How to save for a dream holiday

Cocktails on a Cook Island beach, watching the northern lights, trekking to Everest basecamp with a tribe of men and a donkey – we all have our own idea of a dream holiday.

It’s paying for it that can often pose the problem.

Adding just $50 into an online savings account every month for 10 years will give you $6,000. Saving $100 each month means you can take that dream holiday in five years time and so on. Want to make it by next year? That will take a bit more effort, but here’s how to start saving for that dream holiday now.

Make a plan you can stick to

First things first – you have to decide where you want to go. You’ll need more money for places like Europe, the US and Canada, and considerably less for places like southeast Asia. Also, do you plan on going luxury, mid-range or budget? Once you have the basic requirements laid out it will be much easier to decide how much money you’ll need to save. Factor in meals, flights, accommodation and spending money and always budget a little extra, just in case.

Pay off your debts

Saving hard for a holiday is commendable but not so much if you already have debts left unpaid. Remember to factor in the repayments you have to make for other things before starting your holiday savings fund as they may mean you can’t save as much as you’d anticipated. Knowing where you stand will set you free to move forward without guilt or sacrifice. Then you can get really excited.

Keep a spending diary

If it’s looking like you might fall behind on your savings, it’s a good idea to keep a spending diary. For a couple of weeks, try writing down exactly what you buy. Don’t leave anything out – scribble down every bar of chocolate, every bottle of shampoo, every 50 cents for the parking meter. This might help you identify things you could go without and thus, help you save even more for that dream holiday.

Don’t pay more than you have to for services

Aside from the obvious everyday outgoings, start thinking about which services you might be paying too much for. Is there a better deal you could be getting for your Internet or mobile phone provider? Could you take out better value house or pet insurance? Is there a different place you could go to for filling up your car with petrol, or for buying your wine and groceries in bulk? Shop around for the very best deals and you’ll soon find you’ll have more for the dream holiday fund.

Stay focussed on your goals

So the savings are going well, but if you suddenly can’t afford a last minute weekend getaway, or a new washing machine, it might seem like hope is lost for the dream holiday. Stay focussed. If you spend more than you anticipated and dig into your holiday fund for something else, think about what else you can do to make that money back. Can you sell some things on eBay? Do a jumble sale? Sell some homemade crafts or take a few more shifts at work? Perhaps you can stay home some weekends instead of going out? Keep your eye on the prize.

Keep track of your savings

Automate your bank transfers if you can, so the holiday money is put aside without you having to think, but always check in on the deposits and the balance. Every time you go to book something for your holiday, check back in and make sure you have enough saved for it. Also, every time you add something to your holiday itinerary, make sure you’ve budgeted and saved for it. Will that elephant ride to the national park in Thailand mean going without that fancy dinner with your friends/partner one night? Where would you rather spend that money in the long run?

Hopefully once you’ve followed the steps above you’ll be free to look forward to your dream holiday. Don’t forget, getting travel insurance is essential to ensure everything goes smoothly. Bon voyage!

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