At the end of each year, many of us think about how we want to spend the following year, what resolutions we might have, and any holidays we would like to take. Rather than trying to scrape together money nearer the time, how about saving up for your holiday NOW. Here are some tips to ensuring you save up enough money to take a holiday next year:
#1 Start as early as you can – If you’re thinking about it now, then act now and start saving. Putting it off only makes those dreams even more far-fetched!
#2 A little can mount up to a lot – You might think that saving that extra $10 really won’t get you anywhere, but any amount of money tucked away is a good thing, so don’t feel disheartened. Keep the momentum up and stay focussed on the end goal!
#3 Get the right savings accounts – Make your money work for you. Interest rates have fallen but it’s still a good idea to seek the best rate you can, and put your money into the account regularly.
#4 Prioritise your money – Wonga advises you address your existing debt and talk to your creditors as a priority, rather than putting it off. Don’t save for a holiday you can’t afford if your debt is going to spiral out of control in the meantime; organise your money and be sensible about what you do with it. By repaying your debt, your excess money can go towards your savings, and your holiday.
#5 Forgo the holiday if times are tough – We don’t want to put a downer on things, but if your debt is an ongoing problem and strain in your life, then it is wise to be careful about your spending and although it might make you feel better in the short term to book a holiday, in the long term your finances will suffer even more. The money academy suggests addressing four pillars of your finances – debt, savings, budgeting and investment. By addressing each area, you can reasonably decide how well you can afford the holiday, how to budget for it, where to save or invest your money, and what to do about any existing debt that could be burdening you. If it looks a bit bleak, forgo the holiday – or your expectations for the holiday. Perhaps shorten your plans for just one week away instead of two, for instance.
#6 Make your money work hard – It is important to make your money work for you, however much you earn. Think carefully about what products you are buying and which accounts you are using – by being financially literate and savvy about your money, you can save up for that holiday you are dreaming of in no time!