Holidays are meant to be a relaxing time, yet for many the idea of a holiday can be the source of anxiety and stress. The question many Brits face at this time of year is how they can organise a holiday without going over budget.
With debt and financial concerns affecting all aspects of a person’s daily life – indeed, recent research by KnowYourMoney.co.uk revealed that a significant 24% of Brits lose sleep over debt – it’s crucial to take control of your finances and not let these worries dampen your summer. For those organising a holiday in the coming months (and hoping to do so without going over budget) here are a few key pointers to bear in mind…
- Have a clear idea of your own finances
You’d be surprised to hear how many people lack a clear understanding of their finances. For instance, have you heard of the DTI ratio before? If your answer is no, you’re not alone – according to the aforementioned research, 39% of UK adults don’t know either! This is despite the debt-to-income ratio being a valuable tool in helping to determine how much debt you can reasonably manage based on your income and current outgoings.
If you’re planning a big holiday this summer, and are looking to borrow money in order to finance it, I would encourage you to find out what your own DTI ratio is (there are plenty of online calculators to help you do this) to make sure you accrue this debt responsibly and will be able to pay it off in the long-term.
If your holiday is a few months, or even weeks, away, then you can start planning your budget now to ensure you don’t overspend. First of all, start by determining how much you want to save and how much you can afford to put aside on a regular basis. You can do this by making a list of the items you’ll need to take care of before you go, such as booking flights and accommodation, sorting out travel insurance, and allocating travel money.
Having established a saving budget to work towards, you will now have a better understanding of how much money you should realistically be putting aside every week to help reach your goal. Planning this out will keep you accountable and help you stick to your target.
When planning for a holiday, comparison websites are the holy grail. They can help you find the best deals and offers for products like travel insurance, and can tailor the results to fit your own budget and needs.
This doesn’t mean that you shouldn’t conduct your own research into the products and services you’re after, but it is a useful place to start your search and can help you make better financial decisions. Be sure to use a few comparison sites to get an idea of the products and prices before committing to a purchase.
- Track your spending on an app
Let’s face it – there’s an app for nearly everything today, and financial planning is certainly no exception. To make sure you stick to your holiday budget, look to helpful money saving apps like Yolt and Money Dashboard.
These allow you to track your outgoings, and offer a comprehensive oversight of what you’re spending money on. Ultimately, they can keep you accountable to make sure you’re not buying things that aren’t necessary, be it when on holiday or when saving in the lead up to one.
- Open up about your concerns
Many people don’t like discussing their financial worries; according to KnowYourMoney.co.uk’s research, 41% of Brits do not feel comfortable talking about debt with their family and friends. This might come down to fears of judgment. But opening up can in fact encourage better practices and make saving money this summer a whole lot easier.
For instance, if you’re worried that a holiday you’re planning is out of budget, speak to those you’re travelling with to see if you can find cheaper alternatives to activities and accommodation options. This will lift a massive burden off your shoulders, and help you enjoy the holiday without worrying about it setting you back.
The summer holidays are a time for relaxing and enjoying yourself, but sometimes this is hard to do when you have money constantly on your mind. Taking the time to plan in advance and get your finances in order will help you take advantage of the summer months without accruing huge amounts of debt. After all, the holidays should always be about unwinding and taking time out from your day-to-day stresses.
Words : John Ellmore, Director, KnowYourMoney.co.uk
John Ellmore is the director of KnowYourMoney.co.uk, an independent financial comparison website that was launched in 2004. Run by a dedicated team, Know Your Money’s goal is to provide clear, accurate and transparent comparisons for a wide range of financial products.
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