Camping down the coast, multi-leg European sojourns, a bucket-list trip – no matter what kind of holiday you’re taking, it’s going to cost money.
We went straight to the expert for some advice on how to save for that much-needed family holiday: Scott Pape, aka The Barefoot Investor. Pape is arguably Australia’s most popular finance guru – his book, The Barefoot Investor: The Only Money Guide You’ll Ever Need, has sold more than one million copies worldwide since its first release in 2016.
These are his best tips for saving up for a family holiday without sacrificing your mortgage repayments.
Set aside a dedicated account
The crux of the Pape’s approach is to organise your money by “buckets”; different accounts that are used for different spending. This ensures money is allocated to essential costs, such as mortgage repayments and groceries, while still leaving enough money to be spent on short- and long-term rewards. One is dedicated to things that make you happy.
“Put a percentage of your income away for things that make you smile,” says Pape. “One of them is most certainly travelling.”
Plan well ahead of time
Booking a holiday at least six months ahead of time means you can keep an eye out for great accommodation deals or side excursions – and you have time to build up the funds set aside for spending while you’re away.
Plus, it will make long days at the office more worthwhile.
“When you're stuck in traffic or working late, you just think you'll be on a holiday soon,” says Pape. “If you only book it a week before you don't have that anticipation.”
Get kids involved in the planning
Children are never too young to start learning about money and getting them involved in the planning of a holiday is an exciting project to begin with.
“If you are going to plan a holiday for next Christmas, a really great thing I've found is sitting around the dinner table and involving your kids in the planning,” says Pape.
“Create a budget and ask: can anyone find cheap accommodation? Can we hire a car? Giving your kids a say [in planning a holiday] and as a family working towards a budget is going to teach them financial skills.”
Look for ways to cut costs
On a recent trip to Hamilton Island, Pape and his family hired an apartment and bought groceries from the local IGA to avoid eating every meal out.
“Kids are happy to just eat normal food like fruit. You don't have to eat breakfast, lunch and dinner at a restaurant,” says Pape.
Don’t obsess over the exchange rate
Pape advises travellers to put things in perspective, especially when you’re only leaving the country for a week or two.
“One of the things people tend to go a little bit cray-cray with is currency conversions and getting the right rate. If you're going on a short-term holiday, the one or two per cent difference in the exchange rate is not that much.”
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