How to Save for a Holiday

There’s no doubt about it: holidays are an expense. Whether you opt for budget or high-end, you’ll need to set a fund aside. Putting your holiday on a credit card is a danger and can add hundreds of pounds to the cost; and perhaps one you can’t pay back immediately. To save up for it, honestly and earnestly, is a far better option. Therefore, Turnerlittle.com highlights some the following tips to show you how to save for a holiday and reach your target; relaxed and worry-free.

Cash or Credit?

Firstly, let’s consider paying by cash or credit. Paying by credit is only a good idea if you have the means to pay off your bill quickly and in full. Otherwise, you could be paying hundreds of pounds extra in interest. Some travel firms will also charge you a fee for using a credit card to pay for your holiday.

It is therefore better to save up the full amount in cash, first. This then allows you the option to pay for your holiday using a credit card, with good intention, and will also mean you are likely to be protected under the Consumer Credit Act. This means you might be able to make a claim if the airline or holiday goes bust or the holiday isn’t as described.

However, it may be that you already have similar protection if your holiday is covered by ATOL. Always check this.

Set a Budget

It’s essential to work out a budget for your holiday. Once you work out a rough total, you can consider what you will need to put aside and save each month until you travel. First, make a list of all the items you will need to take care of before you go. This may include:

  1. Travel money
  2. Travel insurance
  3. Accommodation
  4. Sun cream/toiletries
  5. Travel (flight or fuel costs)
  6. Holiday clothes and swimwear
  7. Car hire (and car excess insurance)

Secondly, think about your day-to-day expenses. Consider excursions and day trips, entertainment, food and drink, and holiday tokens and treats! Set aside enough money to cover these costs and you will identify your savings goal.

Image credit: Syda Productions/Shutterstock

Start Saving

Research shows people who treat saving as a regular expense are more likely to reach their goals than people who try to save whatever is left at the end of the month. So – start saving!

Treat putting holiday money aside the same way as paying a bill, and commit to a regular sum each month or week.

Be realistic. It’s better to commit to a small, manageable sum than a total beyond your means. If you’re not certain you can afford to save, try putting spare change into a jar each week. If this works, set aside a bit more each week and build from there.

Name Your Goal

Giving your goal an identity will help you to achieve it. Try labeling a separate savings account with the name of your goal – be it ‘romantic weekend’, ‘the dream fund’ or simply the name of your destination. This will spur you on to save.

 

Image credit: Yuganov Konstantin/Shutterstock

Remember, if you start out saving in a coin jar, make sure to transfer your money to a savings account with a good interest rate; this may top up what you’ve managed to collect.

It’s possible the bank you are with will let you set up a separate pot for your holiday fund online, so check if this is possible. Otherwise, you might be able to open an instant access savings account.

Compare Prices

Price comparison websites make a good starting point if you want to find a savings account tailored to your needs. However, it’s important to remember comparison websites might not give you the same results; make sure to visit more than one site before deciding.

This is also a useful tool when you are looking to compare good value hotels, flights or excursions, so make full use of the information you have access to before you sign on the dotted line.

Watch Your Savings Grow!

Finally, keep a check on your savings regularly.

It might help to set small, manageable targets along the way and treat yourself as you make each one. When you reach your goal for this year’s holiday, set a new, possibly higher target for next year to help speed the next cycle along.

Remember to take your money-saving habits on holiday so not to overspend, unnecessarily.

Feature image credit: ShutterOK/Shutterstock

How Open Banking is Changing the Way We Bank

Open Banking is the new digital innovation sweeping UK banking services, which could contribute more than £1billion annually to the UK economy. Open Banking is the UK’s implementation of the EU’s Revised Directive on Payment Services from 2015. There will be various measures introduced, but the main one being banks will now be able to provide financial information such as your spending habits, regular payments and the companies you use with you permission. Measures such as this will subsequently improve competition in the sector, as it will allow savers to compare rates between banks and switch in minutes online.

The new reforms have only just come into force in the UK last month, and also allows customers to see all their money on one screen, also enabling them to better access budgeting tools. The changes have been enforced by big banks by the Competition and Markets Authority, however, news only recently emerged that six of the major lenders – HSBC, Barclays, RBS, Santander, Nationwide and Bank of Ireland, all missed out on the opportunity to implement the new digital tool back in January, and have now been allowed more time to comply with the innovation.

Banks such as Danske, Lloyds and Allied Irish Bank all transitioned on time, and data suggests that a small number of transfers have been made since the new rules, as lenders continue the trial the new service. It is said that a more comprehensive and detailed trial will take place in the next month, eliminating any issues as quickly as possible.

Researchers at the Centre for Economics and Business Research (CEBR) claim that despite only a few small transfers made, the impact on the UK economy will ultimately give the GDP a £1 billion lift, as well as creating more than 17,000 jobs, further prospering the chances for the UK economy to grow and to flourish in such an uncertain time post Brexit. The CEBR report, which was commissioned by Trustpilot has found that a greater transparency on customer credit risk is more than likely to reduce risk premiums and therefore expand credit access. However, the Open Banking changes could make customers more prone to scams, as customers have repeatedly said they are reluctant to share financial data with third parties. Further to this, a recent survey by Accenture has found that 69% of banking customers will not consent to sharing their financial data with any company.

So, if you are interested in Open Banking and how it works, you will be asked to agree or to decline for open banking when you subscribe to a product or service with a bank. The company you’re subscribing to will only ask for the data it needs to provide the service. They will also infer exactly what data they need, how long they need to gather the information, and what they are to do with it. At any given time, you can revoke your permission for them to use your own personal financial data.

But what’s most important is knowing who to share your data with. You must remember to be vigilant and not give out your data to just anyone. You will only be protected by your bank if something were to happen. Providers who have been authorised and regulated by the FCA will offer two types of services:

Account information services – this will allow you access different bank accounts you may own, in one place, so you can thoroughly learn how to budget as effectively as possible where all your money may sit.

Payment initiation services – this service will enable you to pay companies directly from your bank account and not using a third-party service such as Visa or MasterCard. This could expand to tech giants such as Amazon, where purchasing an item is a quick and convenient process.

If you’re interested in learning more and whether open banking is right for you, have a closer read into the initiative plans and gain as much advice and information before agreeing to sharing your personal financial data.