Spreading the cost of your family holiday

 

April 21, 2008

At this time of the year many families start thinking about booking up their family holidays, but before they can take the plunge they need to ensure that they have the cash to make the booking. Family holidays can be very expensive depending on where you are going, and in many cases you may not have all of the cash that you need upfront. However, there are a number of ways in which you can try and spread the cost of your holiday so that the financial impact is not too severe.

Many people decide to book their holidays on their credit cards, paying the total cost of the holiday on the card so that it is all booked and paid off, and then repaying the amount that they have spent in instalments, which enables them to spread the cost of the holiday. If you are planning to pay for your family holiday in this way then it may prove cost effective to get a 0% purchase credit card, which will enable you to enjoy a longer period of interest free credit so that you do not get charged extortionate levels of interest for paying off your holiday bit by bit. Some cards offer 12 months or more of interest free credit, and this will give you a generous amount of time to repay your balance without being hit by interest charges.

Another way in which you could spread the cost of the holiday is to pay your deposit on the holiday in advance to your travel agent. The deposit is usually only a small percentage of the total cost, so should not clean you out. You can then spend the rest of the time between the time that you pay the deposit and the time that the balance of the payment is due saving up on a monthly basis so that by the time you have to pay off the balance you have the money in your account. This sort of arrangement is best reserved for those that plan to book their holidays well in advance, as it allows plenty of time to save up.

Some people decide to take out a personal loan in order to pay for their holiday, and the loan is used to pay for the holiday and full. You can then repay the loan on a monthly basis until it has been paid off. However, you should avoid stretching your loan out over too long a period, as you could otherwise find that you are still repaying your loan by the time your next holiday comes around! You should aim to pay the loan off within a twelve month period if you tend to book a holiday each year, otherwise this could lead to spiralling debt.

Alternatively you can simply put some money aside each month, which you can then use to pay for your holiday – and depending on how much you put aside even your spending – and once the holiday is over simply start putting money aside again each month ready for the next one. This is one of the best ways to spread the cost of a holiday, as it means that you will not have to get into debt in order to fund your family holiday.

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