HOW TO CREATE A HOLIDAY BUDGET 

The cost of family holidays, particularly package holidays, has increased hugely over the last couple of years. This is why creating a holiday budget is more important than ever. Here is a guide to setting an overall budget and planning your holiday to stay within that budget. 

WHY HAVE A HOLIDAY BUDGET?

Over several years of organising family holidays, I have learned that it is essential to set an overall budget before even considering booking a holiday. 

There is so much more to the cost of taking the family away on holiday than flights and accommodation. 

All sorts of other things need to be considered, from travel to and from the airport to the cost of pet sitters. Then those delightful local hotel taxes and additional hidden costs arise. 

It is so easy to end up overspending on what you thought was a cut-and-dried cost, especially when you are forced to book during the peak season of the school holidays. 

This is why it is really important, whether your family holiday is a staycation or a luxury holiday abroad, to create a holiday budget and ensure that you stay on track with your spending.

The last thing anyone wants is to arrive home from a dream holiday and start stressing about how much it has just cost. 

HOW TO SET YOUR HOLIDAY BUDGET

There are three main steps to creating a holiday budget:

• Deciding how much you can afford to spend
• Getting a rough idea of all the costs that you will need to cover
• Booking a holiday that works within your total budget

STEP 1: SETTING YOUR OVERALL BUDGET

The first step to creating your holiday budget is deciding how much you can afford to spend on the holiday.

If you have a family budget set up, this could be as easy as checking how much you’ve already budgeted for your family holiday this year.

If you haven’t got one but would like one, you can use my create a family budget guide to get started. 

Other ways to decide on a figure to set include:

• Looking at what the final total was for last year’s holiday and using that
• Working out how much you could save each month towards the holiday
• Deciding if you will ringfence money in your savings for a holiday

STEP 2: COSTING OUT YOUR HOLIDAY

Once you know how much you can afford to spend on a family holiday, you must understand what the entire holiday will likely cost before you book anything.

There are so many more costs involved in going on holiday than just booking a package or flights and accommodation.

I usually cost a holiday by starting a holiday budget on a google sheet and listing all the holiday expenses and a rough cost for each.

If you don’t want to spend ages researching, you can include an average cost based on your previous experience. 

Once you’ve considered all the associated costs, you can confidently decide how much you can afford to spend on your accommodation and the type of accommodation to go for. 

Here is a list of the costs that you might need to consider:

1. TRAVEL COSTS

Travel costs are never as simple as the cost of flights! Here are some of the typical travel costs you might need to factor in:

• Flights
• Ferry, boat or hovercraft
• Train travel
• Travel to and from the airport
• Transfers from the airport to accommodation
• Car hire
• Taxis during your holiday
• Using own car – fuel, servicing, roadside assistance, items to make the vehicle roadworthy abroad 

 2. ACCOMMODATION

The cost of your holiday destination hotel or self-catering hire isn’t always the only accommodation cost you’ll need to cover: 

• Main accommodation – hotel/villa/B&B
• Local hotel taxes payable at the hotel – it’s always worth reading the small print!
• Overnight airport stay
• Accommodation en route (particularly if driving or splitting long-haul flights) 

3. FOOD AND DRINK

Unless you stay at an all-inclusive resort where absolutely everything is included (this isn’t always the case with so-called ‘all-inclusive’ deals), you must consider all the food and drink costs whilst on holiday. Plus the cost of food and drink en route to your destination:

• Three meals per day
• Snacks and treats
• Evening drinks
• Food for travel days – airport/aeroplane/roadside

If you know you will be self-catering, it is worth giving yourself a rough idea of the food budget you will need. 

4. ENTERTAINMENT

You might want to sit by a pool and read all day every day, but chances are, if you have a family, you will need things to do whilst you are on holiday. Here are some of the usual entertainment costs to consider:

• Sports
• Kids clubs
• Waterparks and local amusement attractions
• Shows
• Nightclubs
• Spa treatments
• Bike hire
• Guided tours

 5. TRAVEL INSURANCE

We can all agree that good quality travel insurance is more important than ever since the pandemic. 

Use a comparison site to get an idea of how much insurance will cost – but don’t forget to be clear on what the policy offers before buying. 

6. DOCUMENTATION

Here are a few different documentation costs you might need to consider:

Passports – most countries require passports to be valid for at least six months beyond the end of a trip. Always, always check your passports so that you have time to renew them before you book a holiday! Renew passports online here. 

Some countries require you to have a tourist visa. Find out if your destination requires a visa and how much it costs: Foreign Travel Advice. 

7. TRAVEL KIT

I will lump all the travel stuff you might need to budget into a ‘travel’ kit. It is scary how quickly the cost of some of these items mounts up (I do not include holiday clothes in this list), and it is much better to buy these things in advance than have to panic buy them on holiday:

• Sunscreen
• Aftersun
• Mosquito/bug repellent 
• Travel adaptors
• Travel chargers 
• Travel clothes wash (essential with babies, toddlers and young kids)
• Travel earplugs (to help with ear pain)
• Travel pillows for kids
• Snorkels – these can cost an eye-watering amount in hotels
• Inflatables for the pool – (see snorkels!) 
• Suitcases – if you need new ones

Look at my packing guide: for a much more comprehensive family holiday packing list of things you might need to pack for a family holiday.

8. SPENDING MONEY

Who doesn’t love a spot of holiday shopping?! You need to budget for everyone to have some spending money for things like gifts, souvenirs or random unplanned costs. 

It could be worth setting a daily spending limit for each family member to help control the overall amount spent.

Of course, you can always squirrel aside some extra money just in case an amazing purchasing opportunity arises!!

 Calculating how much money to take on holiday

I found this holiday spending money calculator on the Tui site. I tried it out and was quite pleased with the estimate it gave me. 

9. PETSITTER/KENNELS/HOUSESITTER

The cost of having someone look after your pets when you are on holiday has increased hugely since the lockdown, mainly because there are now so many more pets. We have a couple of cats and a dog, so the cost of having them looked after must be factored into our overall budget. 

STEP 3: BOOKING A HOLIDAY WITHIN YOUR BUDGET

Once you know all the different elements of going on holiday, you can start booking. You will now know how much you can afford to spend on the two highest upfront costs – flights and accommodation.

You can make an informed decision about things like whether to choose self-catering accommodation or a hotel. You can also decide whether you opt for bed and breakfast, half-board, full-board or all-inclusive. 

You may need to spend time balancing all the holiday costs by going for cheaper options or cutting back on spending money to bring the total cost in on budget. 

HOW TO STICK TO YOUR HOLIDAY BUDGET

I mentioned earlier that I use a google sheet to keep track of our family holiday budget when I’m organising a holiday. 

But keeping track of the cost of the holiday before the holiday starts is only half the story. It is also a good idea to keep track of your spending whilst you are on holiday.

There are several ways to keep track of your holiday spending:

1. BANKING APP

Check to see if your bank has an app that allows you to track specific spending. For example, I have an account with Starling and use its Spending Insights tool to keep track. Starling Bank. 

If your bank doesn’t provide a specific tracking tool, you could check your bank statement or statement for your credit card in the app daily. 

2. BUDGETING APP

There are various budgeting apps that you can use for free to keep track of your spending. I highly recommend Money Dashboard, which I use for my main family budget. Moneydashboard. 

I also like the Emma App but haven’t fully trialled it yet. 

3. VISUAL MONEY MANAGEMENT APP

I also use HyperJar for my daughter’s pocket money. Hyperjar is an app that allows you to create spending jars, so this would also be a great way to keep track of holiday spending. Hyperjar. 

4. GOOGLE SHEETS/EXCEL

I have to say that the last thing I would want to do when I am on holiday is to go anywhere near a spreadsheet. However, you could use a google sheet/excel document to keep track of your holiday spending!

WRAPPING UP YOUR HOLIDAY BUDGET

Once you have returned from your holiday, you can wrap up your budget and ensure you haven’t overspent. It is also a useful exercise to understand what you need to save towards your next holiday. 

I hope it goes without saying that you should always pay your credit card off in full to ensure you don’t pay interest on your holiday spending. 

IT’S TIME TO CREATE YOUR HOLIDAY BUDGET

Planning and budgeting for your family holiday are important to help you avoid excessive spending. Taking the time to budget for your holiday before booking will ensure you aren’t on course to overspend, and tracking your spending whilst you are away will ensure you stick to your budget. 

It might feel like a boring chore to have to do, but creating a family holiday budget is an invaluable money hack if it enables you to enjoy a holiday and know that you won’t be arriving back to debt and money worries, it is well worth it.