Have you been thinking about taking your dream holiday?
The quickest thing to kill your holiday dreams is a lack of funds.
Here are my tips to help save for that dream holiday.
Decide where you want to go
If you are like me your probably have a few dream holiday scenarios in mind. Now is the time to pick one to put into motion.
Destination costs vary widely. A trip to Bali for two weeks will be cheaper than two weeks in New York for example. Your destination will influence how much money you will need and more to the point how much money you need to save.
Other factors such as whether you want to travel in luxury or prefer a more down to earth experience will all come into play.
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Work out how much time you have
As we all know time and money often go hand in hand and travelling is no exception.
Work out how much time you have and then you can plan your destination and savings accordingly.
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I’m sure I don’t need to tell you that the Internet is the perfect place for shopping around for good prices for your dream holiday. Don’t just buy the first thing you see (unless it happens to be a fantastic bargain!)
Head to travel shows for great flight deals. If you are part of a frequent flyer program make the most of it. Don’t blindly leave all of your travel plans in the hands of a travel agent. Make sure you compare pricing to see what is available.
Use the Internet for inspiration and motivation. Follow travel blogs and Instagram pages featuring your chosen destination to keep you on track.
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Let me explain this one. Your dream holiday might be to go to New York and stay at The Plaza Hotel for two weeks. Excellent!
The problem is two weeks at The Plaza Hotel may be out of your reach financially. This is what I mean by compromise. Don’t give up your big dream because you can’t afford a particular element of it. My suggestion stay at another hotel you can afford and then spend two nights at The Plaza or your super fancy hotel of choice.
You still get your big dream, you have a fantastic time and with the money you save on accommodation you can spend on fabulous restaurants, shows and shopping.
Make up a realistic holiday budget
Flights and accommodation can be a big expense. Factor in food, dining out, transportation, sight-seeing, shopping and tipping if necessary.
Make your budget as realistic as possible. Make sure it covers visas and passports if you need them. Factor in travel insurance if you are going oversea.
Allow for incidentals. I always need to do some last-minute shopping prior to my trip so I factor that into my budget.
Once you have worked out just how much money you need to save out of each pay to make your dream trip happen, organize a direct debit to transfer the money into a separate travel account. Make sure this money can’t be accessed via your everyday account.
We all swear we won’t dip into our everyday savings and we all do it. Make it easier to save by taking away the temptation.
Writing a budget is the easy part, sticking to the budget over the long haul is much tougher.
If you are saving over a particularly long period of time (say a year or two for instance) make sure you factor in little treats to help you stay on track with your savings goal.
Make sure you have a normal budget
Do you know how much it costs you to live each week/month? Do you know how much the bills generally cost and how much you have left over?
A holiday budget won’t be much good if you don’t know what it costs you (and your significant others) to live each week.
The two budgets need to compliment each other and work together. Work those spreadsheets!
Don’t get obsessed with exchange rates
Admittedly this can be hard to get your head around but try not to get obsessed with exchange rates.
Definitely do not let them put you off taking your trip. Exchange rates are part of travel. Sometimes you are ahead, sometimes you are behind.
Accept they exist. Live with them. Take that amazing trip!
Don’t have a credit card holiday
I have to confess in my recent trip to New York, I did use my credit card a lot more than normal. I came back from my trip owing money. To be honest it was quite a large chunk of cash.
After a couple of weeks back home I have nearly paid it off. The reason I can do that is because I had some money set aside in a holiday account.
I know a lot of people have credit card holidays. The important thing is you need to be able to pay the debt back as quickly as possible when you get home. If you take a year to pay it off, the interest will make for one expensive holiday. The joy of your trip will be long overshadowed by the stress of paying back the debt.
Not that I want to be negative but you also need to be realistic. What would happen if you lost your job when you got back from holidays? Could you still afford to pay the card off? You need to take into account some different scenarios when you are putting that much money on credit. It’s always better to have some savings put aside.
When I was in New York in 2013 I barely shopped because I didn’t have a regular income at the time. Use credit but make sure the payments are manageable on your return.
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This is the part you don’t want to hear.
Unless you are rolling in money and have little debt, more than likely to go on your dream holiday you are going to have to make some financial/lifestyle sacrifices.
You are going to have to temporarily give up a few things.
In this ‘I want it all and I want it now’ lifestyle naturally we want our dream holiday whilst we still have our fabulous lives at home. Unless you are a high income earner, without a lot of debt that may be difficult.
While I am on the subject of high income earners, making lots of money doesn’t necessarily mean you have lots of money. My years working with salespeople taught me that. One of my friends (who was a high income earner) asked me how I (the much lower paid sales secretary) could afford to go overseas every year or two. The answer was that I saved some of my small salary regularly and he lived way beyond his means often raking up massive credit card debt to maintain his everyday lifestyle.
Don’t think that you need to stay home and do nothing.
Think in terms of how much certain activities cost. Instead of a Friday night out with friends at a pricey bar and restaurant meet people for an inexpensive brunch on a lazy Sunday morning. You still get to catch up with friends at a fraction of the price (and without the hangover the next morning). Bonus!
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Stop buying crap you don’t need
This is important. As consumers we often don’t realize how much we shop out of habit.
Without realizing we end up buying a lot of stuff we don’t need.
If an appliance in your kitchen that you hardly ever use breaks, do not replace it. You weren’t using it anyway so why waste your money?
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Chase big and small savings
If you are saving for a holiday you won’t be able to run out and buy any big-ticket expensive items. You will probably need to cut down on medium priced items as well such as new clothes and shoes.
Don’t overlook the small amounts of money that can be saved every week. Small amounts add up over time. Take your own lunch to work, cut out buying magazines, buy less cups of coffee and cut down on buying wine or beer. These are just examples, it really depends what you spend your money on.
Cut down on your grocery bill by specifically taking a look at food wastage each week. Pay attention to how much food you throw out.
Take a look at your regular bills. Work out which ones are flexible and you can have an influence on (your power bill is the perfect place to start). Don’t stress about the ones you can’t control, make sure they are in your weekly budget and accounted for and focus on what you can save.
Get people involved
If you are planning a family holiday get the family involved. Get them involved in the planning, researching and excitement stage of the process. Make it as fun and interesting as possible to get them on board.
If you are travelling with your spouse, make sure you share the same saving ethic. Nothing will be more frustrating than you diligently saving while your partner is frivolously spending money.
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Decide how much you want your dream holiday
When it all comes down to it, it depends how much you want your dream holiday.
This is one of those situations where talk is cheap. Saying “I’ll go on that holiday one day” – just won’t get you there. Action, commitment and some temporary lifestyle changes (depending on your individual financial situation) are required to make your holiday happen.
I know some of these points might not sound very glamorous. Some sound like hard work but never forget your end game.
Believe me when you are on your dream holiday, having the time of your life, you will know deep down in your soul it was all worth it!
You can make it happen.
If you enjoyed this post, please share it with your friends via social media. It just might inspire one of them to start saving.