Whether you’ve set your sights on the overseas trip of a lifetime or a getaway to one of Australia’s many beautiful destinations, holidays require research and planning – and a reasonable budget to cover everything from flights to accommodation and everything in between.
While you’re bound to have a great time wherever you go, you can also rack up a sizeable debt if you rely too heavily on your credit card. Ideally, you should save as much as you can before the trip to minimise any debt and to enjoy a guilt-free holiday. This should be a breeze with a bit of pre-holiday planning.
Make a holiday expenses checklist
Sure, while on holidays there are often unexpected expenses but most of your money will be spent on fixed costs and you should have a clear picture of what these are likely to be – depending on where you are going, of course. Before you start saving, draw up a list of all likely expenses to give yourself a savings goal and ensure you save enough.
Your checklist could include a selection of the following:
- Airfares, train fares, cruise or other transport costs
- Travel insurance
- Travel visas
- Car hire at your destination, or local bus and train fare
- Entertainment costs (eg museum entries, Broadway shows, sights and activities)
“Saving for a holiday, like any financial goal, requires discipline,” says Greg Pride, financial adviser with Centric Wealth. He recommends working out a yearly budget at the start of each year and including any holidays you plan to take, then putting aside a minimum amount each month in savings to cover holidays as well as other expected expenses throughout the year.
A high-interest savings account can help you save for your holiday faster and achieve your goal sooner. You can make regular weekly, fortnightly or monthly deposits and top up your savings with any extra cash you have at the end of the month, or bonus income such as tax returns.
You can compare and apply high-interest savings accounts on RateCity, so do your homework to find the most competitive deal. At the moment, you can get 4.5 percent on a high interest saver. As these rates are generally introductory offers, typically around four months, savers will need to keep an eye on the term and the market to achieve the best outcome.
Be money smart
If you are flexible about when you travel, you can save thousands of dollars on airfare, accommodation and even meals. Avoid the money-guzzling impact of peak season by travelling during the shoulder or low seasons. Changing your travel dates by one or two weeks can sometimes make a huge difference on cost. But most importantly, be safe and have fun.