4 Ways You Can Finance Your Family Holiday

family holiday
Family Holiday in Dumaguete City

The prospect of a family holiday is exciting – no matter what your age. Whether you are planning on vacationing in your home country or traveling further afield, there are certain things that you need to organize before you travel.

And one of these crucial steps is deciding how you will finance your family holiday – unless you’re a millionaire, unfortunately you need to bring this into the equation! The kids will get excited about the prospect of going away. So you want to know that you have the funds in place in order to enjoy the time away together.

Throughout the year, all families have various living costs. So sometimes it might be difficult to know how to pay for your family holiday. To make the process a little easier, here are four of the main ways that you can finance your trip, no matter how big or small it is!

Use Your Savings 
This may be easier said than done, but if you have a good amount of savings you can put some of them towards your family holiday. By cutting back on different things throughout the year you might be able to accumulate some cash for your family holiday.

Now, this doesn’t mean that you need to cut out every social activity, but by limiting the number of things you do throughout the year or finding cheaper alternatives, you will have more money to spend on a getaway.

Cheaper alternatives don’t need to be dull. You can have fun with your family for no money at all. Whether it be through planning movie nights, game nights or heading out into town to the park, there are ways in which you can enjoy each other’s company without it costing you the world – and it will be more than worth it in the long run.

With savings, although it can be scary to think that you have spent some of them on a holiday, you need to have the mindset that you can earn that money back. Having said that, if you don’t have a high income, it’s not a sensible idea to spend all of your savings on a holiday.

You should only spend money that you don’t necessarily need – so you want to budget out how much you can realistically spend before splashing out. By taking a look at your finances and your monthly living costs, it will become clear how much you can spend.

Using your savings is perhaps your best option – as it means that you won’t have to pay any money back to brokers. Putting you in control of the amount you spend, you will know what you can and can’t do whilst on holiday (as well as how much you can spend on the holiday itself). But if this isn’t viable, maybe one of the following suggestions will work better for your family.

Use a 0% Credit Card
By using a 0% purchase credit card, you will be able to spread the cost of your holiday over a set amount of months without having to worry about paying any interest. This is a good option for families, as it will allow you to pay a little amount each month until it’s paid off completely.

Not only do zero interest credit cards work with your monthly budget, but they also can come with a free payment protection benefit. This means that if anything might happen (e.g. the hotel you were supposed to stay in goes bust) you are covered. Certain credit card companies will also offer additional perks on top of this, including cashback and rewards.

With all credit cards, however, it’s important that you read the small print before putting all of the holiday costs onto it. Also, certain credit cards will have a high APR, therefore the monthly repayments could be higher. Any missed payments can also damage your credit score, so it’s vital that you keep up with the repayments each month.

Use A Holiday Loan 
Many families across the world are opting for holiday loans. A useful option which allows you to access funds almost immediately, it can be used for staycations or holidays abroad. An unsecured loan, they generally allow you to borrow up to $15,000 – but this will vary depending on the bank that you borrow from.

There are many benefits that come with acquiring a holiday loan, including the fact that you can make fixed payments, you can choose your term and you can take a payment holiday (which gives you a couple of months off after your holiday before you have to repay the loan).

However, alongside the benefits, it’s essential to remember the downsides that come with holiday loans:

  • If you have a poor credit history, you might not be able to access high-quality holiday loans. This could mean that you will have to pay higher interest rates or that you are limited to the amount you can borrow. 

As with all loans, a holiday loan will also come with certain risks. You could be charged for any late payments (which would damage your credit score) and you will find yourself in debt – which isn’t ideal when you have a family to provide for.

How much do they cost?

This will vary on a few factors, including:

  • What the interest rate is: which varies loan to loan
  • If there are any fees attached to the holiday loan (e.g. early repayment)
  • How long the loan is for
  • What your credit rating is

Acquire a Guarantor Loan
A type of unsecured loan, a guarantor loan involves you nominating a family member or friend who will take on the repayments if you’re unable to. You don’t want to find yourself in a difficult financial situation, but if you do, the security that a guarantor loan brings might make it seem more tempting than other financing options.

There are many guarantor loans out there for you to choose from. Each varying on what they offer, you must compare and contrast before agreeing to one.

Depending on which one you go for, you can enjoy the following benefits:
  • The flexibility of repayments: in which you can decide how much you repay each month. 
  • Payment holidays (as mentioned above)
  • Flexible borrowing amounts: an example of which being the guarantor loan from Buddy Loans which allows you to borrow up to $12,000.

Things To Consider:
  • The interest rate that comes with the loan
  • The term in which you have to repay
  • Whether the repayment is fixed or variable
  • The amount you need to borrow

Financing Difference Aspects
An alternative is doing a combination of a loan and savings. If you find that you have enough savings to cover, say, your flights then you can use a loan to pay for the accommodation. By splitting it in this way, it will lower the initial amount of money that you have to outlay. Although it can make the financing process a little harder - so shouldn’t be taken lightly.

When booking a holiday (if you’re going abroad) you will need to consider the price of flights, accommodation and your spending money. As this can vary hugely by destination, you need to consider the overall cost of the holiday before you go – and which payment method you will use for each element.

Even if you plan a staycation, you will need to consider spending money and accommodation. Even if this isn’t as much as a holiday abroad, it’s a good idea to budget out your outgoings before you start to plan the trip away.

Final Thoughts
No matter how you are planning to finance your holiday, you need to plan in advance how much things will cost. Many families are prone to overspending – so to avoid having to make high repayments or spending too much of your savings, sit down and look at how much different aspects of the holiday will cost. By not getting carried away, you will have less financial implications in the long term.

The way that you finance your holiday will, of course, depend on your specific financial situation. If you have the savings, it’s advisable that you use some of these to pay for it. But if you don’t have the immediate cash flow to finance your holiday, then a loan might be your best bet.

With any loan, you need to know what the implications are by reading the terms and conditions of each one. Even though it seems like a quick fix, a loan does come with some downsides – so make sure you are aware of these.

However you finance your holiday, remember – have fun! Whether you are planning on going to Disney World or heading to the local camping park, it will create everlasting memories that will last forever. So even though the prospect of financing seems scary, if you are sensible and it’s done correctly, you can go on your holiday without panicking about your finances afterwards.

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