SMART MONEY SERIES:
When going for holidays, whether at home or abroad, it pays to plan ahead so that you don't end up spending unnecessarily.
LOOKING forward to holidays? Aren't we all. To have a decent break from the daily routine (not to mention work pressure!) is just heavenly, even if it is temporary.
Hopefully, the laptop doesn't have to come along!
Before you take off to your dream holiday, have you planned ahead? Sure, you plan to do some sightseeing, relaxing, sport, dining and shopping.
More importantly, it is advisable to plan your spending. Before you overindulge on your holiday, remember, you will have to come back to reality and pay off the “goodies” bill.
Here are some tips to be SMART about holiday spending:
1. Have a holiday budget
A holiday budget should already be part of your annual budget. This is advisable so that you don't spend two months' salary on just your holiday and starve for the rest of the year. Your best guide is reviewing your last holiday expenses. If you've lost the records, do the next best thing – estimate. List out items you're most likely to spend on during the holiday - travel, accommodation, food, sightseeing, and, of course, shopping.
2. Plan your shopping
Whether you realise this or not, when you're travelling out of town or overseas, everything you see on retail is a “must have” – with justifications such as “you won't find this back home” (really?) or “it's definitely a lot cheaper here than back home”. Controlling your whims during these worry-less times takes a lot of willpower. What helps is having a list of things you intend to buy so that you don't go overboard. If you already know what you're looking for you can do some research, compare prices and get your items at the best bargains. Without any planning, you may end up buying an additional suitcase just to fit those new purchases. And, oops? end up paying for excess baggage as well!
3. Use your credit card wisely
It's so convenient to just swipe away and worry about the bill later. Beware! Your credit card is usually the source of major debt problems. To use it wisely, have a self-check mechanism – record every purchase via the card and have a running tally so that you don't go over your planned limit. When you return and are refreshed from Happyland, don't procrastinate in paying off your debt. If you can't settle the debt early, you could strategise to have them all paid off within, say, three months. If you can't seem to control your swiping, resort to spending in good-old cash.
4. Teach your children the value of money
This is probably a tough one for most parents, but you must agree that a substantial proportion of cash outflow is usually to please your children's unwavering demands, and you do want to keep them happy while you're on holiday. Hence, if your children understand why you can only spend X amount on toys, you'll ease any disappointment.
5. Plan your gifts
It would be very generous of you, indeed, to bring back souvenirs for friends and family. However, make sure you're not buying under pressure. Set realistic expectations. There is no need to prove your success to anyone: all you're really doing is having a well-deserved break – you didn't strike gold, you know! You could make a list of gift recipients e.g. loved ones, close friends. Jot down gift ideas and the estimated amount you wish to spend for each of them. Knowing what and how much would make you less prone to impulse shopping.
6. Plan holidays ahead
A post mortem of your spending on return from your vacation is critical. Where did you overspend and why? So you overspent on the gifts - perhaps your budget for gifts need to be increased next time, or perhaps you just need to spend less on gifts. Your office colleagues would probably be just as happy toshare duty-free chocolates instead of T-shirts. It’s the thought that counts!
With early research, you can be sure to catch the best deals for the next holiday season. Procrastinators will lose out on bargain air fair prices and/or room availability during hotel promotions. Once your next holiday is budgeted for, you can start saving early.
7. Future cash flow
Saving money and minding your spending shouldn't just be a priority around the holidays. It should be an every day habit, but take care of the fundamentals first – paying off credit card balances or debts and saving for education or your retirement. It is also recommended to have an emergency fund worth three to six months' living expenses in a cash account, in case of that rainy day.
There you have it – seven habits of a highly-effective holidaymaker that you can adopt immediately. You can now go on that holiday with peace of mind and ensure that you won't spend money you don't have.
Before you plan the next holiday, here's another self-check: are you still paying off last holiday's bills?
You have been warned.
Source: AKPK
LOOKING forward to holidays? Aren't we all. To have a decent break from the daily routine (not to mention work pressure!) is just heavenly, even if it is temporary.Hopefully, the laptop doesn't have to come along!
Before you take off to your dream holiday, have you planned ahead? Sure, you plan to do some sightseeing, relaxing, sport, dining and shopping.
More importantly, it is advisable to plan your spending. Before you overindulge on your holiday, remember, you will have to come back to reality and pay off the “goodies” bill.
Here are some tips to be SMART about holiday spending:
1. Have a holiday budget
A holiday budget should already be part of your annual budget. This is advisable so that you don't spend two months' salary on just your holiday and starve for the rest of the year. Your best guide is reviewing your last holiday expenses. If you've lost the records, do the next best thing – estimate. List out items you're most likely to spend on during the holiday - travel, accommodation, food, sightseeing, and, of course, shopping.
2. Plan your shopping
Whether you realise this or not, when you're travelling out of town or overseas, everything you see on retail is a “must have” – with justifications such as “you won't find this back home” (really?) or “it's definitely a lot cheaper here than back home”. Controlling your whims during these worry-less times takes a lot of willpower. What helps is having a list of things you intend to buy so that you don't go overboard. If you already know what you're looking for you can do some research, compare prices and get your items at the best bargains. Without any planning, you may end up buying an additional suitcase just to fit those new purchases. And, oops? end up paying for excess baggage as well!
3. Use your credit card wisely
It's so convenient to just swipe away and worry about the bill later. Beware! Your credit card is usually the source of major debt problems. To use it wisely, have a self-check mechanism – record every purchase via the card and have a running tally so that you don't go over your planned limit. When you return and are refreshed from Happyland, don't procrastinate in paying off your debt. If you can't settle the debt early, you could strategise to have them all paid off within, say, three months. If you can't seem to control your swiping, resort to spending in good-old cash.
4. Teach your children the value of money
This is probably a tough one for most parents, but you must agree that a substantial proportion of cash outflow is usually to please your children's unwavering demands, and you do want to keep them happy while you're on holiday. Hence, if your children understand why you can only spend X amount on toys, you'll ease any disappointment.
5. Plan your gifts
It would be very generous of you, indeed, to bring back souvenirs for friends and family. However, make sure you're not buying under pressure. Set realistic expectations. There is no need to prove your success to anyone: all you're really doing is having a well-deserved break – you didn't strike gold, you know! You could make a list of gift recipients e.g. loved ones, close friends. Jot down gift ideas and the estimated amount you wish to spend for each of them. Knowing what and how much would make you less prone to impulse shopping.
6. Plan holidays ahead
A post mortem of your spending on return from your vacation is critical. Where did you overspend and why? So you overspent on the gifts - perhaps your budget for gifts need to be increased next time, or perhaps you just need to spend less on gifts. Your office colleagues would probably be just as happy toshare duty-free chocolates instead of T-shirts. It’s the thought that counts!
With early research, you can be sure to catch the best deals for the next holiday season. Procrastinators will lose out on bargain air fair prices and/or room availability during hotel promotions. Once your next holiday is budgeted for, you can start saving early.
7. Future cash flow
Saving money and minding your spending shouldn't just be a priority around the holidays. It should be an every day habit, but take care of the fundamentals first – paying off credit card balances or debts and saving for education or your retirement. It is also recommended to have an emergency fund worth three to six months' living expenses in a cash account, in case of that rainy day.
There you have it – seven habits of a highly-effective holidaymaker that you can adopt immediately. You can now go on that holiday with peace of mind and ensure that you won't spend money you don't have.
Before you plan the next holiday, here's another self-check: are you still paying off last holiday's bills?
You have been warned.
Source: AKPK
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