Many of us have resigned to the fact we’ll not be flying off somewhere exotic this year for a holiday, but the possibility of a staycation in most countries is very much on the cards. We are all hoping that the COVID 19 pandemic stays at bay, infection rates can get (and stay) under control and holidays, in some form at least, can be enjoyed again. Time with family and friends away from lockdown homes is so important for mental health and preserving connections with loved ones.
The most promising contenders this year are the weekend getaway, a camping trip or maybe even a trip to the coast weather permitting. With this in mind, it’s a good idea to start saving up for your vacation now, whatever form it takes. Here are some cherry picked, expert tips to help you financially plan for the holiday you and your family deserve this year:
#1 – Start Budgeting immediately
Figure out how much your dream trip will cost, including as many small details as you can imagine to incorporate and then figure out how much money you need to save each month to afford it if you’re booking a date that’s 6 months away (or however long you choose). If you set up a savings account especially for this money as a ‘holiday fund’, you are less likely to eat into it when something else pops up. Create a direct debit so the money transfers over on the day you are paid. Research has shown that you are significantly more likely to save money if you put the money into a savings account on the very day it gets paid to you.
If you’re worried about having a weak resolve and dipping back into your savings account then it might be best to look at a savings account where a ‘notice period’ is required before you can withdraw funds. Some accounts require notice periods ranging from one to three months, which will ensure that any withdrawal from the account is for a very valid reason rather than the ‘flight of fancy’ that can be so damaging to our savings efforts (and that so many of us like to indulge). We recommend checking out this information from Which to learn more about the different types of saving account available on the market today.
#2 – Make sacrifices
You may need to make sacrifices to afford the holiday you need. As long as these are reasonable to obtain, you should attempt to make them right away. Perhaps you want to ditch the takeaway you usually get, or the coffee you always buy on your way into work. If you’re doing step one in this guide correctly it should be quite straightforward to identify some of these ‘easy sacrifice opportunities’ to start whittling away at.
Consider how much you spend on bills and utilities (particularly your entertainment budget) and figure out if there is a cheaper alternative or a more clever way of accessing what you need. For example – do you really need to subscribe to Netflix, Disney Plus and also keep your sky TV package? Can you split the subscriptions between a few friends and share access with each other? Can you switch your multiple Spotify accounts into a cheaper family account? Can you get all your phone contracts for the family on a bundle deal with your tv and internet provider? Often bundle deals like this are one of the best ways to consolidate your spending.
One other idea we recommend exploring is the ‘downshift’ challenge, discussed here by The Sun. This involves swapping branded goods for cheaper items, and could save you a real chunk of money each month. It is quite an easy one to achieve and maybe you’ll even find you prefer a cheaper item and swap it out for good!
These small changes seem like just that – small – but over time they can really add up, the trick is trying to pick the sacrifices that end up not really feeling like much of a sacrifice at all.
#3 – Save on energy now…
…to help you achieve cheaper bills in a few months’ time. This one is discussed in more detail on Wonga’s money saving blog post here, they talk about remembering to turn lights off to save on electricity costs, as well as swapping light bulbs for more energy efficient LED alternatives.
The logic is making these small lifestyle changes can end up saving considerable amounts in the long run. While you turning off a light here and there may not seem a lot now, your utility bill will take your readings and may then advise a cheaper monthly payment on your utilities. If you are on a meter, then the results you see will be instant. Remember you’re also saving the planet at the same time as saving money, a no brainer.
#4 – Club together with a friend
If your savings goal seems unattainable, why not club together with a friend for the holiday you want. You can even set up a piggy bank that you both pay into. Not only can you achieve your savings goal more quickly, but the motivation you get from joining a friend with one common end goal can really spur you on.
You can also half the cost when you are on the holiday itself – accommodation can be cheaper if you choose to rent out a house with enough rooms for a larger group of you. One word of warning on this action – make sure you trust the person that you’re clubbing together with! Ensure all payments into the account are matched equally on both sides and ensure that no single person can make withdrawals from the account without both parties being present. While this may seem excessive you can never be too careful when it comes to your savings – money has destroyed plenty of friendships in the past.
#5 – Source low interest loans or zero % credit cards
We’re only including this section as we’re realistic to the fact that some people use these options to obtain the credit for a holiday. Accumulating debt is never something we want to encourage, but if you’re going to do it then ensure you’re getting the best deal in terms of loans and interest rates on the market right now. You should only ever consider a loan if you can pay it off in full each month, and you should of course consider the overall cost of the loan including interest before you make any decisions.
You should also only get a loan from a reputable provider and never be tempted into any seemingly ‘less formal’ credit arrangements through friends or ‘friends of friends’ that can reach out to you over social media, as this could be very stressful and potentially dangerous for you when repaying further down the line. Applying for a loan is an option that may apply to some limited few to help you take advantage of a really good, but time limited offer.
Tread with caution here friends and happy travels!