Are You Willing To Forgo Anything For Your Holiday?

Uncertain FutureMany of us who’ve not been away due to the COVID pandemic are desperate to get away for some summer sun. Surveys and reports in the media suggest a surge in holiday bookings as demand returns to pre-pandemic levels despite household finances facing a squeeze from surging inflation. Tour operator TUI reports that summer bookings are up by 19%.

Holidays can help with anxiety and stress-related problems by giving us time to relax, have downtime and allow us to use the time to find solutions to problems.

Holidays enable us to catch up on much-needed sleep and rest. Whilst we are sleeping, our brains consolidate information and memories from the day, which improves our mental functioning, problem-solving, memory and creativity.

Holidays boost relationships with friends and family. You get to spend quality time with partners and children, strengthening social bonds. Time with your kids also increases their self-esteem and sense of security and enriches family values.

However, for some, the urge to escape and get away, hoping that the life you left behind will improve on their return, can come at a cost.

Brits Spent up to a Quarter of their Annual Disposable Income on Holidays each Year

Nationwide Building Society’s published spending report revealed that Brits spent up to a quarter of their annual disposable income on holidays each year. Many seem to have no desire to restrain this spending. On average we spend £855 per person each time we go away, then there’s 23% who spend £1,000 or more each holiday, and a family of four could end up paying £3,240 per trip and up to £6,840 in total.

Figures are taken from the online website Moneyfacts reports that the UK’s annual median disposable household income is £31,400. The cost of holiday spending can take up to three months’ worth of income, or a quarter of the expenditure. Disturbingly, not everybody has this money to hand.

As a result, 22% reported that they had to borrow the money to go on holiday, including using a credit card, taking out a loan or borrowing money from friends or family members. Contrastingly, 43% managed to pay for their holiday using savings, while 35% used cash from their bank account, and 11% were lucky enough to have family members to finance their holiday break.

88% of those who had to borrow money said that this was the only way that they could afford to go away. With the average Brit then taking three months to pay off this holiday – and 11% even taking more than six months.

Yet over half (51%) of respondents said they weren’t willing to forgo anything for their holiday.

That’s not all 61% overspend by £250 and 11% overspend by £500 or more.

Then there’s an additional 20% who don’t set a budget, who might still regret spending more than their bank accounts can bear. Undoubtedly, money is one of the most significant holiday regrets, with 25% feeling they had spent too much money. 21% said they didn’t have enough money to enjoy themselves, and 20% thought their holiday was too expensive.

Loss Aversion Theory

One of the drivers behind our behaviours and decision making could be linked to the loss aversion theory. Loss aversion is a concept that people hate losses more than they enjoy gains.

A cognitive bias that describes why, for people, the pain of losing is psychologically twice as powerful as the pleasure of gaining. The loss felt from money or any other valuable thing can feel worse than gaining that same thing. Studies demonstrate that it impacts our judgement, preference, and decision-making process.

Wellbeing activities don’t have to cost you the earth. Many of us know the benefit of regular exercise, walking, meditation or participation in numerous leisure pursuits, pastimes and hobbies.

Imagine the delight of planning a holiday not because you need to catch up on much-needed sleep. You’re suffering from anxiety or spending time with the family because you haven’t seen them due to work demands.

The outcome of your time away is much more rewarding when you regularly invest time and money and prioritise your mental health and wellbeing.

If you’re currently suffering from emotional overwhelm due to the rise in the cost of living or are worried about an uncertain future, or you need help to improve your confidence and are not sure where to go.

Send an email to enquiries@mikelawrence.co.uk, and I’ll send you a free guide on what to incorporate into your daily routine. Or contact me at 01142 670 081 for a complimentary 40-minute wellbeing review, and I’ll share with you tips that can transform your health and wellbeing when you implement them. Remember, ‘If you do not make time for your wellness, you will be forced to make time for your illness’.