Posted on Tuesday, 27 October 2020

The era of Covid-19 has put pay to many of our holiday dreams. Quarantine and testing restrictions, coupled with fewer jobs has meant that much-desired trip to Bali or New York has been placed on the backburner. In addition, a two-week holiday may require six weeks off work when quarantines are factored in.

But even though times are tough, there's reason for optimism. Pharmaceutical firms, universities and health departments worldwide are working hard to come up with a vaccine. So next summer - just maybe - you'll be able to take that much longer-for break.

Additionally, many of the world's economies rely heavily on tourism, so there's huge pressure to reopen borders as soon as possible - which is great news for travellers.

How to pay for it

But for many of us, the cost of such a holiday will be the biggest issue. How are you going to pay for it? Here are a few useful tips for building up your travel fund.

Destination and level of comfort

You may be dreaming of five-star hotels and taking every day-trip on offer, but this approach will burn through your budget quickly. Consider a cheaper destination, mid-range hotels - and less sightseeing. This way you'll need a smaller budget and reach it faster - and you might even be able to plan for an extra week or two. Or - decide where to go later

However, given the current situation, it could make sense to delay deciding where to go - and by extension the booking process. Right now, we don't know which countries will have lifted restrictions by next year. That said, it's a good idea to have a short list of possible destinations - to keep you inspired.

Plan off-peak travel and book ahead

When the travel situation becomes clearer, you can think about booking. Flying in September is cheaper than in July; and booking an excursion ahead of time could well be cheaper than booking it when you arrive at your destination.

Create a savings plan

Say you want to take a holiday in 12 months' time and you need £3,000 for your trip. You'll need to squirrel away £250 each month to reach your goal.

Set up a separate savings account for holidays

It's best to keep your travel fund in a separate account, so it's harder to dip into for everyday purchases.

Cut back on non-essential purchases

This seems obvious, but being conscious of your everyday purchases could make a huge difference to your finances. Do you really need that new pair of shoes? Do you need to splash out on that restaurant meal when you could eat at home? Of course, you need to enjoy a treat now and again, but you might need to say goodbye to those spontaneous blow-outs. For example, spending £3 on coffee every working day adds up to £750 over a year.

Other cut-back tips:

• Delete direct debits for things you might not use very often (Netflix/Amazon Prime subscriptions etc).

• Choose own-brand foods instead of top brands.

• After food, heating, work travel costs and essential bills, remember that everything else is not necessary.

• Packed lunches: make your own lunches and avoid outside-bought sandwiches and coffees. £5 saved each working day might add up to £100 saved per month!

• If your children are entitled to free school meals, urge them to take up the offer (and remind them it will help the holiday fund!).

• Avoid debt: Any debts you take on should be carefully planned. But using a credit card to cover your monthly outgoings should sound a warning alarm.

As the Charles Dickens' character Mr Micawber stated:

'Annual income 20 pounds, annual expenditure 19 [pounds] 19 [shillings] and six [pence], result happiness. Annual income 20 pounds, annual expenditure 20 pounds ought and six, result misery. '

Check out the Demotivator Tool to help stop unnecessary spending

This Demotivator Tool from MoneySavingExpert shows just how much you might be wasting on unnecessary items. Give it a try!

Get the whole family on-board

If you're planning a family trip, get everyone involved in researching and planning your break. This will help energise each person to do their bit.

Get a part-time job

Easier said than done right now, but even a few hours' extra work per week could supercharge your holiday fund.

Ideas include: online teaching (many more kids globally cannot go to school due to Covid-19); Uber drivers; food delivery drivers; cooks and pot washers related to burgeoning takeaway-delivery industry.

For other jobs, take a look at the government's Occupation Shortage list.

Rewards/frequent flyer programs

Frequent flyer programs are only of real benefit when flying business class. But other shopping rewards programs could give you air miles. That said, the most important thing is to cut back on unnecessary spending, so rewards programs are only effective when buying essentials - i.e. only sign up for rewards programs for items you were going to buy anyway.

Get a Quote