This year is certainly shaping up to be another tough one financially for many people. Some may feel in hindsight that they loosened the purse strings a little too much over Christmas and New Year, but don’t feel bad if you spent more than you planned – we all need to let loose now and again.
One of the key elements to budgeting successfully is accepting you need to spend money on occasional frivolities as well as day-to-day essentials. Keeping cash aside to have fun is as important as building a nest egg for emergencies.
One of the key expenses a lot of us think about at this time of year is a holiday, and even if some regard it as a luxury, I would say it’s an essential. We all need to have a break from work, a change of pace in a different place. It helps to keep us fresh and happy.
But if you are starting the year in debt then you shouldn’t rush to splash out on a luxury vacation while ignoring the need to tighten your money belt. If you fail to deal with your debt it will grow and the situation could quickly move from being manageable to being out of your control.
That would be a disaster. Being haunted by debt can be debilitating, and I know from experience that a holiday can be a nightmare if you can’t relax because of money worries.
So start planning for a holiday as early as you can, but do so in conjunction with a sensible budgeting plan which includes paying off any debt you have.
You may already be thinking that financial pressure should ease this year as the cost of energy is expected to come down a bit, but prices probably won’t return to the levels we were used to in previous years.
So careful budgeting will mean continuing to allocate a hefty sum for gas and electricity bills this year as well as all your other necessary expenses, such as mortgage or rent, food and travel, and so on. But you should also include any debt repayments in your budget plan.
It should be after you’ve sketched out a plan for the year that you work out how much you can afford for a holiday. It may well be necessary to cut back on holiday plans a little this year to keep your finances healthy. That could mean spending more time to research and shop around for the very best deal, reducing the number of days you go away for, or restricting travel to somewhere closer to home for example.
But staying in the UK doesn’t mean you will be looking forward to less of a good time. Anyone who has spent time in Devon, Cornwall, Wales, the Lake District, or plenty of other wonderful places in the UK knows that, weather willing, a British break can be as interesting and exciting as almost anywhere else, but often at a lower of the cost.
And it could well be worth exploring some of our island’s delights this year to help you more easily afford a dream overseas trip next year.
You could even stay at home for a staycation and spend your holidays taking trips to free local museums or parks, coastal or countryside walks, or even visit friends for a day or two for a fun change of scene. You don’t have to splash out loads to build up good memories.