Does taking a holiday seem like something that you can never afford? I know how you feel, I've been there. You start looking at fancy hotels, beach resorts and flights, and very quickly a short getaway can cost your entire year's spending money, or more. But it doesn't need to be that way! I have some tips for saving for a holiday, no matter what your budget.
Next week, I'll be sharing a series of posts on saving for and planning a vacation. These budgeting tips are useful whether you are saving for a holiday, or just trying to get your finances on track. But a holiday is a good motivation, right?
A lot of people find it hard to justify spending money on a holiday. It can be a large amount of money to spend, and at the end, what do you have to show for it? It's not an investment in a physical 'thing' like a house, or a car. But physical objects can be just as temporary, and the benefits of taking a holiday far outweigh the financial costs. While you are relaxing and rejuvenating your body and mind, you will most likely meet new people, see new places and have new experiences that you wouldn't consider at home. Getting out of your standard environment is a good character building exercise too! The psychological benefits of taking a break are too great to ignore. I know for myself, I'm always thinking back on good times I had on vacation when things get a bit stressful at work!
If you are ready to start a holiday budget, you can complete these steps before next week so that you can be ready to take action on the savings ideas that I'm going to share with you.
1. Look at what you currently spend
If it's complicated, or you just want to keep an accurate record, you could use some budgeting websites or apps like Buxfer, Mint or BudgetTracker. You could also just set up your own spreadsheet using google docs or similar, or use a free online budget service with your bank account.
2. Break down your earnings vs expenses into monthly payments
Remember to take into account the main things like rent/mortgage, utilities (gas, electricity, water, phone, internet, council fees etc), groceries (include food, toiletries and cleaning supplies), medication, transport and other monthly expenses like insurance. Then add in extras like eating out, entertainment, socialising, clothes, vet bills, gifts etc. Things that may not happen every day, week or month, but estimate (or find out) your monthly spending on these items.
That's it! Check back next week, starting Monday I'll be sharing ideas on how to save money for a holiday, and saving while you're on holiday too!