How to avoid blowing your budget while you’re on holiday this summer
Holidaymakers can easily end up spending hundreds of pounds more than planned, so here’s how to rein in that all-important budget.
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Your support makes all the difference.Over two-thirds of families will travel abroad this year for holidays, research suggests.
But many look set to spend far more than they intended.
On their last trips abroad, the research from Post Office Travel Money found that families set an average spending budget of around £566 to cover resort costs, such as meals, drinks and sightseeing.
But, with families firmly in holiday mode, they then overspent by nearly £312. This meant they “bust” their budget by a massive 55%.
A separate survey, from HSBC UK, suggests that the average holidaymaker spends £250 more on “extras”, such as meals out, clothes and live events during a one-week getaway than when they are at home.
If you are hoping to keep to your budget on this year’s getaway, here are some tips from Post Office Travel Money to make sure your holiday cash stretches further:
1. Pick a cheaper resort
The good news for people travelling from the UK is that sterling has been riding high. This means holidaymakers travelling to resorts overseas may find their money stretches further than it did in 2023.
Obviously, this may depend on where you are travelling to.
Your hard-earned holiday cash may not stretch so far if you pick a destination where prices are high.
The Post Office research found that resort prices for meals, drinks and other tourist staples are a big concern for holidaymakers. Nearly nine in ten (89%) families expressed concern about resort costs and over half (54%) blamed overspending on previous holidays on the high price of meals and drinks.
So, if you haven’t already booked, do your holiday homework before booking and – crucially – consider a destination where the pound is strong and where the cost-of-living is low.
The Post Office’s recent Holiday Costs Barometer suggests resort prices in the Algarve are particularly low compared with elsewhere in Europe.
Prices were also found to be relatively cheap for holidaymakers in Bulgaria and Turkey.
Word-of-mouth can also be important, so listen to what friends with first-hand knowledge of a destination tell you about resort costs.
Greece was voted best value in a recent Post Office poll among past visitors, while Thailand was rated the top long-haul destination.
2. Could going all-inclusive help you to keep costs low?
It could be – provided you stick to what is included in your all-inclusive package. A la carte meals, international drinks brands and even bottled water are just some of the items that could cost extra in some all-inclusive resorts.
Holidaymakers could try to avoid unexpected costs by asking their travel agent or phoning the hotel where they will be staying to confirm exactly what’s included – and what isn’t.
Soft drinks and bottled water can cost “all inclusive” holidaymakers an average of over £82, Post Office Travel Money found.
You could save money by paying a visit to the local supermarket or minimart to stock up on drinks.
Local resort restaurants, shops and bars can also be places where holidaymakers over-spend – so allocate a realistic budget and bear in mind that prices could be higher in beachside bars and restaurants.
Laura Plunkett, head of Post Office Travel Money says: “Year after year, our research has found that while holidaymakers choose all-inclusive packages in order to control spending on meals and drinks, most of them pay hundreds of pounds extra once they arrive in their all-inclusive resort.
“It’s important to be realistic and factor in the extra costs you are likely to incur both in your all-inclusive resort and when you go out to local restaurants, bars and shops.
“Eating out in local resorts will broaden your destination experience but it is best to be prepared and take enough foreign currency to cover the costs you will incur by doing so – particularly as some restaurants are reluctant to accept credit or debit cards.”
3. Budget carefully and avoid extra fees
Think ahead and compare deals when it comes to travel money and remember that it could be significantly more expensive to change money at the airport.
Check with your bank whether it applies fees on card transactions or ATM withdrawals abroad. Planning realistically could help to prevent paying extra fees abroad for paying on plastic or withdrawing cash from an ATM. If you do run short and need to get more money, remember that fees from multiple ATM trips can easily mount up.
Some people may consider a pre-paid currency card as an alternative.
It could also be unwise to pay in sterling when using a card abroad in shops or restaurants – as it could cost more than if you had paid in the currency for your holiday destination.
4. Keep meal costs to a minimum
Local beer and wine may cost less than more well-known international brands.
You could also try and go for recommendations from locals when choosing places to eat, rather than opting for the well-trodden tourist hotspots.
Also be sure to check whether service charges are included or whether a tip will be expected on top of the price of a meal.
5. Head off pester power
A third of parents told the Post Office that splashing out on children’s beach items contributed to overspending on their last holiday.
You could avoid this by packing what you can in the suitcase and providing a set amount of pocket money so kids can decide for themselves how to spend it.
6. Avoid being scammed
In addition to Post Office Travel Money’s tips, UK Finance’s Take Five to Stop Fraud campaign is warning people to be alert to fraudulent holiday deals.
Many holiday scams start online and bogus adverts may clone the websites of genuine travel companies.
Criminals may also post fake advertisements for holiday homes or flights on trusted websites and social media, hoping you’ll click on them and pay them directly by bank transfer.
Paul Maskall, Take Five to Stop Fraud spokesperson warns: “Be on the lookout for criminals wanting to take away your enjoyment.
“Criminals are relentless and will do anything to get their hands on your money so it’s important you protect yourself from any threat of holiday scams and follow the advice of our Take Five to Stop Fraud campaign. Always take a moment to stop and think before parting with your information or money as only criminals will try and rush you. It could save your holiday.”