Saving money for a holiday

Saving money can be tough, but it's worth trying. Many people struggle to save because they don't have extra money. But there are ways to find some extra cash for savings, such as:

• reviewing and switching your energy supplier

• ensuring you're receiving all the benefits you're eligible for

• keeping track of your income and spending to manage your budget better 

• cutting down on expenses in the areas where you spend the most

It’s important to figure out how much you want to save and how much you can afford to put aside each month.

Here’s how to do it.

First, make a list of all the items you’ll need to take care of before you go, like:

• travel (flights or fuel costs)

• accommodation

• car hire (and car excess insurance)

• travel insurance

• travel money

• holiday clothes and swimwear

• sun cream and toiletries.

Second, think about the day-to-day expenses on holiday like:

• food and drink

• entertainment

• holiday treats 

• Excursions.

Add all these costs together and you have your savings goal.

You might be able to get holiday costs down a bit too, meaning you’ll have to save a little less money.

Treat saving the same as paying a bill and commit to saving a regular sum each month or week. This way it’ll be much easier for you to budget savings and spending.

But be realistic - it’s better to commit to a small, manageable sum than to try too hard and give up.

If your income varies from month to month or even week to week, put aside an amount you know you can stick to, however small it might feel. You can always add to it later. The trick is to not touch the money you’ve set aside.

• Start small by putting spare change into a jar each week. 
• If this works, set aside a bit more on a regular basis.
• If this is difficult, save what you can as regularly as you can. Every bit makes a big difference.
• Try saving socially, for example, with a friend, and check in with them to see how it’s going.
• Make it visual and track your progress with a chart – you can put something up on the fridge or on a wall in your bedroom.
• Use a Direct Debit or standing order to automatically take a regularly amount of your pay and put it into a savings account so you’ll never forgot to save.
• Name your goal  – whether it’s a family trip to the UK coast or a romantic break in Rome, naming your goal will keep you motivated.

It’s time to start thinking about where to keep your savings.

Bank accounts make it easier and more secure to save your money. You might start with a coin jar - putting £10 away a week gets you £520 in a year. But make sure you transfer your money to a savings account when it builds up to a tidy sum.

This way, you can earn a bit of interest on top.

Your bank will let you set up a separate pot for your holiday goal online. Set this up if you can as it’ll help you keep a target in view and track your progress.

Comparison websites are a good starting point for anyone trying to find a bank account tailored to their needs.

Comparison websites won’t all give you the same results, so it’s a good idea to use more than one site before deciding.

It’s also important to do some research into the type of product and features you need before making a purchase or changing supplier.

Almost three out of every four people experience at least one unforeseen expense a year. It’s for things like car breakdowns, the oven packing up or even a parking fine that could put a real dent in your savings goal.

The best way to not get caught out is to always put away a little something to cover these costs, even if your main saving goal is for a holiday.

Here’s how to make sure you’ve covered if something expensive unexpectedly happens:

List out possible expenses

 What expenses do you think could come up? Is the car showing signs of wear, is the boiler or washing machine very old?

Can you reduce the chance of the cost, by getting a service or insurance? 

Can you replace something cheaper in a sale now before it breaks completely or is someone you know offering something you will need or a skill you can get a discount on?

Work out how much a typical emergency fund is for you

This can help you have something to aim for.

Even when you’ve finished saving for a holiday, don’t stop – the money can be used for emergency funds, can go towards a new holiday, or help you live comfortably in the future.