Sick and tired of never having enough money for a holiday? The sun is shining and your friends are jetting off to far-flung destinations for their annual summer break. How on earth, you are wondering, do they afford it? Especially since you know many aren’t financially any better off then you are!
This may be hard to hear, but essentially it all comes down to how you manage your money. Follow our 5 saving steps that could take you closer to your dream holiday
TOP MONEY SAVING TIP: People who treat saving as a regular expense are more likely to reach their target than people who try to save whatever is left at the end of the month.
However, when money is tight, it’s hard to see how you can spare anything at all for savings. But, no matter how bad things seem, there are always ways you can trim your expenditure and start saving for a summer (or winter) holiday.
Here are 5 saving steps to a heavenly holiday:
- Set realistic targets, but don’t think about the end goal YET
You know you need to save a set amount of money by a certain date but focusing on the total just makes it feel unachievable. In a report on Transforming Financial Behaviour for the UK Consumer Financial Education Body (CFEB), case studies show that for goal-based savings, realistic target setting is key for changing saving habits.
‘If you told a young person that they could save £144 a year, they may think it’s impossible, but if you translate this to cutting out one or two cans of fizzy drink a day, it becomes more achievable.’
- Treat saving as a regular expense
People tend to spend more money on the first weekend of the month following payday. We all do it. But it’s a worrying trend that is having a significant impact on our saving habits.
According to a report by LondonlovesBusiness on Payday Millionaires, Brits spend nearly half of their disposable income within 24 hours of being paid. That is a staggering statistic, and although includes regular monthly outgoings, reflects our frivolity with money just after we have been paid.
Treat saving as a regular expense. Set up a monthly standing order to your savings account to leave your account on payday. You are much more likely to save this way than if you wait and see what you have left at the end of the month.
- Don’t ignore your debt – it is costing you money
One of the reasons you may be finding it difficult to save is due to the pickle you are in with money. Ignoring debts is the worst thing you can do. First of all, seek advice. There are a number of organisations offering free debt advice. The Money Advice Service and Step Change are good places to start.
If you are juggling paying off credit cards, consolidating them into one place with a loan may make the repayment plan more manageable. Speak to your bank, or if you have a poor credit rating it may be worth considering a guarantor loan.
A guarantor loan is an unsecured loan where the borrower has a second person acting as a guarantor. GuarantorloansUK (a credit broker, not a lender) have a compare tool on their website to help you find the best guarantor loan deal for you.
Clearing your debt is a priority. Once that millstone of debt has gone, you can turn your monthly loan amount into regular savings.
- Cut back on expenditure
When you are living on a tight budget it is almost impossible to see where you can cut back on expenditure and make savings. But, we all have traps we fall into in managing our outgoings and a thorough review of what you spend your money on will give you some insight into areas you can cut back on.
Some examples of expenditure you can cut back on are:
- Mobile phone bill – shop around for a cheaper contract when yours expires
- Weekly food bill – do you really need to buy brand names? Supermarket own brands are on the whole just as good and can be much cheaper. In the popular BBC TV series, Eat Well for Less presenters Gregg Wallace and Chris Bavin taught families how to slash their shopping budget. It was an eye-opener for the families taking part.
- Switch energy supplier
- Make packed lunches instead of buying lunch at work
- Don’t buy magazines or things you don’t need
- Do you need that gym membership (walking and running at the park is free!)
- Cut down on meals out and nights on the town
MoneySavingExpert.com has more great tips on how to stop spending.
- Sell your unwanted junk
Selling the things you no longer need and turning them into cash for your savings account is a quick and easy way to find extra cash towards a holiday when the budget is tight. Try a boot fare, garage sale or de-clutter and sell things on eBay, Gumtree or your local Facebook selling groups.
When you are on a tight budget a holiday may feel unachievable. But, follow our 5 saving tips and your dreams of a holiday can become a reality.