There is no one way that’s going to help you suddenly have more cash to spend on holidays, but a combination of a few simple steps can help save for a holiday. You may even save more than expected. If you love sun, sea and sand – it’s worth setting some time aside to help you enjoy a getaway guilt-free by following our 5 top money-saving tips.
1. Set a Holiday Budget
It’s difficult to save for a holiday when you don’t have a goal in mind. By setting a budget, you’ll be able to determine how much you can afford to set aside each month. To set a budget you’ll need to roughly calculate your predicted expenditure. You can do this by adding together costs you need to consider before you go and the day to day expenses of being on holiday.
Costs to take into account before you go, such as:
- Travel insurance
- Travel money
- Transport – to and from the airport
- Holiday wardrobe
- Covid-19 essential – facemasks, antibacterial gel, COVID-19 Fit to Travel certificate
Day-to-day expenses on holiday, such as;
- Day time activities
- Food and drink
- Car hire & insurance and/or transportation
- Evening entertainment
Once you’ve added these costs together – you’ll have a holiday goal to save toward.
2. Try the 50/30/20 Saving Method
Now you have your holiday fund goal, it’s time to start saving. From the beginning of next month, keep track of your non-essential spend. Essential spend would include your bills, rent or mortgage payments. Non-essential spend may include a takeaway coffee in the mornings or a new pair of shoes you purchased in the sale but didn’t really need.
Then you can adopt the 50/20/30 method of saving. The 50/30/20 rule was first popularised by Senator Elizabeth Warren in her book, All Your Worth: The Ultimate Lifetime Money Plan. In simple terms, this method means that you divide your income with 50% of your take-home to go toward essentials; 30% toward non-essentials; and 20% toward savings.
Then, depending on your holiday fund goal, you can transfer some of the 20% savings across to your holiday account.
3. Have a Separate Holiday Bank Account
Having a separate bank account just for your holiday savings can be an easy way to save for a holiday.
Money-saving expert Mr Phelps, – who wrote Getting Your Money $hit Together, said:
I recommend keeping your bills, future and holiday accounts with one bank, and your everyday and fun accounts with an entirely different institution. With this system you do not need to have any guilt if you spend every last cent in your everyday and fun accounts because you know you are not going to miss a direct debit that are linked to your other accounts.
4. When to Book your Flight
It’s important to consider where and when you want to travel. Some locations can be very cheap. For example, a flight to Amsterdam (from London, departing 30/10/2020) can be as little as £26.00 one way, whereas a flight to Dubai (from London, departing 30/10/2020) can be expensive, with the fastest flight one way at around £440. To determine a location that fits with your budget – you can use a comparison flight such as Skycanner. By selecting ‘everywhere’ in the destination option, you’ll be able to compare flight prices for various locations for your chosen date. But check the airline’s website to find out if the flight is even less expensive if bought directly from them.
When you book can also make a difference, Sky Scanner suggests that you can make a saving by booking a flight earlier on in the week as the highest prices are offered later in the week. According to their data trends – they found that you can pick up the best prices on a Tuesday morning – where you’ll be able to typically save somewhere between 15 and 25 per cent.
5. Protect you and your holiday with travel insurance
Where and when you want to go on holiday can, of course, be affected by COVID-19. The best way to protect your holiday is by purchasing comprehensive travel insurance. You will need to make sure that any policy you take out includes enhanced COVID-19 cover. This will protect you against any unexpected medical emergencies or cancellations, even those related to COVID-19. Meaning, that should the worse happen, you won’t be left out of pocket.
To ensure you are adequately covered you will also need to declare any pre-existing medical conditions that you may have. Having specialist travel insurance means you can get 24/7 access to emergency medical assistance, wherever you are in the world, and without the worry of high medical bills.
Now you’ve got a plan in place, and a holiday in mind to look forward to – you can relax and enjoy saving and spending guilt-free right up to the moment you take off!
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