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Holiday budgets: Here are some ways to rein in your spending abroad

Research highlights how common it is for us to wildly underestimate day-to-day expenditure while on holiday, with eating out a significant factor

In UK research, food and drinks were named by families as the biggest factor in their overspending. Photograph: iStock

Holidays overseas can be a dangerous time when it comes to losing the run of our finances, handing our money over too easily as we lounge in the sun.

A recent report from the Post Office in the UK has found that the gap between the amount of money holiday makers think they are going to spend and the amount they actually spend has widened and is now at its highest level in a decade.

It found that, on their most recent holiday, three-quarters of holidaymakers surveyed set a budget averaging £334 (€395) per person but about two-thirds admitted to exceeding that – and by an average of £155 per person. And the news is even worse for some families, who set off planning to spend £566 (€670) per person before spending an average of £312 more than that.

The research covers day-to-day spending and does not include flights or accommodation. “Family overspending levels have almost doubled since before the Covid-19 pandemic,” the Post Office said. It blamed the cost-of-living crisis, which has seen prices climb all over Europe.


A total of 57 per cent of British holidaymakers suggested that a much higher-than-anticipated cost of eating out was to blame for budgets quickly falling apart, while a higher-than-expected cost of food and drink in supermarkets was also blamed by a third of respondents.

A similar percentage attributed their overspending to the cost of drinks, and 44 per cent overspent on sightseeing and excursions.

Food and drinks were also named by families as the biggest factor in their overspending, but many their pesky kids, with a third claiming that splashing out on water parks and ice-creams and beach toys had contributed to unplanned spending.

The final countdown to those last-minute holiday savingsOpens in new window ]

The research also looked at all-inclusive deals. This page has written in the recent past about the growing popularity of all-inclusive deals as a way to manage spending while overseas – the upfront costs are higher but, in theory, that should be it.

The theory doesn’t stand up to scrutiny, according to the Post Office with the proportion of people paying extra for meals and drinks on an all-in deal quadrupling to 57 per cent over the past decade with fewer items – notably a range of alcoholic drinks – commonly included in such deals.

According to Laura Plunkett of the Post Office “most people set inadequate budgets and end up overspending as a result”.

Her top tip for making sure people avoid underestimating their budget is to look back at their last holiday and set a budget for the upcoming one based on those figures.

It is solid advice for sure but it is predicated on the fact that people know how much they spent last year – and people can have very selective memories on that score.

Although the research is from the UK, Pricewatch has no reason to believe we are that different, and the findings are likely to resonate with a great many Irish holiday makers.

To find out just how much it would resonate we took to the social media platform X and polled people about their overspending habits when on holidays.

“When you are away on holidays do you spend what you think you will, less than you think, more than you think or way more than you think?” we asked.

The results were unsurprising. Just over 20 per cent of respondents said they spent what they anticipated while one in 10 people said they spent less than they imagined they would.

Then there were the rest of us, with just over 50 per cent saying they spent more than they thought would and just over 17 per cent saying they spent a lot more than they planned.

We also asked people what they overspent on.

Killian Fitzpatrick said that although he was on a self-catering holiday, he wasn’t doing a lot of self-catering. “We both cook, but eating out on holidays is more appealing and where most of the cash goes,” he said.

“Food is a huge one,” agreed Louise O’Connor. She said that not having access to a kitchen if you’re in a hotel, or else not having an extensive range of kitchen utensils or familiarity with the kitchen, if you’re in an apartment, led her to spend more eating out.

John Maguire said he did a big shop, although it was not the money-saving tip you might think. Instead it became a matter of “filling the fridge in the holiday home with a big shop then eating out three times a day for the rest of the holiday because you can’t be arsed cooking”.

There is no point doing a big shop like you are at home unless you are going to cook like you are at home. Above, a Carrefour supermarket in Toulouse, France. Photograph: Christoiphe Ena

How to avoid wildly underestimating your holiday spending

1. Set a budget and be realistic. There is no point giving your family a spending limit of €50 if you are in a place where a Magnum can cost up to €4 – we’re looking at you, Ireland. Have a casual look online for prices in the destination you are travelling to and go from there. And remember, they have had a cost-of-living crisis there, too, so don’t work from memory.

2. Break down your budget into daily expenditure and then, while you are away, keep an eye on it. We are not going to suggest you make a game of it – it would be a terrible game – but bear in mind that if one day you spend less, you have more to spend another day.

3. If you can do some self-catering, do it, particularly if on holidays with little ones. The cost of lunch and dinner out every day for 14 days for four people will burn though money. But don’t go wild on the big shop either. There is no point shopping like you are at home unless you are going to cook like you are at home.

4. Keep an eye on incidental spending. The cost of all those coffees, ice-creams, pints and beach toys can quickly add up. We are not saying don’t buy them but just be aware of how much everything is costing in the early days of the holiday and maybe think twice about buying all sorts of useless plastic beach toys. A top tip on this front is to keep small wide eyes outside of the shops where the tat is for sale.

5. Don’t obsess. You are on holiday. Relax and enjoy yourself.