5 tips for saving money for your summer holidays

Planning a summer holiday can be exciting, yet financially daunting. Whether you dream of sun-soaked beaches or adventurous mountain hikes, finding ways to fund your trip can alleviate some of the stress.

Polonius (as written by William Shakespeare) once stated: 'Neither a borrower nor a lender be'. All very well if you have savings, a decent income, or a generous family. If not, you will likely have to go down the credit route and find the most efficient, cheapest and manageable way to borrow for that summer holiday that suits our pocket.

Here, John Lowe of MoneyDoctors.ie shares five effective strategies to help you with that summer holiday.

1. Create a dedicated savings plan

The first step to funding your holiday is establishing a dedicated savings plan. Start by determining the total cost of your trip, including flights, accommodations, activities, and food. Once you have a target amount, set a timeline for when you want to go.

Break down the total cost into manageable monthly savings goals. For example, if your trip costs €2,400 and you plan to leave in six months, you would need to save €400 a month. Consider setting up a separate savings account specifically for your holiday funds. This way, you can track your progress and resist the temptation to dip into the funds for other expenses.

You could also set up a regular saver account with the main banks (minimum €100 per month and maximum €1,000 – you are generally only allowed one withdrawal a year. The best rates are around 2.75% before DIRT Tax).

2. Take on a side job or freelance work

If you’re looking to boost your holiday fund, consider taking on a side job or freelance work. Mine happened to be performing in a six-piece band – and yes, we paid tax on the income. This could be anything from dog walking and babysitting to freelance writing or graphic design, depending on your skills and availability.

Platforms like Upwork, Fiverr, or TaskMatch can connect you with potential clients looking for short-term help. Not only does this approach provide you with extra cash, but it also allows you to utilise your skills and network. Commit to dedicating a few hours each week to your "side hustle", and you’ll be surprised at how quickly those funds can add up.

3. Cut back on non-essentials

Another effective way to fund your summer holiday is to evaluate your current spending habits and cut back on non-essential expenses. Start by reviewing your monthly budget to identify areas where you can save or eliminate altogether.

Consider reducing your dining out, subscription services, and impulse purchases. For instance, instead of going out for coffee every day, brew your own at home and allocate those savings to your holiday fund. Even small changes can lead to significant savings over time. This method not only helps fund your trip but also encourages more mindful spending habits in the long run.

4. Utilise credit card rewards

If you have a credit card that offers rewards points or cash back, consider using it strategically to fund your holiday. Some travel credit cards provide bonuses for signing up, as well as rewards for every euro spent.
Plan your regular purchases around maximising these rewards. For example, if you have a large expense coming up, pay for it with your credit card to earn points.

Just ensure that you pay off the balance in full each month to avoid interest charges, which could negate any benefits. Additionally, some credit cards allow you to redeem points for travel-related expenses, such as flights or hotel stays, which can significantly reduce your overall trip costs.

5. Crowdfunding or asking for contributions

If your summer holiday is a special occasion, such as a milestone birthday or anniversary, consider crowdfunding or asking for contributions from friends and family. Websites like GoFundMe or Kickstarter allow you to create a campaign where people can contribute towards your trip. Unfortunately, you need a bit of a neck to approach friends and family for such a cause.

When doing this, it’s important to communicate clearly about why you’re raising funds and what you hope to achieve. Alternatively, you can ask for contributions in the form of gifts or experiences rather than physical presents during celebrations. This can turn special occasions into opportunities for collective gifting towards your travel plans.

Funding your summer holiday doesn’t have to be an overwhelming task. By creating a dedicated savings plan, taking on extra work, cutting back on non-essentials, utilising credit card rewards, and even considering crowdfunding, you can make your dream trip a reality. The key is to start planning early and stay committed to your financial goals. With a little effort and creativity, your ideal summer getaway is within reach.

For those depending on borrowings, the best option would be your local friendly credit union – they know you and trust you, so ensure:

1. You check that the repayment suits your pocket and budget. To include your rent/mortgage and all other loan commitments (including those to your Gran!) the total ideally should not be more than 35% of your net monthly income.
2. Only commit to a 12 month term – summer holidays like Christmas come around annually!
3. Never miss a repayment (it will affect your good name – check your record with www.centralcreditregister.ie).
4. Avoid overdrafts and your flexible friends (credit cards – paying the minimum every month will take you up to 20 years to repay the full debt irrespective of what the balance is!) and especially payday lenders, Klarna and authorised moneylenders (there are 35 of them on the Central Bank register – and they can charge up to 200% interest!).

For more information click on John Lowe's profile above or on his website.