is the amount you want to save actually achievable?
R = Relevant – Is saving for a holiday important and worth it? Or are there other goals that should come first?
T = Timebound – When are you aiming to meet the savings goal?

Assess Your Current Outgoings

Assessing your current budget and spending habits could help with spotting opportunities to save. That might mean cutting back on food, for example, cancelling unused subscriptions, or switching energy or insurance providers.

For more information on cutting back on your outgoings, check out our guide on the 9 essential rules of personal finance you should follow.

Save Money Early & Automatically

Putting savings away early in the month, or whenever you usually get paid, will reduce the temptation to overspend.

Weigh up Spending Decisions

Keeping a savings goal in mind can help you practice more mindful spending and resist impulse buys. Consider whether certain purchases are necessary and how they might impact your holiday plans.

If you find that you’re dipping in your savings, using your credit card or overdraft to make those purchases which you could probably do without, then a prepaid card might be an option for you to aid you in hitting your savings goals.

The beauty of a prepaid card is that they only allow you to spend as much money that you load onto the card. Therefore, there’s no risk of overspending or dipping into an overdraft and will need to be more considerate of your spending.  

Boost Your Income

If spending less isn’t possible, the only alternative is to earn more income. There are plenty of options to choose from when you’re looking to build a side hustle or advance your career and depending on your situation, that could involve steps like earning a promotion, taking on extra shifts, setting up a side business, or borrowing money from a travel buddy.

However, if you decide to borrow money to fund your trip from a loan provider, please review the terms and conditions and know exactly where you’ll stand when making the repayments to avoid getting trapped in the cycle of debt.

Save Money on Your Holiday Booking

The cheaper your holiday is, the less money you need to save! So, how to keep the costs down? These tips will get you off to a good start:

Booking Overnight Flights

A lot of airline providers tend to slash prices at inconvenient times so, if you’re happy to sleep on the plane, this could be the option for you.

Clearing Your Computer Cookies

This is one trick that can save you hundreds of pounds. If you’ve ever planned to book a flight, only to return to the page a bit later only to realise the prices have increased? Well, you can thank your browser cookies for that.

The more searches (“demand”) on the flight route – the higher the prices tend to be. So, by clearing your cookies you eliminate all the previous searches, and you should only be offered the best rate to entice you into making a purchase there and then.

Choosing Alternative Accommodation

Instead of the mainstream hotels in the tourist hotspots, check apps like Airbnb for cheaper and unique places to stay. If you’re planning to head away soon, you can always contact the host and try and haggle on the price to save a little extra cash.

Be Flexible with Your Travel Dates

Travelling off-season is always cheaper – avoid the school holidays and bank holidays. The cheapest time to fly is on a national holiday such as New Year’s Eve or Christmas Day but selecting travel dates within a seven day period is usually a good way to get the cheapest plane tickets and accommodation.

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