One major problem families face when they are looking to go on a family holiday is saving enough money. We have found a great way around saving money towards a family holiday is to set up a separate account. This means you don’t dip into your family holiday budget.
We call this separate account our holiday bank account. There are many options available, but personally we have a normal current account with the same company we have our main accounts with. This means we can easily transfer money via our banking apps, which saves us a lot of time.
Setting Up A Holiday Bank Account For Family Holidays
First you need to decide whether a current account or a savings account would be best. A current account will mean you can access your money at any time, but the interest into the account will be a little lower. However, a savings account may mean you can only make a few transactions per year. Although the interest rate may be more, which will mean extra pennies for you to spend.
You could see if your bank has an account that offers no fees on foreign transactions. This will help when you are away on holiday and you purchase something on your card. Another option would be a holiday credit card or a prepaid travel card (for when on holiday only).
Once you have made your decision on the type of bank account there are a few other things you can do to help you get the most out of your holiday bank account.
Set a Budget
We have a separate bank account (joint bank account) that we transfer a set amount of money into every month (remember to start with you don’t have to transfer huge amounts, start small and increase every few months). This also allows you to make sure that you can comfortably afford the amount you are transferring. This means we know that the set amount of money will be increasing every month and we don’t have to worry that we will spend the money. Below I will help you plan on how to set your budget and things you need to cover to help get your holiday budget correct.
What Budget Will Cover
So, this set amount of money that we set aside each month has previously been budgeted by me (Sam). Things that the budget needs to cover while we are on holiday are:
- Transport (flights, ferry etc)
- Fuel if going by car
- Airport car parking (if parking car)
- Pet Boarding etc
- Some extra money for postcards, souvenirs.
- Travel Insurance
Each time you plan your holiday, you need to work out a rough estimate for this above budget, and then make sure you can afford the monthly transfer. If you are looking for more details on ways to budget for a family holiday, then you can check out our helpful holiday budgeting post.
Having a separate bank account for our holiday money gives us peace of mind that we won’t be stressing at the last minute because we have been spending it on other things either through the month or the year.
Once back off our holiday if there is still money left then it stays in the account for our next holiday. Which then means we could either go away again in the same year or spend a bit extra on the next years holiday (i.e better accommodation)
Do you have a separate bank account for your holiday savings?
First published Feb 2016