If not planned carefully, holidays can turn out to be a financial disaster in the making: it takes just a few unexpected expenses for your wallet to start screaming in agony, stressing you out when you are supposed to be enjoying yourself. That is why saving up enough money for the trip beforehand and avoiding common pitfalls in the vacation planning process is so important – holidays are a time to relax, rejoice and be at ease, not a time to be watching every cent and counting every penny. For minimal vacation planning hassle and unpleasant financial surprises, check out the holiday saving tips listed below and make most of your holiday getaway even before the trip begins.
To Cash or to Credit Card, the Question is now
As a rule, paying for goods and services in cash is a better option than using credit cards. Still, if you cannot save up enough for the holiday in banknotes, covering certain expenses by plastic is a good alternative, for as long as you make the payment in full and do not overstep the available budget (bank debts with high interests are a force to be reckoned with). Transactions made using credit cards are protected under the Consumer Credit Protection Act and can be reimbursed in case a travel agency fails to provide the promised service for bankruptcy or other objective reasons not due to the client’s fault.
Read the Small Print
When using credit cards to cover your holiday expenses, make sure you have read and understood the travel agency’s terms and conditions of service. Certain agencies charge fees for holiday arrangement payments made by credit cards, so it is always better to stay on the safe side. Also, if you are travelling abroad, check and double-check the official exchange rates, and use Travel Pay if possible to avoid extra costs with postponed installment payments due to long-term exchange rate fluctuations.
Be Ready to Commit
Saving the money for a holiday calls for long-term commitment: people who treat their savings as a regular expense and are disciplined with their spending are more likely to reach the target sum than those who set money aside occasionally. When you decide on your holiday destination and establish the total costs of the trip, set the budget for the purpose, and allocate a specific amount every week or month until you reach the target. Try to be reasonable with individual savings allotments, though: setting a half of your wages as a monthly savings goal may not be sustainable or manageable in the long run. To avoid financial havoc, start saving well in advance instead of setting aside more money for the trip than you can realistically afford in the course of two or three months.
Set up a Holiday Account
Saving in paper is not an ideal option for all people – for some, an instant access savings account will prove more efficient than stashing the trip fund in a designated coin jar or envelope. To make sure you follow through each monthly allocation, set up a direct debit or standing order payment that will regularly transfer a portion of your income to the savings account. That way, your holiday funds will grow safely but will remain easily accessible in case you decide to take the trip earlier than you originally planned. Also, cross-compare available options to get the highest interest rates for your savings – the best deal is always the one that has your money working for you with minimal monthly sacrifices or consequent financial hassle involved.
Are you ready to start building your holiday budget? Follow these four simple tips, and your vacation funds will grow fast and to a prompt trip’s advantage.