7 Simple Ways to take your next holiday for FREE*

Hello and thank you for checking out my post on Sal and Jess’s Money Saving Blog. Who am I? My name is Yannis (Greek for John) and I’m half Greek half English (disclaimer: I didn’t have anything to do with the Greek economy). I am a fellow money saver just like you and I am here to share some tips I have learned along the way to hopefully help you out on your money saving quest!

Let me start off by addressing the star (*) next to the word FREE. The reason for this is that people’s budgets for holidays vary A LOT depending on the size of their family, income, location blah blah, you get the point I hope 🙂 This post will be all about how you can save a sizeable amount (between £4,000-£6,000) to use on your next holiday and hopefully get it for free!

I will be detailing some methods that may seem small (and are) but collectively make a difference so I hope you enjoy. Lets dive in:

1) Switch Bank Account

Banks like First Direct, Halifax and the Co-Op offer people cash for switching to them. This can be anything from £100-£150. First Direct in fact offers a £100 cash back on top, if you are not happy with them and leave after 6 months but before a year. This mounts up to £200 from them. There are always terms to these so don’t forget to check with the bank if you decide to switch.  There are also extra incentives such as a £5 cash injection into your new account from Halifax if you pay in a minimum of £750 per month and have 2 Direct Debits going out. Disclaimer: If you are happy with your current account then don’t switch or if you are worried about the hassle, don’t switch.

Money Saved/Gained: £100 – £150 + £5 per month (x12) = £60 (varies on choice of bank)

2) Shop at Discount Supermarkets

It’s no wonder Aldi and Lidl have grown at such a big rate (12.5% and 15.4%) in comparison to other big supermarket chains like Tesco (1.3% decline) Asda (5.1% decline) and Morrisons (2.8% decline) (source) as the price can be as much as 60% cheaper at the discount stores in comparison to the big 4. Couple this with the use of the same supplier (it has been reported that Aldi use the same supplier as M&S do) means that even if you were to buy the “premium/luxury” products you would  save around £7.53

(source).

Assuming your weekly shop is £50-£100 (easy maths) at M&S you could save around £15-£30 (30% as the half way point between 0 and 60%) per shop. This is £15 x 52 (weeks in the year) = £780, £30 x 52  = £1560. This is without compromising on quality too much as the source article reveals that taste testers said “The M&S food might be 60% more expensive but I don’t think you get 60% more flavour for that. It had the edge but only just.”

Money Saved/Gained: £780 – £1560 (varies on your shopping figures and choice in supermarket)

3) Give yourself an interest free loan*

Assuming you have debt (loan repayments or credit cards etc) a good way to get around the monthly interest rate is to balance transfer the debt onto an interest free credit card. For example, in my just after university days, (after all the spending on alcohol and holidays – ironic) I had a debt of around £3000. The interest for this was around 10% per annum (some have as much as 30%. The average I believe is 18.9%).

This means I was paying £300 per year (or £25 per month) JUST on interest. That is not my idea of fun. This means that if I was paying £100 per month to clear the balance off, £25 was being pocketed by the lenders, so I was really paying £75 per month. This means it would take me 30 months (2.5 years!) to pay it off. It also means that the lender would have pocketed £900.

What I then did was take this debt and transfer the balance to an interest free credit card (Barclaycard had a deal at the time. Tesco Bank, Halifax and the like also do. Disclaimer: your credit rating plays a part in obtaining such a card) where I would have no interest other than the balance transfer fee for a period of anything from 12-24 months (usually at around 2.9% of the overall balance, so lets say £90 assuming a 3% figure).

Mine was 24 months luckily, meaning that my now balance was £3090 BUT I had 0% interest on a monthly basis. This means that the £25 I was paying before as interest would now be £0 meaning that all of the money I was paying back would go towards clearing off the balance (WIN!). So by setting my payments at £100 per month, it would now mean that over the course of the 24 months, I would pay £2400 back minus the £90 fee leaving a balance clearance of £2310, so a debt of £690 left to pay. At the previous interest rate I would have paid £2400 back minus the £25 per month fee (£600 over the course of 24 months) leaves me with a balance clearance of £1800, so a debt of £1200 left to pay. In essence I have saved £510! 😀

In the past, balance transfers incurred no fee so people used to use them to in fact MAKE money. Imagine that! Taking a few credit cards out, extracting cash from them, putting them in a savings account (earning a % interest, usually around 3% – hence the now balance transfer fee) and then transferring the debt onto an interest free card with no balance transfer fee, meaning that they would now earn £3 for every £100. Add a few zeros to the end and you get the picture. (Disclaimers: lots of them, but since it is no longer applicable I won’t waste time writing about them).

Money Saved/Gained: £510 (varies depending on if you have debt or not)

4) The Dreaded PPI Scandal

This leads me nicely onto the next point being PPI or Payment Protection Insurance. This was an insurance product that was sold (mis sold in many cases) to consumers looking to take out finance products such as credit cards, loans, mortgages etc. It was basically there to protect you if you couldn’t make payments because of a change of circumstance through no fault of your own. In principle it does sound like a good insurance policy to have, but banks and insurance companies being the way that they are, encouraged their sales staff to sell it, many times without the knowledge of the consumer. This was due to the LARGE commissions (as much as 73%!!! in some cases) that the banks made as a result. (source)

If you think you were one of those that was mis sold, the average PPI claim is around £2000 – £3000. You can check with the lender direct or use a Claims Management Company to take away the hassle. (Disclaimer: you will get charged a % fee of the money they claim back for you if you go through a CMC, so it’s up to you if you want to do it yourself – time consuming – or go through a company – % money consuming).

There has also been a recent announcement by the FCA (Financial Conduct Authority) regarding a deadline for PPI claims. This has been set for June 2019 (source) so you still have time, however it’s better to do it sooner rather than later in my opinion as PPI claims can take anywhere from a couple of weeks to a few months depending on the lender. Also it’s better to have the money in your bank (so you can pay for your holiday sooner to get it cheaper).

Money Saved/Gained: £2000 – £3000 (this will vary A LOT depending on lots of factors)

5) Use Cashback and Voucher Websites

Websites like topcashback, quidco (cashback) wowcher and groupon (vouchers) partner up with companies that want to get more customers quickly in order to expose them to their product(s)/service(s) and to the brand. The idea is that everyone is a winner as the customer gets a good deal (either money back or money off), the vendor gets a new customer and the website makes a commission. It doesn’t always work in my opinion (for the vendor mostly), but it is a winner for the consumer, so next time you think of shopping, I would recommend for you to quickly browse these sites to see if there is anyway you can get the item/service you want for cheaper.

There are sooooo many options to save money with these sites, so the numbers I am going to use are according to this source. They are: £280 – £316 per person per year on average. I’m going to call it £300 as it is roughly the middle point.

Money Saved/Gained: £300 (as mentioned above, this is an average per person per year)

6) Switch your Utility Bill Supplier

Yep, I know it is annoying to keep switching every year. You would think that a supplier would reward loyalty… unfortunately not. (this is the same with car insurance, so you should review your insurance every year also).

The main option is to use a price comparison website like Money Supermarket and find a better deal for your area. Prices vary based on where you live as when the deregulation happened in the industry, the UK got split into 13 regions. Without getting too technical into it, it simply means that the prices from a supplier will differ if you live for example in London compared to Manchester. Don’t worry about it too much, simply let the website do the work.

Bonus Tip* The water industry is following the gas and electric trend and will also get deregulated in May 2017, so look out for that and change water supplier to a cheaper one if you can (I assume the price comparison websites will have you covered).

Money Saved/Gained: around £200 per year (source)

7) Tip for Coffee Drinkers

This is a little tip for if you drink a lot of coffee from vending machines (I do). You will have probably noticed a certain brand (….. Rica) pretty much dominating the UK coffee scene. Well, a friend of mine (my sister’s ex boyfriend’s cousin’s girlfriend) told me a while back that it costs around 10-15p to make a cup of coffee. (I believe this is taking into account running costs as well, but don’t quote me on it) I am sure you have seen the PHENOMENALLY expensive prices, especially at service stations. To boot, there have been many times when my coffee cup isn’t even filled to the top. (this makes me sad)

What I do is simply grab the medium cup and select the large option. I always get a cappuccino so I pay attention to when the milk is about to reach the top and I simply move my cup away when it does so. This means I have a full cup of coffee (happy times) and I also save on the price (around 30p – hey that’s 2 cups of coffee at cost price). This probably doesn’t sound a lot (compared to the other options mentioned), but hey, coffee for me is a highly emotional purchase so the value I place is extremely high and I really enjoy getting that value by means of a full cup. It makes me feel good and not “short changed” (Rant over).

If you drink around 2 coffees a day and save 30p per coffee, that is 60p per day x 365 = £219 per year. This is obviously assuming you go to this brand and you drink coffee from a vending machine. You could always get instant and make it at home for A LOT cheaper. I don’t like instant as much and seen as I don’t smoke or drink lots, I have coffee as my “thing”. This is completely up to you to do.

Money Saved/Gained: £219 per year.

Lets review the money saved using these methods going from lower figures to higher.

Lower figure methods:

• £100
• £780
• £510
• £2000
• £300
• £200
• £219

Total = £4,109

Higher figure methods:

• £210
• £1560
• £510
• £3000
• £300
• £200
• £219

Total = £5,999

The average between these 2 totals then is around £5,000

What is the average cost for a family holiday?

£4,792 + £908 (£227 per person x 4) = £5,700

Congrats! You now have a holiday for FREE*! (you either pay a small amount in comparison of the total cost of the holiday or you have made money to use for spends whilst on holiday. Over £1000. BOOM!) You never know, if you are lucky and get a large PPI payout (as this is probably the only one that will vary a lot out of the 7 methods) of say £82,000 (source), then you can have several holidays for truly free or splash out on 1 MEGA holiday. The options are endless.

I hope you enjoyed these tips. If you would like a follow up, please let me, Sal and Jess know in the comments 🙂