How to Save Money for a Holiday

Summer 2017 is almost upon us and for many this means a summer of barbeques, cold drinks and a relaxing holiday abroad. However, for those that have not managed to save ahead it will be a very British summer instead. It doesn’t have to be this way! At Debt Advisory Services, we know how difficult it can seem to save for something as expensive as a holiday.

So, how can you effectively and proactively save for your summer 2018 holiday now?

Don’t Use Credit

Saving up for a holiday and paying with cash is always the best option when considering your finances and avoiding debt. Paying via credit is only a good idea if you are able to pay off the debt quickly and in full, as if you do not you could end up paying much more for your holiday as a result of interest rates.  Some travel companies also charge you extras for using a credit card to pay for your holiday. Being aware of this could save you money in the long term.

However, you could choose to save up for your holiday in cash and then pay by credit in order to protect it under the Consumer Credit Act. Doing so means you may be able to make a claim if the holiday company or airline goes bust and makes your holiday impossible. But, you should check prior to booking as ATOL protection may already be a part of the holiday you are paying for.

Set a Budget

Saving for your holiday should always begin with the initial step of setting a budget. Understanding how much you need to save – whether you’re going to Greece or Glasgow – can help you understand how much you need to save each month and for how long. It’s not an exact art, as unexpected expenses will always occur and cause an upset to your cash flow. However, having a minimum saving amount and an optimal amount should help.

For example, if in an ideal world, you put £200 in savings each month for twelve months you will have £2,400 saved. Enough to pay for a holiday for two in a number of locations and all of the additional spends you may need on this holiday. However, if you find that money is tight due to unforeseen circumstances then a minimum of £50 savings may be required. After the same twelve months, you will have £600, enough for a relaxing city break at the least!

Realistically, you will see a combination of the above two scenarios. Some months you may be able to save fully, while other months you may have to cut back due to other commitments. As such, looking at a number of holiday options to suit your potential savings is the best option.

Set a Time Period

A good time period, especially for a longer holiday abroad, is a year of savings. But, this is not always realistic as you do need to book ahead in most cases. Choosing a holiday which can be paid in instalments – a deposit and then two further instalments – could be the way to manoeuvre this. It also means you will not be tempted to spend your savings, as you will pay off the holiday regularly as your savings accumulate.

Having a set time gives you a goal and makes saving that much easier.

Keep Extra Savings

If you find yourself with a better cash flow than expected, then it doesn’t necessarily mean you should treat yourself immediately. Think ahead and put the money towards your holiday. As the more you save initially, the less stressed you will be by the time it comes to paying your holiday!

If you would like to find out more information about how we can help you, please don’t hesitate to get in touch with us today – we’ll be glad to help you in any way possible.

 

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