With the holiday season in full swing Britain’s youth are spending big abroad. As the Med swarms with students celebrating A-level results and university students making the most of the long summer break Euros are exchanging hands left, right and centre. The only thing is that much of the cash being spent has been borrowed. A MoneyExpert survey showed that 1.2 million of us are relying on handouts from family and friends to pay their way in the sun. As a result MoneyExpert has some tips for young people planning a spell abroad.
MoneyExpert’s survey showed that it was 18 to 24 year olds who were most likely to end up borrowing money. You wouldn’t think a week lying on the beach could come to too much but parents could be left feeling like they’ve come down with a bout of sun stroke themselves when they find out their young ones are after hundreds of pounds.
If you’re likely to be borrowing from your relatives or if you’re a cash strapped parent there are a couple of things you can do or advice you can impart to make sure the holiday money goes as far as possible and that budgeting is taken into consideration.
If you know you’re likely to be going away with friends over the summer open up a savers account or ISA and put something away each month over the winter.
Savings accounts generally offer rates of about 4% over a year, but more importantly if the cash has moved out of your current account you’re far less likely to end up spending it.
MoneyExpert recommends Citibank’s Flexible Saver. With interest of 6.1% you may even make a bit of money on your savings if you start putting it away early enough and if you’re into online banking this will be right up your street.
A mini-cash ISA allows you to save £3000 tax free. While you’re unlikely to need this much cash just for summer spending, with average rates of around 5% you could see your money grow over just a few months. MoneyExpert suggest the Yorkshire Building Society E-ISA as a good bet. You’ll be saving at 6.05% and once again the online aspect of the account could be handy.
With both types of account you’ll be able to set up standing order so that you don’t forget to pay in!
Savings accounts are all very well but if you’re only a week or two away from getting on the plane then they might not be much use. There are still things you can do however to make sure you make the most of your money.
Travellers’ cheques are perhaps the easiest way to budget whilst on holiday as when you run out and have to cash a new one you’ll have a record of just how much you’ve spent. Also taking cash you’ve exchanged in advance in the UK at a zero per cent commission exchange could save you money, but then there’s always the temptation just to spend it!
You’re probably going to want to bring your debit and credit cards with you too though as in EU you’re not likely to be far from a cash machine or a restaurant which takes cards. It’s not a great idea to rely on these however as the charges incurred will mean you get a lot less for your money. With drawing £100 from a foreign cash machine on your debit card will cost you almost £4 in charges. The same goes for credit cards, £100 will cost around £2.75.
These travel cash tips could save you a bit of cash but at the end of the day whether you have enough cash to last the holiday is going to come to whether or not you set yourself a reasonable budget.
If you’re likely to be going out at night or know that you’re going to have to pay for an day trip or tour be sure only to carry as much cash as you need and perhaps take your cards for extra reassurance.
Remember the cash might look like monopoly money, but at the end of the day someone is going to have pick up the bill. Do you parents a favour and plan ahead.
- Set up a cash ISA ready for next years holiday
- Apply for a 0% balance transfer card and switch your holiday costs to a 0% deal
- Get a 0% purchase credit card for interest free shopping – well for the introductory period anyway!