Sun, sea and spending: how to make most of your holiday money

This summer could be tough on holidaymakers' wallets, with recent falls in sterling against other currencies putting a squeeze on the spending power of those heading abroad. So how can you make your money go further? Here are some suggestions:

Turkey, Mexico, Malaysia, China and Jamaica: sterling destinations? Picture: Getty

Plan a spending budget

Holidaymakers who overspent on their last trip abroad typically blew the budget by more than £100 each, according to a survey by Post Office Travel Money. Researching costs at your destination and planning ahead – perhaps by setting a budget for each day you’re away – could help to stop you overspending.

Choose your plastic wisely

While paying by plastic can be convenient, the costs can soon mount up when paying abroad. So check in advance how much your card will charge.

Research by Moneyfacts.co.uk has found a typical debit card can charge as much as £9.50 for a £200 cash withdrawal abroad, while a typical credit card can charge nearly £12 for the same transaction. However, some cards are specifically designed for use abroad.

Rachel Springall, a finance expert at Moneyfacts.co.uk, says: “Holidaymakers would be wise to avoid pricey withdrawal fees and instead consider a much more cost-effective card, particularly if they are frequent travellers.”

Where will your money go further?

If you’ve not booked your destination yet, it might be worth considering places where the pound could go further.

Andrew Brown of Post Office Travel Money suggests Turkey, Mexico, Malaysia, China and Jamaica are good bets. Bulgaria could also be a wise destination for wallet watchers.

Avoid spending pitfalls

This could happen when you’re paying for goods in shops or restaurants while overseas. If you’re offered the option of paying in pounds, be wary about the exchange rate that will be used.

Ensure you’re insured

While policies vary, in general travel insurance includes emergency medical treatment costs such as hospital charges, returning home if you cannot use your original ticket and temporary emergency dental treatment to relieve immediate pain. Make sure your policy suits your needs, such as covering certain sporting activities while you’re away.

Sort your insurance early

If you’ve just forked out thousands on a dream trip, make sure you will be covered if you’re forced to cancel.

More than half of holidaymakers are giving up valuable cancellation cover by arranging their travel insurance at the last minute, research suggests.

More than half (58 per cent) of UK holidaymakers who bought their single-trip travel insurance through Gocompare.com last year arranged their cover within a week of their holiday start date – including many who arranged their cover on the day of departure.

Gocompare.com Travel Insurance says leaving it late to get cover means holidaymakers are either making the assumption that only something that happens within a week of their holiday will cause them to cancel it, or they have just not considered the risks at all.