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Ask the Expert – May

Independent financial expert Harvey Jones
tells us how to stick to a budget while on holiday


“I have a young family and we are going abroad on holiday this year. How can we make sure that we don't go over-budget while we're away?”

If you have a young family, you deserve a break. The trouble is, once you’ve got children, that getaway is more expensive. Flights, hotels and restaurants all cost more when you’ve got the kids in tow. So you’re wise to do everything you can to keep your costs under control.

"If you have a young family, you deserve a break"

Find a good deal

If you haven’t booked your holiday yet, there are three things you need to do - research, research, research! Rather than booking the first bargain break you come across, surf the internet, get down the high street and root out the best deals. There are now holiday price comparison sites such as and Trivago, which can make the whole thing much easier. And don’t forget to compare the cost of package holidays with self-catering and DIY flight and hotel deals.

"Research, research, research!"

Jetting abroad this year may be cheaper than last year. Thanks to the economic downturn and troubles in the eurozone, many travel agents and tour operators are offering big discounts to drum up business. If you can, avoid travelling on peak dates, although that isn’t easy if your kids have started school. As a general rule, weekends, the first few days of the school holidays and the August bank holiday are particularly expensive. You can also save by travelling midweek or on a Sunday, when prices for flights, packages and hotels are often cheaper.

One way to avoid breaking your budget is to shop around for an all-inclusive deal that throws in accommodation, airport transfers, food, drinks and entertainment - all you’ll need to take is a bit of spending money for day trips. Make sure you know exactly what is going to be included in the price, and watch out for added extras. Imported beers and branded spirits for example, may cost extra, while local versions may be included.

If you’re brave, you could wait until the last-minute, and try to grab a cut-price package deal. But I wouldn’t risk that if travelling at peak times, and bear in mind you won’t always know the exact hotel or resort you’ll end up at, and it may not cater that well for children. In that case, it may be wiser to book early, because prices typically rise as summer approaches.

Planning ahead

You don’t say whether you’ll be travelling with a baby. If you are, try looking for a package that includes free or cut-price offers for babies. If you’re a single parent or your partner will be staying at home, you might be able to get a discounted deal from some companies.

Kids don’t travel light. They need a mass of equipment, from strollers to sterilising kits. Ask your travel agent or resort whether you can get free baby equipment such as a cot, bedding, a buggy and a high chair. Some holiday companies offer pre-bookable baby equipment packs, including items like these, as well as a steam steriliser, bottle warmer and even a UV sun tent.

Kids are famously fussy about food, so find out if the resort has a child-friendly menu. You might also want to check whether your room is near to, say, a noisy bar, disco or nightclub. See if your journey involves a long transfer from the airport. Taking young kids on a flight will be testing enough, without a lengthy bus journey when you arrive.

If you go for bed and breakfast or half-board, check with your hotel if your room will have a fridge. If so, you can save money by stocking it with water and drinks from a cheap supermarket. Or you might prefer self-catering, which puts you in full control of what you spend. You can cook your own food, and use local shops and supermarkets to buy goods. This is also a cheaper way to buy treats such as fizzy drinks and ice cream for the kids, or beer and wine for the grown ups. It’s a lot cheaper than eating and drinking in bars and restaurants every day.

You could even club together with family and friends to rent a villa together. It might be cheaper than you think. When you do eat out, look for restaurants offering a menu of the day, which is usually two or three courses with bread and a drink. They can be great value. Restaurants and cafes in some European countries place bread and water on the table, but these aren’t always complimentary. Check with waiting staff before you tuck in, or you may find an unexpected charge on your bill.

Travel insurance is a must. A good family policy will typically cover both parents and two or three children. If you’ve got a large family, make sure all the kids are covered! Most important of all, don’t forget to apply well in advance for a passport for all your children. Even babies need one.

Factoring in all the costs

If you’re putting together your own DIY holiday, you will probably end up spending hours doing your research online (I usually do). Make sure you factor in all the costs, because they add up.

When packing, don’t exceed your baggage allowance, or you could face a big penalty at the gate. Visit your airline’s website to check its permitted baggage allowances. If travelling with a low-cost airline, make sure you print your boarding cards before you leave home. Some charge a £40 check-in penalty if you turn up without one, which could cost a family of five up to £200. And if you’re really watching the pennies, you could make sandwiches so you don’t have to buy food on the plane. You won’t be able to take more than an unopened 100ml bottle of liquid through security however, so it might be wise to wait until you’re in the departure lounge before buying drinks to go with them.

"The earlier you book, the more likely you are to get a good deal"

If you need a hire car during your trip, don’t hang around. The earlier you book, the more likely you are to get a good deal. Again, use a price comparison site, or check the websites of different hire companies to compare prices. You’ll need a car that fits all your family members, and your luggage, and that can drive up the cost. You can expect to pay extra for every child car seat you need, so one option is to take your own, but many airlines will charge you extra, particularly budget airlines. Check what yours charges before you travel.

You will also have to pay for petrol, which is a big expense these days. Work out how far you plan to drive and make a rough estimate of how much the petrol will cost. Having just one named driver on the policy can help save you money, as can avoiding extras like sat-nav systems.

Don’t forget to factor in the cost of, say, getting to the UK airport, parking, and any kennel or cattery you may need while you’re away.

Organise your spending money

The easiest thing to do is take your UK debit and credit cards abroad, but this can be expensive. All but a handful of credit and debit cards will hit you with foreign transaction charges, typically around 2.5 per cent of the amount you spend. Many debit cards will charge an additional fee of around £1.50 every time you use it. These charges could add between £3 and £5 to every £100 you spend.

Save money by ordering your cash in advance from an online currency service. Many offer free home delivery if you order more than £500. Otherwise, delivery shouldn’t cost you more than a fiver. Alternatively, buy a prepaid travel card. These are similar to a standard Visa or MasterCard, except you can only spend the amount you have previously loaded onto the card. Also, the foreign usage fees are often lower, although not always, so compare charges carefully.

It often doesn't pay to buy your foreign currency at the airport. The exchange rates offered by airport kiosks are not usually favourable compared with other currency providers. The pound fell more than 20 per cent against the dollar, the euro and other currencies during the banking crisis, but it is now fighting back. At the time of writing, sterling is up around seven per cent against the euro compared to last summer, and 15 per cent against the Turkish lira. That should help your money stretch a little further.

It’s also worth noting that resorts, hotels, restaurants, bars and shops in troubled eurozone countries such as Spain, Portugal, Italy and Greece are slashing prices to attract much-needed tourist income. They should welcome you with open arms.

Most importantly, this is your summer break, so don’t spend every second fretting about money. Happy holidays!

  • If you have a general financial query or dilemma unrelated to a specific financial services provider, email Harvey at
  • Harvey regrets that he cannot answer your questions individually. These are his personal views and not those of Virgin Money. Nothing in the article constitutes legal, financial or other professional advice.
  • If you have a specific financial concern, you should always seek your own professional financial advice.
  • Links to external websites are for information only. Virgin Money receives no income from them and accepts no responsibility for the website content.

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