Budgeting for a holiday

Holidays can be a time to kick back and relax. Your accommodation and travel expenses have probably been organised, and all you need is some petty cash for small purchases – or so it may seem.

A survey by ATOL has found that the average family spends more than 17% of what it’s budgeted for its holiday in unexpected costs. It also discovered that 61% of holiday-goers struggle with budgeting. So while you’re enjoying time off away from home, you may end up spending more than you’d anticipated. This doesn’t just involve spending more on hotels, holiday home rentals, flights or train tickets than intended – you could also run the risk of spending too much on ‘little things’ that can add up to a hefty holiday bill. Unexpected holiday costs can include the following:

  • Food and drink
  • Charges for withdrawing cash
  • Charges for exchanging currency
  • Car hire or parking costs
  • Public transportation, airport transfer or shuttles
  • Excess baggage
  • Phone roaming and internet charges
  • Equipment hire

Planning your holiday budget

There are some steps that you can take to help plan how you spend money on your holiday. These could help you to stay within budget and minimise unnecessary costs.

Before you travel

  • In order to keep within your budget, you first need to set a limit on what you want to spend on holiday.
  • When booking accommodation or transportation like flights or train tickets, you’ll find that you may get better deals if you’re flexible with the day and time that you’re willing to travel. Travelling off-peak could save you money. Price comparison websites can also give you a range of choices based on different budgets.
  • Airlines usually have restrictions on the weight and size of baggage that you’re allowed on board, so make sure that yours fits within the limits. This will save you from having to pay excess charges when you get to the airport.
  • Check to see if where you’ll be staying charges for ‘extras’. Some hotels, for example, include Wi-Fi and breakfast with the overall room charge, so you won’t be caught out by extra charges when you get there.
  • If you’re going somewhere that uses a different currency, shop around for the best exchange rates to ensure that you’re getting a good deal. Bureaux de change tend to charge more at airports, for example, so you may want to purchase your currency elsewhere in advance, such as from the Post Office or your bank.

During your holiday

  • If you’re travelling abroad and require some local currency when you’re in that country, check to see if you can use your debit card in ATM machines – but remember to minimise the number of withdrawals that you make.
  • For some people, sampling the local cuisine is part of the enjoyment while on holiday. Some travel guides provide guidance on which eateries fall into which price ranges, helping you to budget. If food isn’t a priority for you, you may even want to consider bringing your own, such as on flights, or purchasing basic ingredients from the local market or supermarket, if your accommodation provides cooking facilities.
  • Tour companies can plan your itinerary andprovide transportation, to save you on the hassle. If you organise your trip on your own, though, you can save on the commission or fees that these companies charge.
  • Travel cards for public transportation or travel passes that let you visit tourist attractions at a discounted price can help you to save money while on holiday.
  • If you’re a student or over 65 you may get further discounts on normal rates (or you may not even have to pay at all). Just remember to bring proof of your age.
  • Depending on where you’re going, you may be able to get a refund on sales tax when buying things while on holiday. Check to see if this is the case at your destination.

After you get home

  • If you’ve used your credit card while aboard, remember to make your monthly repayments once you get home. Regular non-repayments could potentially end up affecting your credit rating.

There are many ways in which you can plan your holiday spending so that you don’t go overboard. Planning in advance and keeping an eye on your budget while you’re away can help you to ensure that you don’t return home from a relaxing break with a hole in your pocket or even debt. Knowing what you are prepared to spend and sticking to it may also help to reduce your worries when on holiday.

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