Thursday, March 15, 2012

How to Avoid Overspending When Going on Holiday

It's guest post time, today thanks to Allan Jones:

The worst thing that we can do to mar the memories of our precious holidays is associating regret with it. One of the reasons for this can be overspending that may even cause you to regret your decision of going to the holiday in the first place. People make the mistake of overspending to the extent that they end up trying to pay off their debts till the next year when they should be planning another vacation.

There are certain ways to avoid overspending when going on a holiday:

Set Clear Goals

This is the most important strategy that is in tandem with the philosophy that if you don’t plan, then you are surely planning to fail.

Planning your holiday is extremely essential if you intend to make the most out of your holiday and avoid falling in the trap of overspending. Ideally, each and every step of your vacation should be planned; where you are going to go for vacation, for how long you will stay, how you will travel, how much accommodation will cost etc.

Make sure that you set clear and concise goals for your vacation in order to be effective with the planning process.

Set Your Limits

It is important to set limits on yourself if you want to stick to your targets and avoid overspending. This means that you should set a budget for everything. You should have a fair idea how much you are willing to spend on accommodation, shopping etc.

Shopping is especially critical as you have to buy souvenirs for yourself and gifts for your loved ones. Make a budget for the amount that you are going to spend on shopping and stick to it.

Don’t Over-extend Yourself

This is another crucial point that you should especially take care of. It is important to remember that giving gifts is a gesture of good will, not a sacrifice that you have to make. You shouldn’t spend more than you can afford.

It is better if you don’t incur any debt on your holidays. However, if for some reason you can’t avoid incurring debt, limit yourself to taking debt, to the extent, that you can pay off in a month.

Only Carry Cash

This is an extremely beneficial strategy albeit a difficult one. The best way to avoid debt is to refrain from using debit or credit cards during the holidays. This will help you to avoid the impulse of overspending altogether.

The trouble with plastic money is that it defers the payment of money and hence you end up making irrational decisions on impulse on the pretense that you will deal with it later. This can be extremely detrimental in the world of today where marketing has become extremely sophisticated and even the stores are built in a way to induce impulse shopping on the part of the customer. It is therefore prudent to avoid carrying such instruments that lead to overspending.

Carry solid cash when going for shopping in order to force a limit upon yourself and deal with impulses.

About the Author
Allan Jones has been offering tips on frugal living and money savings strategies. Allan likes reviewing savings accounts and financial products.

Photo: Pinkmouse

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