Holidays are incredibly important to us as a nation. In a recent survey commissioned by First Direct, more than four in ten Brits said going on a holiday is their top ‘non negotiable’ luxury of 2023. Here are five tips to stretch your budget.
As we head towards Christmas, many of us will have travel on the mind. We’ll be looking forward to a winter break, whether it’s a countryside escape, some lustrous winter sun in a far-away location, or a European city break.
In fact, the latter is the most popular option for winter holidaymakers, accounting for one in three winter trips planned, followed by chalet/countryside retreats (30%) and long-haul winter beach breaks (26%).
Winter travel aside, Christmas and New Year are also a popular time to make travel plans for the year ahead.
Although we know going on holiday is a priority for most people, there’s also plenty of evidence to show that cost saving is at the forefront of our minds when making our plans. This is both in terms of making financial sacrifices to save up for a holiday, but also to make sure budgets stretch a bit further.
When quizzed about whether they’ve cut costs on their last holiday, 38% of holidaymakers admitted that they’d opted for different, cheaper locations than in previous years.
More than one in four (27%) had scaled back their holiday duration, opting for shorter breaks, while 23% reduced their holiday spend budget and 18% chose cheaper accommodation. One in ten picked an all-inclusive break this year, when they wouldn’t usually.
With costs a major factor, it is clear people are thinking about the best ways to make holiday budgets stretch further. However, many won’t be considering some of the smaller changes they can make to maximise value on holiday spending.
There are five top things people need to consider when planning their holiday budgets this year:
1) Check whether your bank charges fees
If you plan on using your debit card abroad, speak to your bank or review your terms to check if there are charges for overseas transactions. Using debit cards that charge for overseas transactions for the entire holiday can really add up in terms of additional fees, as many providers will charge around 2.75 to 2.99%.
Certain providers, including First Direct, don’t charge for overseas transactions or ATM withdrawals, so choosing an account that’s fee-free will add up to big savings over time.
2) Check the exchange rate charged by your bank
One of the other important card features to check before you use it abroad is the foreign exchange rate your bank offers on foreign transactions. Some banks, such as First Direct, use the Mastercard exchange rate – considered highly competitive – while other banks will use their own. If you’re looking to make savings on your winter break, using a competitive exchange rate is important.
3) It pays to go local
If you’re using your card outside of the UK and you are given the choice of paying in pounds or in the local currency, consider choosing local currency. By selecting this option, you’ll avoid any additional conversion fees the retailer or their bank may charge.
4) Consider cash requirements before you travel
Depending on the travel destination, it’s often useful to arrange to carry cash in the local currency as some merchants won’t accept card payments altogether or will charge their own fees for card purchases.
Withdrawing money from ATMs abroad might also prove expensive, even with a fee-free card, as many ATMs have separate charges for withdrawals. Doing your homework and getting a competitive travel money deal could make all the difference.
5) Be mindful and plan for unexpected charges
Whether it’s luggage fees, hotel tourist taxes or even high roaming charges for using mobile data abroad – it’s important to do your research to avoid being stung by unexpected fees. Some of those can be avoided with a bit of meticulous planning, and those that can’t be avoided can be budgeted for.
At a time where costs are high and many of us are looking at simple ways to save a little money, applying some easy measures to avoid unnecessary fees can make a real difference.
Whether you’re about to book a winter holiday, considering some plane tickets as a Christmas gift to a loved one, or planning ahead for 2024, easy changes can and will add up over time to significant savings.
Lloyd Robson is head of banking at First Direct
The survey of 2,000 UK respondents was carried out between August 28 – September 3, 2023 by provider TLF.
