The “I’m on holiday effect”
You’re away in a different town, see a nice bag in a store and think “I’ll have that – I’m on holiday after all”. The same goes for an unplanned, extra meal out or an impromptu day trip to a nearby village.
Being on vacation seems to make some of us more willing to spend than usual, particularly if the currency is different to the one holidaymakers usually use. As the eZonomics team doesn’t know of a recognised name for this thinking trap, we’ve dubbed it the “I’m on holiday effect”.
It is similar to the feeling that food seems to taste better on holiday, blogged about on Tutor2u and backed by an eZonomics poll. In these cases, atmosphere plays a role in decision making and enjoyment.
I’ve been planning this holiday for years
An earlier eZonomics poll on holiday savings strategies gives tips on how to save and budget for a break away.
It suggests working out the basics first, such as where you want to holiday and how long for, then calculating the expected cost (including travel, dining out, accommodation and sightseeing). Given our tendencies to spend more than budgeted, work in a “I’m on holiday effect” buffer. And if exchange rates are involved, be aware the cost could move up or down.
The second suggested step is to set up a dedicated holiday fund and deposit set sums regularly until the target is reached. Giving the account a specific name - such as "Scuba diving in the Maldives" - makes the purpose clear and may even encourage you to save more.
Planning and saving for a holiday may have unexpected benefits, as Psyblog writes studies suggest “we get enormous amount of pleasure from looking forward to good things in the future”.