As the end of the year approaches, holidays are on everybody’s minds.
While some are planning their ultimate getaway, you might be wondering how you can make the most of the great weather on a limited budget.
You save and you save, but somehow, you never quite have enough to take that break.
Don’t panic, you can still have that holiday you are dreaming of. You just need to put a bit of planning into it.
Let’s look at, the benefits of jumping in and taking that holiday break, how you can make it work for your budget, and what your options could be for borrowing.
Taking A Holiday Is Necessary
Life can be so fast paced and busy. There is always something to think about, somewhere to be, or things that need to be done. A holiday is an essential break from all of that. Forget about the worries, the responsibilities and the stress. Just unwind, recharge and refresh yourself.
You can also use the break to reconnect with your family and friends. Enjoy each other’s company without the distractions of home getting in the way.
Holidays can get you through the tough times. When you are stressed, rundown and ready to quit, a holiday can be a bright spot on the horizon, something amazing to look forward to and keep you going.
Not only that, but holidays are actually good for you, both physically and mentally! You are more likely to get active and let go of the negative thoughts if there is amazing scenery to explore, a beach to swim at, mountains to climb, or lakes to fish.
So, we know why they are good, but how can you make it work for your budget?
Making Your Holiday Work For Your Budget
While a world trip might sound amazing, you need to be realistic and see if it will fit within your budget. Think seriously about the kind of holiday you can have and the size of your family. That will help dictate what your budget will be.
Pitching a tent in a family campground can be just as much fun as a 5-star overseas resort. Working within a realistic budget for your family will ensure that you don’t overextend yourself financially.
This is especially important if you are considering borrowing money for your holiday. Make sure that you borrow responsibly. Set a budget for yourself, don’t over commit to repayments that are going to cripple you for the next few years. Don’t put yourself into financial difficulty, instead, scale your holiday back for your budget.
The Options To Borrow
There are a couple of options you can use to finance your holiday if you don’t have the funds available now. They are:
The first option is that you could use your credit card. The advantage of doing it this way is that you can pay back the money you spend on your travels as soon as you want as there are no fixed repayment terms. But you can fall into the danger of paying a lot more for your holiday than you had intended if you just make the minimum repayments. If you select this option, try to pay the balance back as quickly as possible so that you don’t incur too much interest.
Top Up Your Home Loan:
If you are looking to take an extended family holiday, then topping up your home loan may be an option. If you do choose to do this, then really think about the term that you take the loan over. Ideally, it would be great to repay the loan within a year or two so that you minimise the amount of interest you are paying. Keep in mind that it is a holiday you are borrowing for, not a lifetime!
If your bank provides you with the option to have an offset account, this can be a really great way to minimise the total amount of interest you will pay. As you save for your holiday, you can put those funds into the offset account and it will reduce the amount of interest that is applied to your mortgage. Then when it is time to head away, you can withdraw the funds and use one of the other two options to top up your holiday fund if need be.
Using An Adviser:
The best advice that I can give you is to utilise the experience and expertise of a financial adviser, like the team here at Mortgage Link. We can take a look at what you are trying to achieve with your holiday and see what the best option is for you to minimise the amount of interest you will incur. We have a strong relationship with all of the major and second tier lenders in New Zealand, so can give you a number of suitable options to choose from.
Holidays are an essential part of physical and mental wellbeing, so if your saving is just not getting you to your destination, it can be worth exploring the option of borrowing. If you would like to know what options are available for you, then get in touch with us here at Mortgage Link ad we will be happy to help.