How to save money on your 2023 holiday
At this time of year, it's hard not to daydream about holidays. The call for sunshine, sea and relaxation is strong as we endure the last few weeks of winter. But with the cost-of-living crisis, saving money is the key consideration on everybody’s minds. Here are some ways you can keep the cost of holidays down this year.
Making sure you can afford to go on holiday
When is the extra UK bank holiday in 2023?
How to find affordable flights
Greener transport options can cost less
Holiday insurance and other paperwork charges to consider
Getting to the airport can soon add up
How much do people spend on holiday?
Using prepaid cards, currency cards and credit cards abroad
Making sure you can afford to go on holiday
It’s easy to get carried away when booking holidays, especially when it comes to holiday packages where full payment isn’t required until later. But it is sensible to consider how you will pay for all the holiday, not just the deposit, from the start. Calculating how much money you have left each month after bills is a solid first step. If that amount is not enough to pay for the balance, an exciting trip is also excellent motivation to start saving or streamlining spending.
Cutting back on eating out will feel easier when the money saved is going towards a weekend in Portugal. It may be that you can’t afford to book a holiday this year based on the amount of money you have left after bills. One option to consider is saving up for a whole year with the aim of going on a holiday next year instead.
Some people research credit cards to spread the cost of one-off purchases such as holidays. These can be used to make larger purchases and pay them off without interest but be aware that you will need to commit to repayments. Our handy credit card comparison tool showcases a variety of credit card providers to make it easier for you to choose which is best suited for you.
January and February are always popular months to book holidays. It is the best time of year to do so for many people, as they can commit to paying off the cost gradually over the coming months. Holiday operators often have special offers at this time of year.
For others, saving first or purchasing a last-minute holiday may work out better.
When is the extra UK bank holiday in 2023?
This year there will be an extra day off as part of the UK bank holidays 2023 for the coronation of King Charles III. It takes place on Monday, May 8, 2023.
As it follows the traditional May Day holiday on Monday May 1, those two weeks are likely to be a bumper fortnight for holiday bookings both in the UK and abroad.
How to find affordable flights
If you are happy to design your own break rather than going for the simple all-inclusive holidays, this can be the most cost-effective option. Be aware that finding flights will take time, so set aside at least a few hours for online research.
Being flexible with your dates is key to securing less expensive flights. Travelling midweek or off season when there is less demand for tickets will pay off at the checkout. If your dates can’t move, as is often the case when families must work around school holidays, be flexible with your holiday destination instead.
Flight comparison websites now allow people to search for flights to multiple locations, or even worldwide, in one fell swoop. For example, Skyscanner, a travel website that allows users to compare prices for flights, hotels, and car rentals. It allows users to find the cheapest deals on travel and helps them plan their trips by providing information on destinations, airlines, and travel dates.
Greener transport options can cost less too
Did you know that travelling by train is usually the most environmentally friendly way to get around? Research by the European Environment Agency found train travel remains the most environmentally friendly mode of motorised passenger transport in Europe in terms of greenhouse gas emissions compared to travelling by car or plane. And in some cases, travelling by train can also be cheaper than flying.
The Eurostar connects London with destinations in France, Belgium and the Netherlands which can be cheaper, although again you will need to be flexible with dates to keep costs lower. From there, various European rail passes offer unlimited travel across thousands of destinations on the continent.
Of course, holidays in the UK have become much more popular since the Covid-19 lockdowns of 2020. Cities and many coastal tourist destinations in the UK are accessible by train and booking in advance can result in savings. Watch out for rail operators’ special offers which allow them to fill seats during quieter times.
Travelling by train will likely take longer than air or road travel alternatives but if getting away is about the journey not just the destination for you, it’s a winner.
Holiday insurance and other paperwork charges to consider
Travel insurance can cover more than you think. Unexpected costs such as lost luggage, medical expenses or cancellations can be claimed for depending on the cover you go for.
While nobody wants to think about such things on holiday, the reality is they happen frequently. Not having travel insurance can also cost more than you’d expect. Without travel insurance, an accident resulting in a broken leg abroad could leave you with a hefty medical bill to pay.
The good news is you may already have travel insurance. It can sometimes be included in with bank accounts or credit cards as part of their benefits package. Check to see if your banking features include it before searching for the best cover for you and your family.
Depending on your destination, the cost of your holiday may also need to include charges for visas. When travelling to some parts of the world, you may also need to pay for extra vaccines. This applies to locations in Asia, the Middle East and Africa, among others.
Finally, don’t forget to check that you will have at least six months left on your passport before it expires. If not, the UK Government lists the cost of replacing an adult passport as up to £85 depending on how you apply, and for children the charge is £49.
Getting to the airport can soon add up
It’s usually the last thing people think about, but travel to the airport can add a significant amount to your holiday total. It can be frustrating to choose as there is no one mode of transport, which is affordable, reliable, and convenient.
Driving to the airport may be the most convenient option but don’t forget you will need to pay to park there while you are away. Many airports in the UK have their own rail links and booking trains in advance to ensure a cheaper price can be a good solution. Remember to allow time for delayed and postponed trains as part of your schedule.
Airport transfers or taxis can be another option to consider – especially if you are looking for more convenient mode of transport without the hassle of parking fees. Whichever option you go for, remember to factor the costs of airport travel into your overall budget from the start.
How much do people spend on holiday?
So, you’ve found the cheapest travel, secured an affordable place to stay and covered all the paperwork costs. Now you just need spending money. Working out how much money you will need to take on holiday can be difficult as there are so many factors to consider.
Work out what activities you hope to do, whether you’ll be eating out for every meal or self-catering and consider the cost of living in the country you’ll be visiting. Avoiding souvenirs and choosing to go self-catering are obvious but effective ways to bring the cost down. Some people even pack essentials such as coffee and their favourite cereals in their suitcase to make sure breakfast is covered.
There are plenty of spending money calculators available online, but it is best to have a little more than you think you’ll need, just in case.
It’s easy to let your spending guard down on holiday and there can be unexpected but unavoidable costs such as extra flip flops or even pharmacy trips in the case of illness.
When you’ve decided on a budget, it’s time to consider how you will pay.
Using prepaid travel cards, currency cards and travel credit cards
Many consider getting a prepaid card for holidays to help manage spending while abroad. Or watch the currency exchange rates fluctuating each day so they can buy different currencies in cash at the lowest price.
But prepaid cards in the UK are increasingly popular for holiday purposes to manage spending on holiday. Travel UK prepaid cards work in a similar way to your regular debit card, only you must preload it with money before you can use it. On holiday this can be a handy way to separate spending money from finances you will need for other things, such as bills, when you return home. They can also help you avoid charges, as they don’t have an overdraft facility, and many come with an app for your phone so you can keep track of what is being spent.
For frequent travellers, or if you will be visiting several countries in one trip, currency prepaid cards are also an option. These hold several currencies at the same time within one account. So, for example if you plan to visit Budapest which still relies on its own Hungarian currency, the Forint, then Vienna where the Euro is the currency of Austria, you could theoretically spend seamlessly with one product.
The currency exchange and commission fees on currency cards can also be competitive compared to more traditional banks. Two other important things to bear in mind when using your card abroad are dynamic currency conversion and cash withdrawals using a credit card overseas. Dynamic currency conversion allows tourists, say in a Spanish restaurant, to pay the bill in their own home currency rather than in Euros.
This can feel easier than mentally converting the amount back into Pounds Sterling, especially if you are splitting the bill. Price comparison is easier, and you will know what you are paying upfront. However, a currency conversion fee is usually charged and there may be other additional fees, for example if you are using a credit card which charges foreign transaction fees.
It is often cheaper to pay in the local currency, both when paying on card and withdrawing cash.
Taking out money from a cash machine with your credit card when you are abroad is something to avoid where possible. That’s because it is a cash advance on credit cards.
The fees and interest charges you would pay at home for withdrawing cash on a credit card will apply, and a foreign transaction fee will also apply.
There are lots of different factors to consider when it comes to choosing how you will spend money abroad.
Spending some time researching holiday spend options such as which travel money card is best will pay off in the long run and likely save you money too. Use our prepaid card comparison tool to gain insight into products currently on the market and find the right prepaid card for your trip.