Taking the kids on a summer holiday is no small cost, but we’re here to help you save for a family holiday in 5 simple steps.
If you’re hankering for sandy beaches or Mediterranean heat, you’ll know that holidays don’t come cheap. Family holidays can be a great chance to escape the hustle and bustle of daily life and enjoy some quality time together, but they often come with a hefty price tag.
Research from travel site Expedia found that the average family holiday will set you back around £2,417, as prices soar during the school summer holidays. While taking some time away with your loved ones can feel priceless, it’s certainly not a cost many of us can stump up at a moments notice.
Cash or card?
The first thing you need to consider is how exactly you’ll fork out for it. According to a survey carried out by uSwitch, 57% of participants used a credit card to cover the cost of their summer holiday, spending an average of £473 each.
In an ideal world, it’s a good idea to steer clear of using plastic to fund the whole cost of your holiday. Many of us who do use credit wind up paying for the holiday months after landing back home, which means we’re still paying off credit during the costly festive period.
On the other hand, paying for your holiday with a credit card could be a savvy idea, as it’ll mean your holiday will be protected under the Consumer Credit Act. Simply speaking, Section 75 of the Act means that payments between £100 and £30,000 are covered by your credit company as well as the retailer, meaning you’ll get extra protection should anything go wrong.
So, it might be wise to use credit – but it’s good to make sure you’ve got the money in the bank (or at least a good chunk of it) to pay it off soon after you’ve booked it to avoid paying interest fees.
1. Make a saving goal
Having a specific figure to aim towards will give you the motivation to reach your goal. To get an idea of how much you’re happy to spend, it’s worth doing your homework – pop into your local travel agents and ask them to give you a quote for the type of holiday you’d like to book.
Or, if you’d rather book yours online, use flight and hotel comparison sites to get an idea of what you’ll need to pay. Prices will always go up and down, but it’s worth getting an idea of the cost before you start to save.
Once you’ve got that figure, you can decide how much you can put away on a regular basis. Using a savings calculator – like this one on Money Advice Service – can help you work out how long it’ll take you to reach your goal.
2. Out of sight, out of mind
Putting your savings into an account where you’ll struggle to touch them is a great way of saving up for a holiday. Setting up a savings account with a different bank could mean you’ll be less tempted to withdraw your savings and spend them.
Better still, if you open a cash ISA or a Regular Savings Account, you could earn extra money in interest to go towards your holiday fund. And with ISAs, you could pick one that has limited access which could save you from dipping into your holiday fund.
Check out the current high street options and see if they suit you over on Money Saving Expert.
3. Get technical
Whether you’re a tech-xpert or a technophobe, there’s no denying that the rise in financial apps has helped many of us put money away.
The ‘Chip’ app securely connects to your online banking and gathers information about your spending. It then uses that information to work out how much you can afford to save and transfers the money into a separate saving account for you – so you don’t even need to lift a finger!
There are plenty of saving apps to choose from, so if you’re planning to save up for a family holiday, why not get a little technical?
4. A little goes a long way
Little treats like a daily cappuccino or a pint at the local might seem like cheap one-offs, but over the course of a year, they stack up.
Research has shown that our coffee habit can cost us a whopping £600 a year, which could go a long way towards that summer holiday. And if you smoke 15 cigarettes a day, you could save a huge £2,000 a year by quitting – enough to get that holiday booked!
Something as simple as making your own instant coffee or cutting down on smoking could help you reach that holiday goal. So, next time you pass your local coffee shop, consider popping the money you would have spent towards your holiday and you could be jetting off before you know it.
5. Shop around
The key to finding the cheapest deal for your holiday? Compare, compare, compare.
Whether it’s haggling with a travel agent and seeing if a competitor can beat their quote or scouring the web, there’s nearly always a cheaper deal to be found. Even if you’ve searched flights to find the cheapest deal on one comparison site, who’s to say a different site haven’t got access to an even cheaper deal?
When you’ve got your holiday fund together, be sure to set time aside to research. Travel agents love to drive down the costs if it means you’ll book through them instead of a competitor – so get haggling and see if you can save yourself some money. More money for ice creams when you arrive!
Like this blog? Check out our favourite travel apps here.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.