10 Common Holiday Budgeting Pitfalls to Avoid This Year

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The average American family spends $1,149 per family member on holidays each year. And that’s just for the annual vacation; it doesn’t count quick getaways, weekends and other short holidays through the year.That’s a lot of cash in anybody’s terms, so it’s no wonder that some people get themselves into a real financial bind at holiday time, leaving themselves dealing with the aftermath long after the sun tan has faded and the bragging rights are a distant memory. People report serious issues and anxiety about vacations, and so it isn’t surprising that many of us just decide not to take our vacation allowance, or to spend our holidays at home – the famous “staycation”.

But if you decide that you really must get away to the sun, the snow or an exotic city, how can you ensure that your annual holiday is a pleasure for the whole family, and not a serious and miserable financial drain which leaves you needing – well, a holiday? Here are ten common budget pitfalls that you should avoid if you want to ensure that your holiday doesn’t end up being a year-long financial nightmare.

1. Making the assumption that of course, the family must go away on holiday. Consider whether yes, you could enjoy a Staycation instead. Opting to stay at home and just chill out is fine, but it can be a less than exciting way to spend your precious relaxation time. So you could budget to do some fun things. Eat out for a whole week at restaurants much fancier than you would usually choose. Visit local places of interest and beauty spots – it’s surprising how many of us don’t really know our own area very well. Invest in something the entire family can enjoy – like a trampoline or a new pet. These options are much less expensive than a traditional vacation, and have the benefit of being of long lasting value.

2. Many people don’t even make a budget. You need to sit down and figure out what you can realistically afford to spend on a holiday, and how you are going to fund it. If you’re putting it on your credit card, or taking out a loan, add in the cost of the interest you are going to pay. Be honest with yourself; if it’s going to take six months to pay off, then don’t assume you can do it in two.

3. Failing to shop around. These days there are hundreds of online sites all vying to tell you that they have the cheapest air fares, hotels, and packages. Just because a site declares itself to be cheap, doesn’t mean it is. Spend time exploring options and price comparing; you can save a lot by doing this. Surprisingly, many of the best flight price options can be found right there on a well known airlines’ own site.

4. Aiming too high. Let’s say you want to go to the Caribbean. There are some fantastic all inclusive resorts to be found there, but make no mistake, they are expensive. Instead, do your research and investigate the charms of smaller, local owned hotels and guesthouses. You are going to get much more of a real travel experience that way, you leave more money in the local economy, and all at a fraction of the cost of those heavily advertised resorts. This applies to every country in the world; going with the big American owned chains is a luxury, not a necessity.

5. Forgetting that you have to pay taxes. To be fair, most vendors make it clear which taxes are included and which are not, but you can still be caught out. For example, some countries charge an arrival or departure tax, which may or may not be included in your airfare price or holiday price. Four of you facing a US$50 departure tax is an unexpected extra that you may not have budgeted for.

6. Baggage charges. Some of the lower cost airlines in particular are punishing when it comes to baggage. Make sure you factor this in when comparing air ticket costs, and make sure in any case that you travel as light as possible.

7. Overspending on holiday clothes. It really isn’t necessary to buy everything new, after all, you are going to be with new people who haven’t seen your old stuff! Holiday clothes generally don’t have much of a practical life once you get back home, and so you should save your money by using what you already have, or buying cheap local stuff when you arrive.

8. Not having a spending budget once you arrive at your destination. When you are on your third round of fruit filled cocktails with exotic names, it’s easy to lose your spending inhibitions. It’s a good idea to use your credit card just in case of emergency. Instead, get a supply of local cash (although US dollars work in many countries) which you keep in your hotel safe, and just take your daily allowance with you each day. This also saves on foreign exchange charges each time you use your card – which can seriously mount up.

9.  Number nine is using your cell phone when you are away without understanding the charges involved. Check with your carrier before you leave, to ensure that you have a cost effective roaming plan for your destination, and remember that in some instances you are going to be charged for incoming as well as outgoing calls. Most places these days will have internet service, so use email or Skype if you really do have to stay in touch with the folks back home.

10. Wasting money on trinkets that look great when you are on holiday, but will be consigned to the back of a closet in a few months’ time. That wooden sculpture of the god Eekawana looked fantastic in the cute little tucked away store by the beach, the one with the good looking, persuasive sales person. You will not like it so much when you get it home. Equally, it’s a good rule of thumb to remember that anything which has the name of the country you visited on it is going to look trashy on your mantelpiece. Good inexpensive mementos are usually t-shirts and local food items – although you need to remember that many foods are prohibited to be carried into the US, so stick to liqueurs, jams, hot sauces and the like.
Follow these tips, stick to your budget, and your holiday will be an all year benefit to you, with happy memories, not continuing headaches.

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