To pay for our holiday in instalments?

[ddddora]

It’s a few hundred pounds a month. Talking to a friend and she said it’s what most people do. AIBU to pay this way? It’s interest free, and we have the funds available each month technically it’s just less to put away in savings. ATOL and ABTA provider, only lose the small deposit if I cancel but can also move the dates if needed for small admin fee.

Can’t pay for it outright as it would deplete nearly all our savings & if I wait to book it, the prices will rocket.

But surely if you were putting it in an account you set up specifically for holidays you would also be reducing the balance over time, albeit in a less direct way as the account would effectively be a middle man?

This. Why let the holiday company earn the interest instead of you. I don’t know many people now that pay in full upfront. Makes sense to earn the interest in savings and pay off in instalments. Much smarter.

I personally find it easier to treat the holiday as another monthly bill - once it's with the holiday company I don't need to worry about it being swallowed up by any other payments or bills.

@OchonAgusOchonOh It literally takes less than a minute to sign into my holiday booking and make a payment. Then I get a confirmation email of how much has been paid and owed.

Funnily enough, I only know of one other friend who does this. Everyone else books flights themselves (so pays upfront) and then usually a hotel directly or an Airbnb. We have done that in the past and probably will again.

I've always paid for holidays like that, other than last minute ones.
Even camping we don't pay all in one go. It's like a lot of things, we bought a new sofa and decided to use the interest free credit. It meant a certain amount every month and didn't cost us any extra.
Your relative needs to realise that you as an adult, make your own decisions for how things work best for you.

@MaryActsLikeSheDontCare It's not the length of time it would take. It's the remembering I would find stressful. Even with a reminder in my phone I would still hate it as I can't be sure I would be able to, or want to, log in at that time.

Funny isn't it, how something quite simple that makes life easier for one person would make it more stressful for someone else.

When the kids were younger, we usually did family holidays that were a bit more organised so keycamp or similar but we always booked the flights separately and paid the balance just before the deadline. When they got older we would book flights and accommodation ourselves generally. This year is the first in a while we are booking anything packagey. Dh and I have just booked a river cruise on the Danube. However, full payment is due next month so even if I wanted to, I couldn't pay in installments.

I wouldn't book a holiday I didn't have the money for but equally if it requires monthly payments or full payment it makes financial sense to pay the smaller sum and retain your savings longer.

I prefer to pay the deposit and a lump sum nearer the time. I don't need to manage money carefully and I'd rather hang on to my money for the longest time possible.

I've got a friend who books holidays in installments and says its a small amount each month and you notice it less but I'd rather give £500 now and £4500 in 10 months time than £500 every month for 10 months.

No it isn't.

Whatever way you pay for it please buy travel insurance at the point of booking the holiday.
So many people buy it just before they travel (myself included in the past) but if you have to cancel for genuine reasons you have lost all your money if insurance isn't in place.

I prefer to pay as late as possible for anything like this so it's me getting the interest, but that doesn't work for everyone. Some people prefer knowing they can't spend the money on anything else.

I've got three holidays booked for next year. Two are DIY flights and hotels. I booked the flights last year and paid up front. I'm saving the money for the hotels in a specific savings account which I add to monthly. My current account has round up set on purchases and adds to it too.

The third one is a Jet2 holiday and I've paid on installments. All paid for now and half board so not much to spend when I get there.

I'm going to a few UK things where the hotel is booked flexibly and pay on arrival in case I need to cancel.

I have annual travel insurance.

I see nothing wrong with installments if they work for you.

I always pay monthly regardless whether it's UK based or abroad. I don't get the whole issue with paying monthly, it's exactly the same as those who save and then pay it in one go. Benefits of paying monthly is you often end up with a cheaper holiday (as you can often price match) than those who wait and pay it in one go (my march holiday is evidence of this). Honestly OP if you can afford the monthly instalments without it causing financial issues then pay monthly.

@Skyblue92 - it's not quite the same as paying into an account as you would presumably just have an SO to the savings account so you don't have to think about it each month whereas you do have to think about the installments. Plus any interest goes to you rather than the holiday company. So I guess it just depends on which you find better.

It also makes no difference to being able to shop around early to get the best price (I assume that is what you mean by price match) as you just book and pay a deposit early and then pay the balance by the due date.

@OchonAgusOchonOh A cruise on the Danube sounds amazing. Enjoy!

I personally wouldn’t book a holiday I didn’t have the funds for, however I have put £300 deposit on our summer holiday and will pay the rest 30 days before travel (or whatever the time scale is) as set by our holiday provider. Funds are in our savings account but ideally I won’t touch those and will just use what we save between now and July. That way we benefit from the interest.

@MaryActsLikeSheDontCare Thank you. I'm really looking forward to it.

None of the dc are coming with us so we can afford a more elaborate holiday. Although I do feel a bit sorry for the youngest who is 20 as he missed out on holidays with us due to covid. I promised him a few days away over the summer to make up for it. Not sure where we'll go.

Erm paying monthly tends to mean a DD which means you don’t have to worry about instalments as it is automatically taken on the monthly due date which is how the vast majority of monthly payments are made, very very few people who pay monthly do it without a direct debit. Paying monthly also means no worry about paying the final balance on time.

the price match was in reference to the fact the OP stated relative implies unless paying outright

Not necessarily. A poster upthread said she logs in every month and pays the instalments that way. I've never paid monthly for a holiday so I assumed that was the normal way of doing it. I know car insurance and the like will require a dd but that is different to paying for a holiday before it is due.

There is no way on earth I would set up a dd to a holiday company. You have to remember to cancel it when it's fully paid off and I've had issues in the past with a dd not actually being cancelled.

Re the price match and paying in full, I can't imagine the relative meant to pay as soon as you book rather than when the final payment is due but if they did, that makes absolutely no sense.

You’ll have to come back and tell us about it @OchonAgusOchonOh

I can log in and make a payment whenever I want. I get paid fortnightly, so usually make a payment on that day. You can pay as little or as much as you want. I love to see the balance decreasing. I would hate to have the entire cost hanging over me, that’s just the way I am with money.
Although, the money sitting in my account and gathering interest is food for thought!

@MaryActsLikeSheDontCare I can understand your point of view. It makes sense but it just wouldn't be for me.

I'll try and remember to report back on the cruise. I'm really excited.

Entirely normal and one of the benefits of taking a package holiday. If you book flights and accomodation separately you have to pay for flights upfront. Hotel not necessarily, but you do get the best deal

I’ve just paid deposits for our summer hols will be paying the rest in installments. We do have the money to pay for it in full, but might as well hang on to it to get negligible extra interest!

I have never had the option to do it as we buy everything separately but why not if it's no interest.

I have a few friends that use a travel agent and that’s how they pay. They make a deposit the pay monthly up to a month before the trip/holiday

I've always just paid outright for holidays. I've not always been well-off, but I suppose I don't like the thought of having to keep track of different amounts leaving my account at different times (if you paid for different things by instalments you'd end up with a few payments at different times in a month). If I know I've paid for it, it's sorted and I don't have to remember about keeping track of instalments or multiple direct debit coming out.