With all the doom and gloom out there at the minute, it is important to stay positive. It is true that savings accounts rates are fluctuating and it is more difficult to obtain tax-free returns on ISAs, but there are a few clever tips you could follow to bring you one step closer to that dream holiday.
One of the most important things to remember when it comes to looking after your savings is to compare savings accounts offered by the leading high street banks and other finance providers. Do not let your search for the best savings accounts rates or savings bonds stop in a bank branch however, as some of the best deals to be found are exclusively online.
Although it may take up some of your time and it will require some effort, finding the best savings rates could mean the difference between being able to afford that sailing holiday this year or having to spend the summer looking out of a caravan in drizzly Scotland. If you do the hard work now to track down the best ISAs and other accounts, you can simply sit back and watch your money work for you.
Some banks offer deals that are not advertised in their branches, so unless you have a look online you may not know about the more competitive rates.
Follow these tips to make your holiday dreams become a reality:
- There are times when money is tight, and the idea of a holiday is just not a possibility when there are bills to pay. If this sounds like your current situation, accept you will not be able to afford to go anywhere this year but then take action. Start planning for a break that is a year or few months away so as to give you enough time to actually save up.
- When thinking about how much you need to save, choose a specific holiday destination. A lot of travel companies offer you the option to pay in instalments for your holidays, but if you save the money in a fixed rate ISA or invest it in Bonds, you could end up getting more money back in interest fees than what you would originally pay for the holiday. Spending money, anyone?
- If you do not have a holiday destination in mind but know you want to go away somewhere, keep your savings in an instant access account. This means if you suddenly come across a great deal online or have some holiday days to use up from work before the end of the year, you will have instant access to your cash. With this type of account you will still accumulate some interest too; just not as much as you would in, say, a fixed rate account.
- Although it may seem like a good idea to pay for a holiday on credit using a card or a loan, you may end up having to pay more money back with added interest costs. Let's face it - everyone feels like a holiday every now and again, especially after a stressful day at work, but throwing the credit card at your problems is not the answer. There is no other feeling like saving up for something and having the satisfaction of knowing you really worked for that holiday. Of course, you also have the added bonus of knowing that when you return, you will not have to worry about forking out for a massive credit card bill every month.
- By saving for a holiday by using an ISA, for example, you will get tax-free interest added to what you invest. Even if you end up deciding you do not want to use the money for a holiday, you will always have the option of using it for something else. At the end of the financial year, there is always the option of transferring your ISA money to another account to ensure you don't lose any of the added tax-free interest.
- When thinking about saving for a holiday, always consider added costs such as insurance, transport to and from the airport and the most important thing: spending money. Do not go to the effort of saving for a holiday only to use credit cards to pay for your meals and daily costs. When it comes to saving, think of the whole picture to avoid additional or hidden costs.
