How to save money for a trip

Exploring the world, experiencing different cultures and spending time with your loved ones on holiday can be one of the most enriching things in life, but it can also be one of the most expensive. If you’re wondering how to save money for travel, fear not, we have the low-down. 

For starters, if you can, it’s normally a good idea to save up, rather than borrow money, for your holiday. And it can also pay to use cash. Check out our nifty travel hacks and tips for how to save money for a trip away. With the right planning, you can get the break you deserve and still come home financially relaxed.

How much to save for travelling at home or abroad

Knowing how much money to save for travel helps you make a holiday budget that will give you guidance on your savings goal and help you focus on that target. It’s easier saving for a trip if you start with a rough total cost for your travel, accommodation and spending money. 

To create your holiday budget, start by listing all of your outgoings. You might already know your flights and accommodation, but also give yourself a reasonable daily spend for food, drinks and entertainment. Remember, your daily spending is likely to be more than at home as you may be eating out more frequently. 

Budget for things like:

• Flights, transport, car hire and/or fuel
• Accommodation (hotels, hostels,  Airbnbs)
• Daily spending for food, drink and entertainment
• Holiday clothes, accessories and essentials (like sunscreen)
• Travel insurance
• Contingency money (around 10-20% of your total budget) 

If you’re not sure how much money to save for travel, approximately 5% of your annual salary (after tax) could be a good start. If you earn £33,000 per year, 5% of your post-tax income would be about £1,300. This is a decent holiday budget for a fortnight but you could add more or shave some off depending on your situation. If you have a partner, you might also like to include their income.

So, what does that look like for your saving-for-a-trip plan? Well, assuming you’re starting from zero savings, if you put £100 to one side every month for a year you’d be in a solid place. Of course, you can save more if you can afford it, but remember that keeping your budget realistic will help you to stay motivated.

Save money for travel by shopping the best deals

One of the best ways to save money for a trip is to shop around. If you can get a deal on the booking, you can make your money travel further while you’re away. Here are some things to consider when you start holiday hunting:

1. Compare prices and set alerts

Exploring comparison sites like Skyscanner, Expedia and Trivago can be a creative way to save money for travel .  Building a holiday with your budget front-of-mind — instead of starting with a dream destination and then trying to find the money — can be helpful.

The best deals come and go quickly, so you might want to set alerts and have your money ready to go. Select your ideal dates and destinations and let the algorithms do the hard work for you. Don’t be afraid to start looking six months before you leave — booking early is a great way to secure great offers so give yourself a head start by keeping an eye on those flights. 

2. Be flexible on dates, destinations and accommodation

The best way to save for travel is to be flexible. This might mean compromising on things like when you go on holiday, how you get there, and where you stay. Be prepared to switch up your plans at the last minute if it means lightening the load on your pocket. Plus, you never know what adventures you might find yourself on when you keep an open mind.

Booking a holiday outside of the peak seasons can be a big saving for a trip. If you’re able to, consider going abroad during the school term. Some accommodation and transport providers will offer better prices to encourage people to use their services at quieter times, so use that to maximise your holiday budget.

Another way you could save on your accommodation costs is by looking beyond the obvious hotel options. Dig a little deeper into Airbnb or Booking.com for quirky rooms, or search local hostels and holiday rentals. You could find a less expensive — but maybe more unique — place to stay while you’re away. 

It’s not just the type of place you stay in where you can make savings. You could look at accommodation slightly further out of city centres or even in the next town over. You are likely to pay a premium for the convenience of being right in the middle of the action, but sometimes there are some more low-key gems further afield. Check out the public transport options or look into bike or car hire in the area and you might find it works out cheaper overall.

You can save on when and where you go, but you also have options to reduce your holiday budget by shortening your stay. Would a long weekend in a more expensive location suit you as well as a fortnight on a budget? It’s easier to make these decisions once you have your holiday budget clear in your mind.

If you’re lucky, sometimes leaving it until the last minute can score you some absolute steals. As long as you’re able to get organised quickly (which might be easier for couples or mates than families), you could benefit from cheap deals for unsold hotels and flights on travel websites.

3. Don’t pack the kitchen sink

A lot of budget airlines make a big chunk of their money from luggage fees but, if you can streamline what you take with you, it’s possible to minimise the cost of your flights. It can be tricky to decide what is essential when you’re packing for holiday but get creative. Stay below the luggage restrictions by packing a mix-and-match wardrobe or by wearing your biggest items on the plane. You’ll be laughing all the way to your seat. 

4. Consider package deals

Another option for how to save on travel expenses is to go all-inclusive. You won't necessarily be able to save lots but you might be able to get more bang for your buck. It can  be easier to stick to your budget since you know that the majority of what you need is already covered and paid for. Some all-inclusives might include everything from  flights and accommodation to food and drink.

Having your meals included is a great way to reduce your spending on restaurants. If your accommodation serves a decent breakfast, start your day by filling up to save you from spending on bites and treats throughout the day which can easily eat into your budget.

5. Using holiday money

Heading abroad without a plan for how you will actually pay for things could be very costly as you can get hit with fees and exchange rates. Take some time to make a plan and stick to it.

Exchanging your travel cash before you leave for another country could be a wise choice as well. You might find that changing your money at the airport or once you’re at your destination is a great deal more expensive. If you keep your eyes peeled, rates may turn in your favour and  you could benefit from buying at the right time at home.

Using debit cards for your day-to-day spending while you’re abroad can be convenient but it can also quickly add up if you’re paying for transaction fees every time. So try to use cash where possible. Using cash can also help you to budget your spending as you can physically see the notes lessening as you spend.

6. Protect yourself with travel insurance

It might not be the most exciting part of your break, but make sure to get travel insurance. You won’t save money by doing this, but you could save yourself a headache. And it can protect you from unfortunate and unseen costs if things go wrong.

Ways to save money for a trip

This guide looks at different holiday money saving tips at home or abroad. As you might be able to tell, there are loads of ways to do this but generally, one of the simplest ways to save for travel is to start early. The sooner you put your plan into action the longer you will have to make contributions to your holiday savings pot, which means you will only need small, manageable deposits.

Find a plan that works for you

One piece of advice for how to save up for travel is to find a savings plan that makes sense for you and your circumstances and income. We’re all different, so there isn’t a one-size-fits-all solution. But even small changes add up over time. You could start with cash if you often have it handy, but at some point you may want to get it somewhere a little safer than your piggy bank. Putting your money into the bank is a good idea as you can keep it safe and set up your automated payments. 

Automate your savings

Use automatic payments to make payments towards your savings goal as close to payday as possible. That way you can remove the temptation to spend your money on anything else and stay focused on your holiday target. 

By joining Loqbox, you can grow your credit score while you save for your travels. Set a goal for your dream holiday and as you contribute, we’ll report your payments to the UK’s main credit reference agencies. This can not only help you boost your credit score but can keep you on track for your savings goal. 

Improvements to your credit score are not guaranteed.

Earn interest with savings accounts

If you want to earn interest on your savings, and add more money to the pot from the bank, it could be a good idea to find a regular savings account or an Individual Savings Account (ISA). These accounts will give you varying degrees of returns, normally depending on how much access you need to the money. Instant access will often mean higher interest rates.