July.21.17Holiday Finance
Money Matters with Nimi

The holidays are almost here and hopefully we can get away from the stresses and strains of work and routine home life. Many people will be heading home to Nigeria to spend time with friends and family whilst others will be heading for other destinations to enjoy their annual break. With all the excitement of deciding where to go and what to do, it is so easy to overspend. Whilst we don’t want you to be a scrooge, here are a few ways to manage your holiday finances and still have lots of fun.

Plan Ahead

Don’t wait until the last minute to make arrangements for your holiday, unless you can afford to be flexible and accept whatever is available. Last minute bookings can cost you twice as much as if you had booked weeks, if not months in advance. This can get really expensive when you are making a booking for a large family or group. When you book early, there is more time to make travel arrangements and shop around for better deals on fares, hotel accommodation and tour packages.

You can use your air miles to offset your ticket or accommodation costs, if you book far in advance of your trip. Bear in mind that the best value you can get with your air miles is to use it during off-peak seasons when demand is low.

Draw up a holiday budget and stick to it

Once you have an idea of the sort of holiday you would like and where you would like to go, start working out how much it will cost; don’t forget the extras that tend to spring up.  You do not have to travel to an expensive and exotic location just because “everyone else” is doing so. Of course, a two-week cruise on the Nile sounds wonderful and is what you deserve, but can you really afford it?

Look critically at your finances. How much spare cash do you actually have to spend? Are there any additional inflows you can expect over the coming weeks? Have you saved towards your holiday? By putting some money aside in advance, you won’t be tempted to make a huge dent in your savings all at once.

Set an overall spending limit and involve your family in setting their individual limits. You will need to budget for the various aspects of holiday spending including accommodation, transport fares, food, shopping, entertainment, gifts, excursions and so on. Try to stay within your budget without taking all the fun out of the holiday. Avoid borrowing to finance your holiday unless there is the absolute certainty of an impending inflow of funds.

Have you purchased your foreign exchange?

Remember to purchase your Personal Travel Allowance (PTA), which entitles adults to $4,000 per quarter; this will be paid in cash, or travelers cheques. You will need your international passport with a valid visa for the country you are visiting, and a return air ticket to support your application for PTA.

Licensed bureau de changes are usually available at airports; this is very convenient particularly when you arrive, but they tend not to be as competitive as those in town. Look out for the commission charge and the exchange rate offered. Work out exactly how much you will get in exchange for your currency, to make sure it meets your expectations. Be cautious when you patronize moneychangers, as there is the very real risk of being shortchanged or sold counterfeit money.

Credit cards, debit cards or cash?

If you plan to use your cards whilst you are away to save you carrying too much cash, notify your bank or credit card company; as an added security precaution, many card providers look out for what appears to be” suspicious” activity. If they see your card being heavily used particularly in what is an unusual environment for you, your account may be suspended until they have heard from you to confirm that it is indeed you using the card. Ensure that your card providers can reach you whilst you are away.

As far as possible use your debit card for withdrawals at ATMs during bank opening hours. It is very expensive to use a credit card. Remember to hold some cash as back up just in case your card is lost, stolen or gets stuck in an ATM.

How will you get around?

As far as possible book your car ahead of your departure as picking one up on arrival is usually more expensive. Read through the terms and conditions fully understanding the insurance terms, particularly where you require a self-drive car rental for a period. In Nigeria car hire services are readily available but it is safer to patronize a reputable licensed agency.

Be particularly cautious of opportunistic “taxi drivers� who beckon as you step out of the arrivals hall; they are looking to make money from unsuspecting tourists and visitors and will charge exorbitant rates; some might even rob you. Go to an official taxi rank if you haven’t booked a car in advance, and make sure you are getting into a licensed taxi.

Are you insured?

Have you given any thought to what would happen if something were to go wrong? While vacations usually go without incident, you don’t want to be caught unawares. What if someone in your family suddenly falls ill? What if your luggage gets lost or you have to cancel your trip? Travel insurance usually includes coverage for medical bills, lost baggage and cancellations. Read the fine print to ensure that you have the best coverage at affordable rates and make sure your medical insurance card is on you.

Beware of roaming charges

To use your phone abroad you will have to pay to both make and receive calls. The “roaming charges” can result in a shocking telephone bill when you return home. Contact your service provider and be sure of the implications and costs. Often people end up with huge bills without even knowing how it happened. Pay your bills in advance so that you don’t get cut off whilst you are away.

It makes sense to buy a local SIM card when you arrive at your destination; make sure that your friends, family, colleagues and important contacts have the number so that you don’t miss out on important calls. Most SIM cards don’t charge to receive calls and making calls will be much cheaper than using your usual number.

Above all, remember that a vacation is really about spending quality time with loved ones, having time for yourself and to just rest. It need not be that expensive; you can rediscover your own environment by visiting places close to home, revisit your hobbies, pastimes, and sports. With a little careful planning, you can find a balance between having an enjoyable vacation and still keeping your finances in check. Happy holidays!

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