Holiday budget: how to create your budget and stick to it
Do you dream of going on an adventure to a faraway land, or simply taking a relaxing break from your day-to-day? We all love the idea of going on holiday but when the time comes to book your trip, do you worry that you won’t have enough money for it? We’ve compiled some tips and tricks on how to create your holiday budget to help with your expenses—and some advice on how to stay on top of it.
How to calculate your holiday budget
Finances are often a delicate issue on holiday, but they don’t have to be if you make a budget. It’s simple: all you really have to do is define how much money you’ll need, put it aside and resist the temptation to spend it. Alongside this, a few months before your departure, choose your destination and decide on the time period you’ll be away. With this locked in, you can then draw up a list of expenses that you’ll need. If you’re planning a travel budget for Thailand, for example, you should consider the following:
- Airline tickets
- A hotel or other accommodation
- Daily activities
- Food and drink
The internet is an essential tool that will help you define the approximate amount you’ll need to allocate to each expenditure.
Remember to research everything, from the cost of living in the area, to the bank charges levied by your bank for using your card abroad. Additionally, be aware that some financial institutions apply different rates and commissions when you withdraw money from an ATM in different countries. Because of this, it’s important to check with your bank in advance, or open an account at a bank that doesn’t charge any fees abroad.
How to save for your holiday
Once you’ve made a list of your expenses, you should have an idea of the budget needed for your holiday (consider adding a small margin for extras or unforeseen expenses). Now all you have to do is start putting money aside to finance them! At N26, the Spaces feature allows you to create sub-accounts to organize your budget, and help you save up for fun activities when you’re on your break. For example, you can create a Space called “New York travel budget,” set a goal (the amount you’re aiming to save up) and transfer money into it regularly. This way, you have a clear overview of your progress and can consistently put aside money for your holiday. You can also do this in stages. For instance, as you’ll need to probably buy your flight tickets before everything else, you can create a Space called “Holiday flights.” When you save up the required amount, you can go ahead and book your travel.
Finding a cheap flight
Flight tickets are often expensive so finding a cheap one will considerably reduce your holiday budget. If you’re looking for a good price, there are several solutions available to you. For starters, booking months in advance helps, as well as opting for travel outside of school holidays when prices often rocket. You should also take advantage of last-minute promotions, but this usually involves the risk of not finding a decent flight, or not having the flexibility to choose your own destination. You can also take advantage of last-minute promotions, but this involves the risk of not finding a flight, or not choosing your destination. However, if you have a defined budget but not necessarily a specific destination, this solution could work for you!
Respect your holiday budget once you’re there
When you’re on holiday, it’s tempting to overindulge and lose track of your money. Buying an ice cream here and there, booking a spontaneous diving lesson, or enjoying an extra course at the restaurant—it all adds up and suddenly, you’ve spent over your initial budget. Although it’s important to enjoy your holiday without depriving yourself, keep an eye on where your money is going to avoid the shock of an empty bank account when you return.
Traveling at a lower cost
Remember to use public transport! Whether you’re traveling in your home country or abroad, taking public transport such as the bus, metro or train will cost you less than renting a car or taking a taxi. Most of the time, you can even buy a travel pass or a weekly subscription that gives you significant discounts. Some major cities such as New York, Paris or Barcelona also offer cards that allow you to use their public transport, as well as access a whole range of activities and sights free of charge or with a discount.
Finding cheap accommodation
Many websites offer very attractive promotional rates for hotels around the world. If you book your hotel at the last minute, there is also a good chance that you will benefit from an even better rate. However, hotels no longer have a monopoly on holiday accommodation. Thanks to the arrival of rental platforms such as Airbnb, you can rent a charming studio in the heart of London, or a villa on the beach in Thailand—all for an attractive price. Another great advantage is that if you decide to rent an entire property, you’ll have a kitchen and can reduce the money you spend on food by cooking your own meals.
Managing your food budget
While on the topic of food, consider setting a daily limit on how much you’ll spend when planning your holiday budget. If you set guidelines from the start, you’ll find it easier to stick to them and avoid splurging on three restaurant meals a day and fancy cocktails. You can also tweak your experiences and enjoy your surroundings for much cheaper. Instead of being tempted by a tourist-filled restaurant on the beach that will charge you a fortune for a burger, why not pop down to the local market and have a picnic by the water? Doing that, you might even have some money left over to buy ice cream later on.
More tips to stay within budget
If you plan your budget in advance, keep your eyes peeled for decent flight and accommodation deals and pay attention to where your money goes, your holiday spending shouldn’t get ahead of you. There’s also the following tips to be aware of:
- Prepare for your trip well. If you’re organized in advance of your holiday, by making a list of things to take away, this can save you from spending money on unnecessary things once you’re there. For example, make sure you pack your phone charger and adapter so you’re not forced to buy another.
- Have an "extras" envelope. If you’ve planned an additional, smaller budget to cover extras—such as one ice cream per day or a shopping budget, for example—remember to keep it in cash in a separate place to easily pay for smaller, unexpected expenses.
- Choose a "low cost" destination. If you travel in Asia, for instance, your local expenses will be much lower than in Australia. The cost of living can vary from country to country.
- Rent out your accommodation. As mentioned above, you can stay in a private room during your holidays by renting it from an individual. In the same way, you can rent out your own accommodation during your holiday, which will even help pay for it.
Taking all of these tips and tricks into consideration, you should now be ready for planning your adventure. And with N26’s Spaces function, starting your holiday budget couldn’t be easier!