If we had our way, we’d constantly be gallivanting around the world and exploring every wonder it has to offer. But the reality is, most of us would need a to win the lottery to do that. So whether you’re planning six months in South America or a much needed weekend break to the south of France, here’s some simple and effective steps to help your finances take you there.
Pick a location and work out the total cost
First things first, you need to decide on a location. You may have had Tanzania in mind for a few years now or recently heard from a friend that Cambodia is the best place on earth for culture and heritage. Either way, it’s important to decide on a location sooner rather than later. Not only does this give you the physiological motivation to work to your goal, it also means you can start planning what you want to do when you’re out there, where you want to stay and in which specific location(s).
So once you’ve nailed your dream location, it’s time to work out the total cost of the holiday. It is important here that you are honest and fair with yourself — creating a bucket list for the types of things you want to do will help you understand how much you need to save. Here is a list of key spending categories you’ll need to consider for the whole holiday:
- flights and luggage, including domestic travel if you want to explore once you’re there — these things can add up!
- accommodation which, depending on the type of holiday you’re having, may vary on its level of importance for you. Of course, Nomads Hostels are much cheaper than five star rated luxury hotels on Trip Advisor
- activities which, like accommodation, may vary depending on type of holiday you’re having. It is important to remember, that while snorkelling and spa massages are relatively cheaper abroad, these things do add up. It’s much better to budget before you go away than worry about it once you’re there
- food which, like everything else, will differ in cost depending on where you are going on how much you want to spend on each meal. Whether you’re going away to the depths of the Philippines or taking a city break to Barcelona, it is worth researching the average price of a meal and drink. This will help you work out when you should stick to the budget and which meals you can splash a bit extra for on a night out or it could allow you to prioritise other areas of spend, if that’s what you want to do.
Set up a seperate ‘holiday pot’
You’ve decided where you want to go, found that perfect hotel and have a set of activities in mind, now you need to meet that financial goal. The first place to start is by setting aside a separate ‘holiday pot’.
Depending on your situation, your dream holiday and how much it costs, your holiday pot could be a piggy bank in the corner of your room or a saving account strictly for travel. You may want to also consider finding similar products on the market that give you great returns. For example, depending on your time frame, you could potentially take advantage of an ISA tax free, competitive savings or a P2P account — all products that can potentially offer higher returns. Either way, keeping the money for your dream holiday separate from your other spending is important. It will help you easily monitor how much you’ve managed to contribute to your holiday and stop you being tempted to ‘dip’ into it.
The amount you can put towards it each month will depending on your personal circumstances, how much you’re willing to sacrifice and how far away the dream holiday is. A good place to start is by looking at your weekly budget and deciding what you can afford to allocate each week, then set up an automatic-payment so you can mindlessly deposit money into that account.
Another great way is to save money by cutting out the things you deem as less important to you. For instance, taking public transport rather than Ubers or thinking twice about a new outfit for your friend’s upcoming birthday party. For more advice on how to save, check out our article on three steps to reach your financial goal. Or, you can even use this as an opportunity to try and save some money on your utility bills each month. Often electricity, water and broadband companies vary their rates and you may be able to renegotiate your monthly price plan and change tariffs to save an extra £250 per year.
Over the weeks and months, these changes quickly amount. No matter how little or how much you can put in each week, before you know it you’ll have a nice lump sum to put towards your trip.
Give yourself time to save
So once you’ve worked out you’re overall budget and how much you can put away towards it each month, it is important to set a realistic timeline.
Like budgeting, the amount of ‘time’ you need to save is directly linked to your personal circumstance, the total cost of your holiday and how much you’re willing to sacrifice each month. When money doesn’t grow on trees for you, time is the best way to make sure you save enough for your dream holiday, and ensure you can do all the things you want to do when you’re out there.
Time, setting aside savings and the total cost of your holiday, are not mutually exclusive — each influence the other. For example, if after researching, you find you want to add some luxury or extra items to your bucket list, it will mean you either need to save more within your allocated time or or extend it.
We all know how easy it is to get excited and carried away with planning a trip. So if you’re taking a short break to France or planning an extended trip to the depths of South America, make sure its friendly on your wallet and your mind. Follow our steps and you won’t need to worry about a thing before, during or afterwards!
