How to save for a holiday
It feels like holidays are more expensive than ever - even a relatively modest staycation can cost thousands of pounds. If you’re planning on getting away next year, it pays to start saving as soon as you can. Here’s our advice on how to get the most from your money.
It feels like holidays are more expensive than ever - even a relatively modest staycation can cost thousands of pounds. If you’re planning on getting away next year, it pays to start saving as soon as you can. Here’s our advice on how to get the most from your money.
How to save for a holiday
Saving up for a holiday – or anything else, for that matter – isn’t easy, especially when money is tight. But there’s a few tricks you can use to help make your cash go further.
- Use a coin jar
One easy (and retro) way to save is to put aside, say, all your £2 coins. Over the course of a year, this can add up to quite a lot of money. - Set up a Direct Debit
By setting up a Direct Debit to a savings account, you’re making a commitment to saving that you’re way more likely to stick to. Another benefit is that you’ll soon forget about it. This means you can build up a stash of cash without noticing it disappear from your current account. - Set yourself savings goals
Sit down and set yourself a target. How much can you realistically save each month? Be ambitious, but not so pie-in-the-sky that you can’t stick to your goals.
How to save money when you don’t have any
It’s easy to put money aside when you’ve got lots of it. But what if you’re only just scraping by each month? The good news is there are often ways you can cut back on your spending without feeling the pinch. Here are some ways to find extra money, which you can then put towards your holiday:
- Be more energy efficient
According to the Energy Saving Trust, you could save £55 a year just by turning down your thermostat one degree. Installing a smart thermostat, meanwhile, could save you £70 a year. It will help your carbon footprint too. - Consolidate your debts
Consider a debt consolidation loan, which lets you combine multiple debt payments into one. You could potentially reduce the interest you pay, particularly if you’re paying higher interest rates on lots of small debts. But remember to check out any fees and charges you might have to pay to set up the loan. - Never impulse buy
If there’s something you want, don’t buy it immediately. Give yourself 24 hours and see if you’re still thinking about it. Chances are, you won’t be. - Create a household budget
It pays to sit down with a spreadsheet and review all your outgoings. That way you can see where there’s room to cut back. Are you eating out a lot or ordering too many takeaways? Do you really need that morning latte? Whether it’s that gym membership you don’t use or the sandwiches you buy at lunchtime, there are usually ways you can cut back your spending.
Get more tips on saving money on your spending.
What you need to save for
The cost of a holiday can quickly add up. Obviously, the main expenses will be your flights and accommodation, but you’ll also need to cover the cost of:
- Travel insurance
You can get a better deal on travel insurance by shopping around. - Food and drink
If you’re staying in a hotel that isn’t all-inclusive, you’ll find that the cost of all those meals out quickly adds up. One way to keep your spending down is to alternate restaurants with take-outs from the supermarket or bakery. - Car hire/transport
Car hire can be pricey, so is worth factoring in when you’re planning your trip. Can you save money by going to a city or resort where you won’t need a car? What about travel to and from the airport? Can you book flight times that allow you to take public transport, rather than a cab?
Pricing up your holiday
The bonus of all-inclusive holidays is that you won’t need to spend much while you’re out there. The upfront cost might be higher, but you’ll know where you stand. Holidays that initially seem cheap can end up costing a lot more once you’ve factored in airport transfers, car hire, restaurants and so on.
Budgeting for your holiday
Work out roughly how much you’re going to spend on your holiday, then divide it by the amount of time you have before you set off. So, let’s say you want to spend £600 on your holiday this time next year, that gives you 12 months to save. Which means you’re going to have to put aside £50 a month between now and then. Seems more doable, right?
Where to keep your savings
Right now, interest rates are still extremely low, making it hard to find a savings account that pays big dividends. That’s why, if you’re looking for a decent savings account, it pays to shop around.
Frequently asked questions
How long does it take savings to grow?
How long it takes your savings to grow will depend on how much you put aside each month - and where you put it. But, thanks to compound interest – where you earn interest on your initial sum, plus the interest on that – you could accumulate a lot more than you think.
How to save money on your holiday
The cheaper your holiday, the less you’ll have to save. Here are some easy ways to lower the cost of your trip:
- Avoid travelling during school holidays
If you can travel in June or September, you’ll get a far better deal. And the resort might not be so crowded either. - Shop around for last-minute deals
Sometimes it pays to hold your nerve and wait until the last minute before booking your trip. You’ll have less choice, but chances are travel firms will be looking to offload any holidays they still have available. - Use hand luggage only
If you can, avoid paying extra to check luggage. It will mean you get out of the airport faster too. - Pay using the local currency
If you’re using your debit or credit card abroad and you’re asked which currency you’d like to pay in, always choose the local currency. Otherwise you’ll be charged extra exchange fees.
