Saving for a holiday 3

This is the third in our series on how to save for a holiday.

If you missed the first two parts in this series, you can read them here. Saving for a holiday part 1 covers planning when and for how long you are going on holidays.

Saving for a holiday part 2 covers planning where you are going on your holiday.

Now we can tackle the tricky area of how much is this holiday going to cost now in part 3.

To make the most of your holiday and allow you to truly enjoy every moment it will pay to work out a plan of how much this holiday is going to cost now before you go minimising any chance you'll end up relying on debt.

Planning now will allow you to set your savings goals and get started on putting away enough money for your holiday. Now that you know roughly when you are going and have some ideas of where you want to go, start getting some quotes on airfares, work out cost of fuel if it will be a driving holiday and start researching how much accommodation is going to cost you.

Back to the travel agent and onto the internet to find out some information on the costs you are likely to incur here. Look at every travel and accommodation website you can find to get an idea of costs involved in the big ticket items of getting there and where to stay. Don't forget that campsites often have cabins that can be in a great location at a much more reasonable price than hotels.

In no time at all you'll start seeing a pattern as to how much accommodation costs at your destination and for any stopovers you need on the way to your final destination.

Make a list of how many nights away you have and roughly where each of these will be. Then write down next to each of these the cost of your accommodation per night singularly and a total for each location.

Next work out how much you will need roughly for food. How many meals needed in each place and how much you need to allow for each meal. Again have a singular cost and a total for each location.

If you are travelling overseas, you might need to start with some currency conversion to get an idea of how much money you need to allow for food. When travelling overseas I have found it easier set a daily maximum limit on food. This allows me to then splash out on some meals and find cheaper alternatives for lunch and breakfast and still stick within my allocated funds for the day.

Ask around to see if any friends or friends of friends have recently (within the last two years) been to your holiday destination and see what tips they can provide on accommodation, food and what to see or do. Travellers are usually quite happy to pass on any tidbits to help you out.

In Italy we wanted to visit some of the big museums and galleries but the queues were massive. We found that for 3 euro we could prebook our ticket with at a set time that allowed us to jump the queue. The 3 euro was definitely worth skipping the 2+ hour waits as it gave us more time which can become a precious commodity when travelling overseas.

So you've got a list of what expenses you will have like sleeping and food. Now to allocate some funds for travelling. Will you be hiring a car, using public transport? What deals can you find to save some cash and add these costs to your list.

Next you need to allocate funds for all the things you want to see and do. If you can find out entry fees for any particular sights, the internet is really helpful here. Add these costs to your list as well.

The list is probably getting quite long now but you also need to factor in general spending money, for when you find something you want to do but just can't plan for and there is always things like this that will crop up. Also what if you find a great souvenir you just have to have, you'll need funds for this as well.

Once the basics like accommodation, food and getting around are taken care of, you'll need to set yourself some unallocated funds for these one offs that can truly make a holiday. I like to set myself a daily limit for these allowing me to allocate any unused funds to the next day if needed.

Once you've got this list happening with costs, as scary as it might be you will need to add it up. How much money do you need for this trip? How much do you need to save each payday between now and when you leave to make sure you have the funds available.

If travelling overseas you'll need to start doing some currency conversion as your list is likely to be in the currency of your destination. Most big banks and travelex will show you exchange rates to help you get started with easy conversion tools on their sites.

If the amount looks too scary don't panic. You've got time now to look into alternatives for your accommodation and local travel to see whether you can save a few dollars here. If you're travelling alone is backpackers an option you will consider? If travelling with friends, is camping an option? Start searching the web to see what you can find, you might be surprised.

If the costs look like your first option might not be possible this next holiday, start costing out option 2 to see if that is where you'll be going. This is why in part 2 of saving for a holiday I asked you to list the places you wanted to go. Just move on to the next favourite destination you listed and see if it is more affordable this time around. You can then work out a better time to visit destination one, maybe in the off season or next year, funds permitting.

If you've got any tips to help our readers with costing their holidays, please feel free to add them as a comment.