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Shopping around for a bargain holiday for the family is imperative when money is tight. But with forward planning, one may be able to afford a luxury family break.

Finding a great holiday deal would be in vain if the money is placed onto a high interest loan or credit card bill. Careful money management and working out a family budget is the key to financing a family holiday without feeling the pinch, be it an all-inclusive family holiday, an activity holiday or a cheap family break.

A great way of saving money for a family holiday is to spend only what is available. This may be difficult during expensive times of the year such as Christmas when large credit card debts are most likely. Preventing bank charges, late payments and unnecessary borrowing fees will immediately slice costs.

Cheap Credit Cards

But if the budgeter cannot avoid borrowing money to pay for a holiday, using 0% balance transfer credit cards, such as Virgin credit card or platinum credit cards from NatWest, HSBC or similar can save money so long as the account holder avoids putting purchases on them and pays the balance in full.

The cardholder must remember that when the term expires, borrowing rates resume and the customer could accrue unexpected costs, which could eat away into the holiday budget. Unless the customer is vigilant in this respect, it might be wise to avoid credit cards altogether and saving money in another way.

How to Manage Money with the Best Savings Accounts

Depositing money into a high interest savings account is a great way of saving for a family holiday.

A cash ISA offers competitive interest rates tax free and it is instant access for when payment for the holiday is due. If the account is full, special regular savings accounts offer good saving rates so long as the account holder regularly deposits money into it. A standing order is the best way.

Working out how much can be deposited into the savings account requires working out the family disposable income first. This can be done in simple steps by the following:

How to Save Money for the Summer Holidays by Household Budgeting

Ensure that all benefits are claimed. Directgov has an online benefits adviser, which calculates via questionnaire whether someone is entitled to certain benefits and tax creditsEnsure that money can be saved in other avenues such as house insurance, mortgage protection or by using energy saving appliances.Money can be made in another way, such as working a few extra hours a week or selling items on Ebay

With these taken into account, working out a monthly family budget is the next step. This entails:

Family income: Adding wages after tax with benefits and interest from savings over the year.Family expenditure: Adding all the annual household bills and expenses over the year. (Leaving no stone unturned is important)Monthly disposable income: Deducting the expenditure from the income and dividing into twelve

Watch out for any large one-off bills such as the MOT or household repairs that may need catering for. Making further provisions for (realistic) non-essentials such as nights out will ensure the final figure can be adhered to.

Household Budgeting to Finance a Family Holiday

The final figure may be deposited into a high interest savings account via a standing order, where it may earn healthy interest throughout the year for the family holidays. It is a good idea to keep checking whether the savings account retains its competitive interest rates and to switch savers if this seems to wane after the first year.

Budgeting for a Family Holiday Breaks

Avoidance of credit cards, making savings on household bills, claiming all benefits and making deposits into a high interest savings account will have a surprising effect upon the holiday budget. Spending only what is available and looking for opportunities to make extra money is a great way of saving money for a great family holiday without the purse feeling the pinch.

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