Over two thirds (67%) of Brits have ‘fear of overspending’ on holiday
22 Jul 2016
With schools breaking for summer, Brits are worrying about oversees spending and roaming charges as they head into holiday season
New research by Travelex reveals Brits aren’t just looking for sunshine, this summer they’re also looking to combat overspending. Of the 58% of Brits that do plan to travel abroad this year**, more than a third (67%) admit to having a fear of overspending when on holidays.
Despite this, more than half (58%) admit to being more frivolous with spending when on holidays and nearly 40% (38.5%) have made impulse purchases they've later regretted.
“The excitement at being somewhere new and the relaxation of being on holiday can produce a state of mind in which self-control is diminished and impulsiveness increased. This produces what I call a ‘vacation brain,’ leading to unwise purchases and nasty surprises when the credit or debit card statements arrive.” Says David Lewis, psychologist.
Budgeting for holidays
When asked about how they budget for holidays, 67% of respondents said they do factor in spending money to the initial decision-making process, but that the idea of what they might need to spend whilst abroad is not ultimately an influential factor in where people end up booking.
The younger generation (those aged 18-24) appear to be the most budget-conscious demographic with nearly 26% (25.8%) saying they are terrified of not having enough spending money or overspending on their credit cards whilst away.
A recent study**** found that 75% of millennials said they track their budget carefully compared to just 64% of baby-boomers. The study suggests that this generations exhibits financial discipline more so than their older counterparts due to graduating during the recession. On the opposite side of the spectrum, those aged 55+ showed themselves to be the least budget conscious, as only 14% stated this to be a determining factor in their decision making process.
Understanding local currency when traveling abroad – and how it applies to their home currency – is a concern and struggle for many. From those polled, over a third of travellers (35%) noted being concerned that they may not be calculating exchange rates accurately when spending on holiday abroad. Only 16% of British tourists say they never worry about spending overseas as they calculate all exchange rates and charges accurately for every transaction, cash or card.
Roaming fees and charges
A majority of tourists (74%) say they are aware of all the fees and charges they should expect to be charged on their debit or credit cards when abroad, yet over a third (35%) admit to worrying they haven't calculated costs accurately when spending.
So what does this mean and how can people learn from their mistakes – and those of others in the UK – when it comes to traveling abroad? Travelex enlisted the help of Psychologist David Lewis for his advice about spending and how to do so worry-free whilst on holiday. David’s advice is as follows:
Avoid ‘vacation brain’ by adopting the PREP strategy: Pause, Reflect, Evaluate, Proceed:
- Pause: Never be rushed into any purchase. By allowing your rational mind time to take over from your ‘vacation’ brain, you can make savings and prevent regrets.
- Reflect: Ask yourself three questions - ‘Do I really need this? ‘What benefits will it provide?’ ‘If I don’t buy it what will I lose?’
- Evaluate your options: Ask - ‘Is the price fair and reasonable?’ ‘Can I find it cheaper elsewhere?’ ‘Is there a less costly way of purchasing it?’
- Proceed: Make the purchase or walk away from the deal. Never allow the excitement of the moment to overwhelm your caution and common sense.
- PREP is easily remembered as the first four letters or Prepared!
Further travel tips from Travelex include:
- Plan your spending well ahead of time: even at the booking stage, Luxury for Less by Travelex pulls together the cost of flights and hotels, combined with Travelex exchange rate figures and the average spend of past holiday makers to help travellers create a luxury holiday to suit their budget. By factoring in the cost of everyday holiday spending on items such as wine, taxis and food, the travel inspiration search engine creates peace of mind by helping people to pre-plan their spending money requirements.
- Utilise top travel tech for ultimate holiday convenience: once you’re there, make sure you utilise top travel technology to help you find the best places to stay, the easiest means of navigating around a city or to split the bills with your friends and family. There are apps to help you learn the language and translate menus. Make it the trip of a lifetime with a hassle free holiday.