In this guide
How to set your holiday savings goal
Start by deciding the type of holiday you want. A beach break, skiing trip or city adventure all come with different costs. Having a destination or style of holiday in mind helps you focus your plan.
Break your budget into simple parts so you know exactly what you’re saving for:
- Travel
- Accommodation
- Food and drink
- Activities
- Spending money
- Extras like insurance or airport parking
Add these up to get a clear picture of your total cost. Then look at when you want to travel. Divide your total by the number of weeks or months until then. That gives you a realistic amount to save regularly.
A clear goal helps you stay motivated and stops your holiday fund feeling out of reach.
Choosing the right savings account
Keeping your holiday savings separate from day‑to‑day spending makes it much easier to stay on track. A dedicated savings account helps protect your progress and gives you a clearer picture of how close you are to your goal.
Easy access savings accounts
Easy access accounts let you add and withdraw money whenever you need to. They suit shorter‑term saving or trips you haven’t booked yet. Because you can access your money quickly, they’re handy for deposits or good‑value deals that pop up.
Fixed rate savings accounts
If you’re planning further ahead, a fixed rate account can help your savings grow faster. Your money stays untouched for a set period. In return, you’ll usually get a higher interest rate. This can be helpful if you’re saving for a bigger trip and don’t need access to the money straight away.
ISAs
Individual savings accounts (ISAs) allow you to save tax‑free, helping your money grow more efficiently over time. Some ISAs let you withdraw money, while others limit access. Check the terms to be sure if the account suits your holiday plans.
How to pace your saving
Saving for a holiday is easier when you build small habits. Regular contributions, no matter how small, can quickly add up.
The important thing is consistency. And automating your savings can help you stay on track.
- Set up a standing order into your savings account
- Add extra money when you can
- Track your progress to keep motivated
Ways to build your holiday spending money
Saving for the trip itself is one thing. But your spending money for when you’re away is a big part of what makes a holiday enjoyable.
There are some simple ways to build your spending budget without feeling restricted. You could:
- Cook at home more often
- Pause subscriptions you’re not using or could do without for a while
- Sell things you no longer need (get some tips in our guides to selling online)
- Put bonuses or extra earnings straight into your holiday fund
- Use cashback apps when shopping, to get money back on your purchases
- Set up a small weekly “spare change” transfer
These quick wins free up money for meals out, treats or experiences once you’re away.
Using prepaid currency cards
If you prefer to build your holiday spending money gradually, a prepaid currency card can help you feel more prepared when your trip comes around. These cards vary by provider, but they typically let you:
- Load small amounts of currency to your card over time
- Lock in exchange rates when they look favourable, saving you money if rates rise later
- Keep your holiday money separate from everyday spending
- Spend only what you load (unless your chosen card links to your current account)
- Track your spending online or with an app to check your balance and transactions
- Reduce your risk if your card is lost or stolen (eg, by freezing your card to prevent its use)
Our own Travel Money Card lets you load multiple currencies, move funds between them and track your spending while you’re travelling using our free travel app.
Read more about prepaid travel cards and smart ways to spend abroad.
Finding great value destinations
Another way to save money on your travels is to choose destinations where your pound sterling goes further. Our annual Post Office Travel Money reports can help with that. They compare everyday holiday costs for various items across popular locations, including for holidays on the continent, family holidays, long haul trips, city breaks and ski resorts.
They look at things like:
- The price of meals and drinks
- Local transport
- Attraction costs
- Shopping and essentials
You’ll find all our travel money reports on our travel and adventure page.
How to save on your holiday
10 smart travel money tips
Once you’ve saved for your trip, it’s worth making your money go further when you’re away.
- Travel off-peak: Avoid school holidays or peak seasons for better deals on flights and accommodation
- Book early: Flights and hotels are often cheaper when booked well in advance
- Use comparison sites: Compare prices across multiple platforms for the best deals
- Tap into local knowledge: Eat where locals eat and explore free or low-cost activities
- Use public transport: Skip taxis and opt for buses or trains to save money
- Prepay for activities: Booking tours and activities in advance can secure discounts
- Travel light: Avoid extra baggage fees by packing smart
- Claim VAT refunds: In some countries, you can reclaim VAT on certain purchases
- Shop at markets: Buy souvenirs and food from local markets rather than tourist shops
- Use a prepaid travel card: Save on exchange rates and foreign transaction fees
Key takeaways
- Setting a clear holiday savings goal helps you stay focused
- The right savings account can help you reach your holiday savings goal within your timeline
- Prepaid travel cards help you build and manage your spending money
- Smart choices before and during your trip make your holiday more affordable
Find out more about our savings products
Common questions
-
It depends on where you’re going and how you like to travel. Research your chosen destination to get a realistic idea of costs. Our travel money reports can help you get an idea of local costs in different destinations.
-
For short-term goals, an easy access savings account is a practical choice. It offers flexibility and immediate access to your money, so you’re ready when it’s time to book.
-
Yes, you can use prepaid travel cards to book flights, hotels and other holiday costs. Check that the retailer accepts the card’s payment network, like Mastercard® for the Post Office Travel Money Card.
If you’re paying in pounds, check if the card charges a transaction fee. Ours doesn’t, but you’ll pay a fee when you load GBP onto the card.
-
That’s really up to you and your circumstances. But in a savings account your money is kept safe and earns interest, and it’s easy to track your progress. Cash is riskier and doesn’t grow over time.
- Read more
-
While it’s tempting to dip into your holiday savings, keeping this money separate ensures you stay on track. Consider opening a dedicated account or using a prepaid card exclusively for your holiday fund.
-
No, that’s not what it’s intended for. An emergency fund is meant for unexpected expenses like medical bills or urgent repairs, not holidays. It’s best to keep your holiday savings separate, so you have money set aside for genuine emergencies.
Other ways to save for a holiday
-
Fixed rate accounts
Saving for the longer term? Earn a fixed rate of typically higher interest by limiting access to your money for a fixed time
-
ISAs
Save tax-free with a fixed or variable rate of interest, or both. Choose from an Online ISA, Easy Access and Fixed Rate Cash ISAs
-
Travel money card
Buy your prepaid Mastercard® that stores up to 22 currencies for better flexibility
Related articles, guides, tools and services
How many ISAs can I have?
ISAs, or individual savings accounts, have been a popular way to save or invest your money tax-free for years. But how many can you open?
How much can I save in an ISA?
An ISA, or individual savings account, is a tax-free way to save or invest your money. But how much can you put in one each year?
Saving for a car
Buying a car is a big step, whether it’s your first set of wheels or an upgrade. But a good savings plan can help make it easier.
A guide to savings
Thinking of saving or investing, but don’t know where to start? This guide provides an introduction to the various options available.
How to build an emergency fund: a savings guide
An emergency savings fund is your safety net for unexpected costs. This guide explains how to start an emergency fund, how much you need and why it’s so important.
What is a fixed rate bond?
Unsure about how fixed rate bonds work? We can help with that. In this guide, we’ll explain what fixed rate bonds are and how they can help your savings grow.
What are ISAs and how do they work?
Want to know more about ISAs, the different options available and which of them might suit your savings needs? We can help with that.
Saving for a rainy day
A rainy day fund can help make life's small surprises easier to manage. Learn how to build, manage and use a fund so you feel more prepared if something unexpected comes up.
Saving for a wedding
Planning your wedding should feel exciting, not stressful. Starting to save early helps you cover the cost of your dream day, avoid last-minute borrowing and make choices with confidence.
Saving for Christmas: tips to help you budget the festive period
Christmas and the build-up to it should feel joyful, not stressful. With the right plan and simple saving habits, you can build a festive fund that covers gifts, food, travel and treats without money worries.
Making the most of your tax-free allowances
Your tax-free allowance is one of the easiest ways to keep more of what you earn, save or invest. But if you don’t use it before the end of the tax year, you lose it.
Do I have to pay tax on my savings?
The interest you earn on your savings can be tax-free. But it depends on how much you earn and where you keep your money.
Post Office Travel Money Card is an electronic money product issued by First Rate Exchange Services Ltd pursuant to license by Mastercard International. First Rate Exchange Services Ltd, a company registered in England and Wales with number 4287490 whose registered office is Botanica Ditton Park, Riding Ct Rd, Datchet, SL3 9LL (Financial Services Register No. 900412).
Mastercard and the circles design are registered trademarks of Mastercard International Incorporated.