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Top tips for saving for a holiday

Starfish on the beach

Today is World Tourism Day so it’s the perfect opportunity to think about saving for a holiday and how your travel funds could be fast-tracked with some clever financial focus.

With overseas destinations and accommodation now offering greater affordability on the back of the strong Australian dollar, using your money wisely could also see you get more for your money when it comes to holiday savings.

So how can you use your income wisely without sacrificing your day-to-day living quality while still accumulating holiday savings?

Credit card repayments as financial returns

Think of any repayment you make on your credit card as interest earned. If you have ever been behind on repayments, you may have paid interest of 20 per cent or more, which would hinder good savings practices. The first step for any holiday savings is to get those plastic payments up to date. Saving 20 per cent interest is also a 20 per cent return on your money – a wise investment in any instance.

High interest savings accounts

Once your plastic is up to date, your holiday funds will benefit from better interest rates in high interest savings accounts. Switch your focus from saving on credit interest to accumulating interest on your own savings.

Australians love to travel abroad, yet we lose between $3 billion and $4 billion each year by keeping savings in the wrong type of savings accounts. You can claim your own piece of this lost interest with RaboDirect offering special variable rates of up to 5.71 per cent.

Book in advance

Nothing will get you primed for saving for a holiday like making initial bookings. You may save money by getting in early and leaving yourself with more reason to channel savings into high interest accounts.

Split your savings

Channel your income to better help you meet holiday goals by automatically directing funds into separate accounts. Make sure you have enough money in credit cards and transaction accounts to pay those inevitable bills while any money for holiday savings can quickly accumulate with higher interest rates.

Save money while on holiday

The same money-saving tips apply overseas as they do with everyday purchases. Check to make sure you aren’t paying top dollar for holidaying during public holidays at your destination. Also, choose a cheaper destination to get more mileage from your holiday savings.

Special offers

If you are planning a holiday with help from high interest savings accounts, you should still be able to access your funds to take advantage of special deals. Sign up for group buying and coupon offers for your holiday destination.

Holiday savings plans shouldn’t mean going without essentials, and spoiling yourself can make more sense when you have both savvy savings ideas and high interest on your side.