A holiday cannot truly be enjoyed knowing that you owe hundreds or even thousands on your credit card. With a simple savings plan you can rest easy with the assurance you haven’t racked up any debts for your vacation. With the following tips you can better plan and save for your next getaway.
Cash or Card – Learn What Your Options Are
To avoid financial distress and the accumulation of debt on your credit card, paying cash for your vacation is the best decision you can make.A great way to protect your interests and your finances is to save in cash. Your savings should cover the costs for the ticket, general expenses and accommodation.
The use of a credit card is mostly beneficial for your airline and hotel purchases as you receive protection from the Consumer Credit Act. Should your vacation requirements not be met at your chosen place of accommodation or travel arrangement, you could make a claim to protect your interests and finances. To ensure you settle the outstanding charges on your card upon returning home, you must be disciplined enough to use the savings you have generated and not to spend it on other areas.
On the downside you will be charged interest on the credit cardincluding a fee for using your card to make your holiday purchase. Always learn about credit card regulations and the charges on the card when making international payments.
To Best Plan for a Holiday Savings, the Following Tips Can Make All the Difference:
Plan Your Expenses
Determine just how much you can save for your desired holiday. Create a holiday plan detailing everything you need to create a safe and enjoyable vacation. Items that should be included in your plan:
- Cost for travel (airline, train, by sea)
- Travel Insurance
- Transport (including car insurance for rental vehicles)
Don’t forget to include general holiday expenses from transport to meals and sightseeing activities.
Initiate Your Savings Plan
Start by dedicating a sum you can afford to a separate savings account each month. You can start as small as putting cash in a jar if need be! Simply consider how much you can spend each month in savings. Also exercise discipline not to dip into your holiday savings at any stage.
How to Stay Motivated to Save
Determine which destination you wish to visit and keep this destination in mind while you save. If you feel tempted to cut back on your monthly holiday contribution, simply imagine yourself on your vacation and find the motivation to stick to the plan. It will be well worth it in the end!
Secure Your Savings
The more your savings grows, the stricter you need to become with its access. While you could continue with a separate savings account linked to your bank or open an instant access account, a significant sum should not be easily within reach. A secure fixed deposit account limiting your access could be a great way to save. It allows you to continue to make contributions without having access to the money until the maturity date or agreed upon percentage withdrawals for the term.
Shop Around for the Best Interest Rates
Compare prices for savings plans and accounts before you decide to make your savings investment. While it is more convenient to link a savings account to your current bank, you could earn higher interest and pay less administrative fees with another credit provider. Shop around for the best savings plans.
Relax and Allow Your Savings to Grow
Once you have determined your savings plan and opened an interest-bearing account, you can have peace of mind your holiday savings are secure. This does not mean you stop making contributions. Continue to add to the account until you reach your financial goal. The added interest will help you get there a little faster but the more money you add, the more interest you earn.
Continue to identify how your savings is working for you. You should always receive the best interest rates.
To avoid tax payments on your earned interest, it is a good idea to use your annual Cash ISA allowance.
Only with research can you determine which financial options are best for your holiday savings plan and credit record.
The Benefits of Saving
Creating a savings plan for a holiday is not only about saving for your vacation. It is about exercising financial discipline. Getting into a habit of saving can be applied to all financial areas of your life. It is also a great way to introduce children to saving and its financial importance.
If you have credit card debt, invest in a savings plan to settle a lump sum. Credit cards must be paid on a monthly basis but if you can put extra cash aside and allow this to grow, you can pay a huge portion off your credit card and significantly reduce your charges.
Once you are prepared to experience a vacation you can afford, exercise precaution when using a credit card. Always set a limit if you cannot maintain your expenditure. While on holiday the beauty and relaxation of a destination can quickly send your spending habits into overdrive. Understanding your limits and savings will help prevent facing insurmountable debts upon your return home.
A positive and motivated approach can help you save for your next holiday. Have peace of mind knowing you can afford your expenses without the risk of exorbitant credit card debt.