We have always managed to get our holidays for under a grand, thats 2 adults and 3 kids.
These are just a few tips we follow when we are searching!!
We always book accomodation and flights seperately, never ever book a package deal. And usually Self cater, which works out cheaper as well
We dont book too far in advance, usually book villa accomodation as it works out cheaper as you dont pay PP. You can if you are lucky get a villa/large apartment for as little as £350 if you book directly with the owners.
Also look out for cancellations.
Always use ryanair, Not the best i know but still the cheapest even with all the add ons, and they do get you there in one piece!!!
We manged to get a week in spain last summer for £700 for all of us, that was staying in s/c appartments (third year running we have been here!).
As the accomodation was stated allocation on arrival but we managed to find out where it was before we booked the first time, the named accomodation for the same place was £100+ more!!!
Be flexible on your flights (ie travel midweek), and flight times (early morning/late night
Be prepared to spend time searching best prices as you may find flight prices can and do change on a regular basis.
Sites like holiday rentals and owners direct are really good for private accomodation.
Hope this helps and you find a holiday within your budget!!!