What is the Best Way to Pay for my Holiday?

Most of us like to go on holiday from time to time. Some of us will look forward to our next holiday as soon as we have finished our last one and constantly be thinking about places we want to go. Some may just have one holiday a year and other may just take them when they feel like it and not have any sort of routine to it. Often the biggest influence on a holiday and when we take it, as well as where we go and what we do is the cost. Some holidays can be really expensive and others can be a lot cheaper. The cost will always be an issue as you will need to decide whether you want to have a holiday that you can easily afford (or wait until you can before you go) or whether you want to borrow money to pay for it. It is worth thinking about the pros and cons of the options so that you can decide which will be right for you.

Using Savings

If you have savings, then using for a holiday means that you will be able to go as soon as you wish and you will not have to pay the interest on a loan. This means that the holiday will be cheaper and you will not have to wait for it.

Some people do not like using savings though as they feel that they should be used to pay for emergencies rather than luxuries. The savings may also be for a specific purpose and the saver may be reluctant to use them for something else. It can be tricky to part with savings when you have worked so hard to save them up, particularly if you have them earmarked for something else. You may also worry about how you will afford your next holiday if you use up your savings to pay for this one.

Saving up

If you have no savings or do not want to use the ones that you have then you could save up for a holiday. This will also save you the expense of a loan. However, it will mean that you will have to wait to go on holiday until you have saved up enough money. If it is a cheap holiday, then it may not take you that long to save, but if it is something expensive, it may mean that you will need to wait a long time. Waiting can be good as you appreciate the holiday a lot more as you know how hard you had to work to get it. However, if you are in desperate need for a holiday then you may feel that it is just too long for you to have to wait.

Borrowing Money

If you are able to borrow the money for a holiday then you should be able to get the money right away and then go when you want. You will not have to wait to save up. You may also be able to raise your budget a bit and have a more expensive holiday because you can borrow more. Obviously, the amount that you can borrow will depend on your credit rating as well as how much you can afford to repay.

So, you can see that there are three main options for paying for a holiday are using savings, saving up and borrowing money. It can be a very personal choice which you use. However, the method that you use also has implications for the type of holiday that you can afford to take. You may only be able to afford a basic one if you use the money that you have saved or if you save up, but by borrowing, you might be able to afford something more. This may or may not be important to you. It all depends on what the purpose of the holiday is for you. It might be that you will be happy just getting away form home for a bit and a cheap campsite will be enough for you to experience that. However, you may prefer to go and explore other countries or to be really spoiled and have something luxurious and for that you may need to save up for a long time or borrow the money to be able to do it.  It is worth making sure that the method you choose will be right for you. If you get back and get stressed because you have no savings or because you have loan repayments, then this could counteract all of the relaxation that you experienced during the holiday. It is worth thinking about the effects that your decision may have on how you feel after the holiday as well as during it. Relaxing is great but if you have to be more stressed afterwards in order to experience relaxation then it is not worth it.