Planning and budgeting for holidays

Whether it’s a seaside break or the trip of a lifetime, paying for your holiday will be easier if you plan ahead.

Steps to help you start saving for a holiday

Step 1 – Set your holiday budget

First, add up your essential spending for items such as flights, accommodation, car hire, travel insurance, travel money, holiday clothes, sun cream and toiletries.

Secondly, list day-to-day holiday expenses for excursions, holiday treats, entertainment and food and drink.

The total is the amount you need to save or pay off to cover your holiday.

Step 2 – Start saving

Treat saving the same as paying a bill, and commit to saving a regular sum each week or month.

But be realistic - it’s better to commit to a small, manageable total than to try too hard and give up.

Alternatively, you can make frequent direct debit payments to pay off your holiday balance.

Step 3 – Stash your savings

Start thinking where to keep your savings. You could start with a coin jar. Then if you transfer your cash to a savings account as it builds up you’ll earn interest on top. You may be able to set up a separate savings account to use for your holiday fund.

You can also look for bank account features such as Save the Change which rounds up every amount you spend to the nearest pound, putting this amount into a separate savings account.

Step 4 – Watch your savings grow

Check your savings regularly to see how you’re doing.

Should you save your cash or pay by credit card?

Saving for a holiday is usually the best option. But if you can’t save the full amount, paying with a credit card might be a good idea.

Credit card bookings are protected under the Consumer Credit Act. So you might be able to make a claim if the airline or holiday company goes bust or if the holiday isn’t as described. Bookings covered by ATOL may have similar protection, so it’s worth a check.

Paying by credit card is only a good idea if you can pay off your bill quickly and in full before you take your trip or soon after you get back. Otherwise, you could be paying hundreds of pounds extra in interest.

View our available credit cards and find the right one for you.

We can help with all of the travel essentials, from ordering foreign currency to using your cards abroad. Going abroad is less hassle when you make the right preparations, visit our travel services pages for more information.


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