Category: Loans

Is it Worth Putting Money by for a Holiday?

Many of us really enjoy having a good holiday. This might be a weekend away camping with the children or a selection of fortnightly foreign holidays spread through the year. Whichever we like to do, they will cost money. There are always different costs to account for such as travel, accommodation, activities, food and possibly new clothes too. Even though the amount individuals spend will differ a lot, there is still no question that some money will need to be spent.

Advantages of saving

Saving up the money will mean that when it comes time for your holiday you will have the money available to pay for it. This can be really handy as you will not have to think about where to get it from. You can also spread the cost over the period from when you decide to start saving to when you have to pay for the holiday.

If you manage to save lots of money it may even mean that you can afford a more expensive holiday than you thought you would. Without saving up you may have to rely on what you already had in your savings account or borrow the money to pay for the holiday. This may not change how much you spend on the holiday but of you borrow then you will have interest charges and repayments to make when you come back which might not be fun.

As you save you will get interest on the money. Although interest rates are low, that interest will still add to what you have saved and mean that you have a little bit more to spend on the holiday should you need it. If you put it in a notice account or a bond then you might be able to get more interest which will help out even more.

Disadvantages of saving

If you save money it means that you do not have it available to spend. This means that you will have to be careful with what you are spending money on and you might have to go without things. You may think that it is worth going without a few luxuries so that you can save some money but it can be difficult, especially if your income tends not to buy you any luxuries anyway. You may already be struggling to pay for everything that you need and therefore find that trying to put money aside for a holiday as well will just not be possible. It may mean that you would otherwise have to go without food, heat or other essentials and therefore is not just an option for you. Therefore, you may find that you are going without all year and that might mean that takes the fun out of the holiday. You might find that things have been so tight and stressful financially that you need a holiday just to get over that, rather than having a relaxing time where you can enjoy yourself and get away form your worries.

Interest on savings is also extremely low and this might put you off bothering to save it. You might think that you will be better off buying things than hanging on to it and getting an interest rate that is lower than inflation, meaning that the money is actually devaluing. However, you might be able to find some accounts that do pay a bit more interest but be careful as there might be a catch.

Alternatives

If you decide not to save up for a holiday then you will have a few options. You could take a very cheap holiday or stay at home and spend very little money. If you do this then you may be able to manage on the money that you have anyway. You could borrow the money instead of saving it up. This will mean that you will have to pay more as you will have the interest to repay as well as the loan. However, you may think that it is well worth it. It will be important though, to make sure that you will be able to afford the repayments. Sites like Cobra Payday loans can help make loans like this affordable.

It is certainly worth thinking about whether it will be better for you to save up for your holiday, to do a cheap holiday where you will not need extra money or to borrow. There are advantages and disadvantages to each option and it will depend on you and your situation as to which will be the best option for you. Do take time to think it through though as you do not want to regret your decision. Consider how much your option will cost and whether that is something that you will be able to afford or if you would need to save or borrow. Consider how hard it will be to take on those options and you will be able to then choose which you think will be the best one for you.