Saving up for a holiday and paying for it with cash is usually the best option for your finances. When you don’t have to borrow money, you will come home relaxed, not restless with money worries. Here you can find our step by step guide on how you could save up for your next holiday, as we look at budgeting for holiday expenses.
Saving isn’t always easy, but it is always something you should try to aim for. A lack of spare money is a common obstacle to saving. There are some things you can do though that will help you find some extra money that you can put towards your savings:
It is really important to figure out how much you want to save and how much you can afford to put aside each month. Here is how to do it. First, make a list of all the items you will need to take care of before you go. You can use our Budget planner to help you work out these costs:
Second, think about the day to day expenses on holiday like:
Add all these costs together and you have your savings goal. You might be able to get holiday costs down a bit too, meaning you will have to save a little less money. When you have done all this you can work out the best way to reach your goal with our savings calculator.
Treat saving the same as paying a bill, and commit to saving a regular sum each month or week. This way it will be much easier for you to budget savings and spending. But be realistic – it is better to commit to a small, manageable sum than to try too hard and give up. If your income varies from month to month or even week to week, put aside an amount you know you can stick to, however small it might feel. You can always add to it later. The trick is to not touch the money you have set aside.
It is time to start thinking about where to keep your savings. Bank accounts make it easier and more secure to save your money. You might start with a coin jar – putting £10 away a week gets you £520 in a year. But, make sure you transfer your money to a savings account when it builds up to a tidy sum. This way, you can earn a bit of interest on top. If you don’t have one, here is how to open a bank account.
Your bank will let you set up a separate pot for your holiday goal online. Set this up if you can as it will help you keep a target in view and track your progress. If you want to keep saving without a bank account, you can save cash at home, entrust money to a friend or family member, buy saving “stamps” find a local credit union, or use a rotating saving and loan scheme.
Check your savings regularly to see how you are doing. Set yourself small targets along the way and treat yourself as you hit each milestone. When you reach your goal for this year’s holiday, set a new, higher target for next year – maybe you could go on more holidays or visit more remote destinations.
Almost three out of every 4 people experience at least one unforeseen expense a year. It is for things like car breakdowns, the oven packing up or even a parking fine. The average unexpected cost for repairing a car, for example, is a whopping £1341, so it could put a real dent in your savings goal.
The best way to not get caught out is to always put away a little something to cover these costs, even if your main saving goal is for a holiday. Here is how to make sure you have covered if something expensive unexpectedly happens: