After working hard all year long, we all look forward to a break during the holiday season.
It’s when most people spend their hard-earned money buying gifts or paying for vacations. While it’s an exciting period, holiday plans can run up huge bills since things are usually expensive around that time of the year. With proper financial planning, you can enjoy a stress-free holiday of your dreams without falling into post-holiday debt.
Being in March or April means you don’t have to play catch up in making holiday plans, but traditionally, Nigerians like last-minute plans.
Here are some tips on saving money for a holiday, leads you can use as we approach the end of the year and the coming times.
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Book earlier in the year: Covid-19 could have interrupted this, but it remains a crucial point when planning for your holiday times. Hotels and flights are usually expensive during the holiday season due to the high demand. However, there’s no reason to pay exorbitant prices when sites like Booking and TripAdvisor allow you to book rooms and transport months in advance. To avoid paying twice the rate, book your flights and hotels during off-peak seasons.
Identify all costs: Whether you’re planning a vacation or hosting a party, most things come with additional costs that most people don’t consider when planning. Take your time to do detailed research on what you need for your holiday plans. If you’re planning a vacation, search for popular tourist activities and how much they cost. Even if you won’t do all of them, it’s important to note them.
Make a budget: Making a budget will help you plan how much you need for your holiday and create a savings goal. Hence, you’ll know how much you need to save every week or month. Remember to make a realistic budget based on your earning and holiday expenses. If you’re not good at sticking to budgets, you can use budget apps to keep track.
Reduce your expenses: You have to exercise a little self-sacrifice to save for your dream holiday. This means cutting down on things you love. For instance, if you went shopping for clothes every month, you might have to reduce the number of times you shop and how much you spend. The money will then go towards your holiday plans, and you won’t have to worry about spending during that time.
Redirect your entertainment budget: We incur so many entertainment costs throughout the year, such as subscriptions to streaming sites, brunch dates, road trips, and so many more. This money could go towards your holiday budget. However, this doesn’t mean that you should stop socialising. Look for free or affordable things you can do in the meantime.
Stash your savings away: It’s tempting to spend money when you can access it easily. Therefore, you might have to open a separate savings account with limited access where you can make deposits towards your holiday plans. This will not only prevent you from spending that money but also motivate you to put money into the account.
Assign money to each expense: As mentioned, there are many costs when planning for a holiday, and it’s hard to budget for them individually. By breaking them down into categories, you’ll narrow your list, making it easy to assign money to each category. You might even be able to identify areas when you can cut on costs.
Use cash instead of a card: This simple psychological trick can help you save money. When you use cash, you end up spending less money than when you use a credit or debit card. Since you can see physical money leaving your pocket, you’re less likely to go over the budget. Additionally, with cash, you can withdraw the exact amount of money you’ve budgeted for. Photo Credit: Getty