I hate the cold (when you keep alpacas, you spend more time in the wind and rain than most).
If I had my way, I’d spend October to April in one of those padded snowsuits, with the furry hoods. Little kids look so warm in them, I wish they came in adult sizes!
So it’s usually about this time of year that I start looking at holidays online.
Anywhere sunny – I can easily spend hours browsing exotic destinations, dreaming of feeling the warmth on my skin again. So many places I want to visit!
And if you want to BOOK a holiday too – I’m guessing you’ve also thought about how you’ll pay for it?
There are a few options. So in today’s blog, we’ll run through all of the pros and cons, to find the best choice for you!
1. Savings.
My preferred option is to pay for my holidays from savings.
I build them up over the year, by transferring a % of my income to a holiday savings pot every month. It’s part of how I manage my money (more on money pots here, if you want to read more!).
Like paying for my car insurance and the school bus pass (£450 this year!) – I put money away each month for those annual expenses in a separate account, so I don’t need to worry about how I will afford it.
But if you’ve NOT got the money saved for a holiday, what can you do? Are there other good ways to pay?
2. 0% Credit card
If you have a credit card that is 0% on purchases for 6-12 months, it can be a sensible way to pay.
The added bonus of using a credit card is the consumer protection – so if Thomas Cook goes bust (!) or an airline fails, you’re not left out of pocket.
I usually put my holiday on a 0% card for this reason, and then pay it off in full straight away from my savings pot.
The key with this is to make sure you repay in FULL before promotional rate ends – so you don’t get clobbered with a whole load of interest.
A great way to do this is to work out when 0% ends. Set up a fixed direct debit, leaving your account on pay day (or the date you pay yourself each month), to clear the amount you owe in full a month BEFORE the date that interest kicks in.
3. Payment plan
Many travel agents and online booking sites will let you pay a deposit and the balance in instalments, with the final payment usually due 6 weeks before you go.
As long as it’s interest free, this can be a good option (and as long as the company doesn’t go bust before you depart!).
If you go down this route, it makes sense to put the deposit on a credit card and repay it straight away, from your savings – so that you benefit from consumer protection on the whole purchase.
If you don’t at least have the deposit in savings, there’s a question to be asked about whether a holiday really IS affordable right now. We all need a break sometimes – so if you still decide to prioritise going away, it’s being realistic about HOW you’ll put money away each month, to cover the cost.
Let’s say you want 2 weeks in the sun, plus a couple of short breaks over the year (for two people).
With travel; accommodation; extra charges for baggage; leaving your car at the airport etc (very easy to underestimate!) – let’s say it’s a total of £6,000.
That’s £500 you need to be allocating EVERY month, so that you have enough in savings or to pay off your 0% card.
This might mean making savings in other areas of your budget, that are less important to you.
Fewer takeaways; cancelling that gym membership you never use; talking lunch or coffee to work, instead of visiting Starbucks a few times a week.
While we all only have one pot of money, how you spend it is up to you. And mindfully, proactively prioritising and managing your money can really help to make that dream holiday a reality!
For more like this, do come and join our (free) private Facebook group – Peace Together Money Confidence.
It’s where positive-thinking women like us come together, to talk all things money in a supportive and non-judgemental space.
And we’re off to Agadir in February…can’t wait for the winter sun to recharge my batteries!
Until next time,
Claire