How Holiday Financial Planning Can Take the Stress Out of Your Next Adventure

Travelling while nervously watching every coin is a sure way to take the fun out of a holiday trip. Can I afford to eat at this fancy restaurant? Should I splurge on a premium hotel room? And, perhaps most stressful of all, am I blowing my entire monthly budget on this trip?

The stress and worry can ruin what should be a refreshing break from work. But with some holiday financial planning, you can enjoy a deserved vacation without the constant mental math.

Holidays Are a Necessity

Going on holiday isn’t frivolous spending; it is essential for your sanity. After months of hard work, it’s important that you take a break and disconnect from everyday life, whether it’s with a wild adventure to the mountains, a relaxing time at the coast, or an overseas trip.

That’s why you should budget for a holiday the same way you plan for other expenses, like your child’s tuition or monthly utilities. Be sure to give yourself plenty of time to plan and save. Trying to make travel decisions and scrounge up cash at the last minute often results in overspending and unforeseen expenses.

Figuring Out How Much Your Holiday Will Cost

To get your holiday savings plan rolling, first figure out how much you’ll spend on your trip. This goes hand in hand with all the other travel planning you need to do, like deciding where you’re going, comparing hotels, and researching different activities and tourist sites.

Break down costs for every part of the trip, starting with how you’ll get there (check and compare ticket prices or calculate the cost of fuel if you’re driving), accommodation, food, and so on.

Beyond these obvious costs, there are many other extra expenses that can add to your travel budget.

For example, you may need to buy some things before you travel, like luggage, beachwear, and travel toiletries. If you’re camping or travelling in a caravan, there’s a bunch of gear you’ll need to buy, and it won’t be cheap.

A caravan costs north of 100K, and hiring one will cost you hundreds or thousands of dollars, depending on how long you’ll be away.

What about leave? If you’re employed, do you have enough leave days to take your trip? If you don’t, check whether you can purchase leave from your workplace. It will reduce your pay, so you’ll need to factor it into your expenses.

Other costs that are easy to miss include travel insurance (especially if you’re going overseas), hotel laundry costs, buying souvenirs, and getting around locally.

Factor in all these costs into your budget, so you won’t find yourself without enough money or spending more than you’d planned. And don’t forget emergency and miscellaneous expenses for anything unexpected, like illness or flight cancellation.

A couple of things to keep in mind as you create a holiday budget:

• Make sure your budget fits into your wider financial picture. Do not overstretch yourself or go deep into debt for the sake of travelling. There are plenty of ways to have a fun and relaxing holiday on a budget (check out our best tips below).
• Get value for your money. The cheapest flights or accommodation won’t necessarily be worth the savings, and expensive activities or attractions may not always be worth the money. Focus on choosing what you think you’ll enjoy that’s within your budget.

Saving for Holidays

One of the advantages of early holiday financial planning is that you have plenty of time to save for it. This eliminates the need to blow up your credit card to pay for the trip.

Spread out the total cost of your holiday trip over the number of weeks or months between now and when you travel. This tells you how much you need to put aside each week or month to be able to afford your trip.

We recommend putting the money in a dedicated savings account, so that it doesn’t mix up with the rest of your finances and you’re not tempted to spend it on other things.

As the trip gets closer, withdraw some of the money to pay for things like flights and accommodation. You can usually save a decent amount of money if you book them early.

Tips to Reduce Holiday Costs  

There are lots of ways you can bring down your holiday travel budget and make it easier to save for your trip. Here are some ideas:

• Research and compare to find the most affordable options when it comes to flights, accommodation, activities, travel insurance, and other expenses.
• Choose accommodation that meets your needs. If you’re travelling solo or as a couple, a traditional hotel is perfect. If you’re going as a family, self-catering accommodation like an AirBnB might be cheaper than a family hotel room, and could save you money on food.
• Travel during off-peak season. Not only will you avoid crowds, it’s also cheaper since there’s lower demand for hotels, experiences, and other things.
• Book flights and accommodation early; it’s usually cheaper.
• Consider visiting less-popular cities and towns. Things tend to be more expensive in touristy places, not to mention the overcrowding. Going off the beaten path saves you money and you can enjoy your holiday in peace.

How Lifestyle Led Wealth Can Help You Plan For Your Holiday

Justin Hooper, our financial planner at Lifestyle Led Wealth, has helped many clients plan their finances and enjoy the life they want.

If you’re planning a holiday trip and are wondering how best to save and plan for it, Justin can help you. He’ll take into account the kind of holiday you want, your current financial situation, and your bigger financial plan, ensuring you can enjoy your trip without worrying about your finances.

Contact us on 1300 068 453 to talk to Justin about personalised holiday financial planning.

Disclaimer: The information contained in this document is of a general nature only and has been prepared without taking into account your objectives, financial situation or needs.