Slideshows | April 5, 2013

Seven smart tips for saving for a holiday

Holidays can be a great way to rest and relax. And they can be even better if you plan and save in advance.

Saving in advance can mean you won't worry when you need to spend in future. A good example of where we can see this effect playing out is when planning for a holiday.

Taking small steps is thought to help boost motivation to save. You can also make the goal seem more real by deciding where to go and try giving the dedicated holiday savings account a name specific to the experience – such as "Ian’s safari fund".

In addition to making the financial aspect of a holiday more secure, planning ahead my also pay off in terms of anticipation and happiness, suggests a study of Dutch holidaymakers. After all, don’t you enjoy looking forward to good things planned in the future?

 

1

New holiday, new continent A first step for saving for a holiday is to decide where to go and for how long. This will help determine how much money you need.

2

Which currency do they use? If your destination uses a different currency, perhaps factor in a buffer in case of exchange rate shifts. Shop around for foreign currency – airports can be an expensive place to buy.

3

Account for the exceptional Estimate all the costs, including food, hotels, sightseeing and insurance. People tend to ignore exceptional expenses, research suggests, so add them all.

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Remind me Count the months before departure to work out a monthly savings target. A dedicated holiday savings fund can make progress easy to see. Automate regular deposits and set reminders.

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I call it my safari fund If your bank allows, name the account accordingly: think “Ian’s safari fund” rather than “bonus saver 2”. The name may make your goal seem more real and boost motivation.

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Cut the pain of paying When you pay for your escape might make a difference as well. Ideas about the “pain of paying” suggest paying in advance may boost enjoyment, instead of having to stump up the cash later.

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Short and sweet Two shorter or cheaper holidays can be better than an expensive long one. And a study says people enjoy looking forward to holidays more than remembering them; if true, this might double the joy.

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eZonomics team
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