How to budget for a family holiday

A realistic family holiday budget covers 5 main areas - and it’s easy to underestimate at least one of them.

Flights, trains, ferries or fuel are usually the biggest single cost. If flying, factor in luggage fees and seat reservations, along with airport parking or transfers. For trips to Europe, flights and hotel packages can offer better value than booking separately.

Whether you’re looking at holiday accommodation for families, a villa rental, a hotel or a campsite, the nightly rate is just the start. Many properties charge extra for linen, cleaning, cots, or additional guests. Group accommodation - where multiple families share a house - can reduce the cost considerably and often works out cheaper per head.

This is commonly where holiday budgets fail. Eating out for every meal with a family can add up very quickly, even if the menu prices are cheaper than back home. A simple way to keep costs down is to plan a mix of self-catered meals, supermarket picnic lunches, and one or two meals out each week.

Theme parks, water parks, boat trips, guided tours, and kids' clubs all add up. Getting the most from your money on a family holiday, often involves planning activities in advance. Many things are cheaper when booked online in advance, rather than on the door.

Day-to-day spending - ice creams, drinks, souvenirs, sun cream, the odd taxi - is something most families underestimate. The costs are small per item but stack up over a fortnight.

And importantly…

We offer a range of travel insurance to suit different trips. Buying travel insurance in advance could help protect you from unexpected costs before you travel, and while you’re away.

There’s no single answer - costs vary hugely depending on where you go, when you travel, how many of you there are and what you like to do. That said, it helps to work out what you want to spend on your trip in advance.

City breaks often cost more day to day than beach resort holidays in destinations like Greece, Portugal and the Canary Islands, where package deals can offer better value.

The average price of a European family holiday also depends on when you book. Peak school holiday periods (late July and August) cost much more than the ‘shoulder seasons’ of March to May and September to October.

A rough guide is £40-£80 per day for a family of four for spending on drinks, snacks, ice creams, and cheap activities, (on top of your accommodation and main meals budget). In more expensive cities or resorts, allow towards the higher end.

For a week's European holiday for a family of four, total costs (including flights, accommodation, food, activities and spending money) typically range from around £2,500-£6,000 or more depending on the destination and how you choose to travel. Last-minute deals can reduce this, but school holiday times may increase the price further.

Ideally, start your budget planning at the same time as your initial research - before you book anything. This lets you set an overall limit before you start to pay for things. Many families find that working backwards from a total budget - say for example "we want to spend no more than £3,500 all-in" - helps make clear decisions about where to spend and where to save.

Start with a simple list - there’s no need for a fancy spreadsheet. The most effective family holiday planning begins with writing down each category of spending and setting a rough amount for each one.

Fixed costs are things you’ve already paid for, or can get a price for, like flights, accommodation, travel insurance and car hire. Get these nailed down before you think about anything else.

Work out a realistic daily spend per person for food, activities and little things. Multiply this by the number of days you’re away, then by the number of people in the group. Be honest - most families spend more per day than they think they might.

Build in a contingency of 10-15% of your total budget. Things go wrong on holidays. Unexpected pharmacy trips, a rainy-day activity, a taxi because someone’s tired - you can be sure something unplanned will happen.

Once you have your total budget, split your spending money into a daily allowance. Knowing you have £60 per day for a family of four to cover food and extras makes it much easier to make decisions in the moment - rather than trying to mentally track everything at once.

Both cash and card have their place on a family holiday - the trick is knowing when to use which.

Cash tends to work better for smaller, everyday purchases: a round of drinks at a beach bar, a market stall, a local taxi, tipping restaurant staff or a tour guide, and in smaller towns or country areas where cards may not be accepted. In many popular holiday destinations, smaller businesses still prefer or only accept cash for transactions under a certain amount.

Card is more convenient for larger purchases like hotel bills, car hire deposits, supermarket shops and booking activities online. A credit or debit card also gives you better consumer protection for bigger spends.

The most practical approach for most families is to take a mix – enough cash to cover your day-to-day spending and small purchases, with a card available for larger transactions and as a backup.

Bonus tip: use our Multi-currency Cash Passport Travel Money card for all your spending. Using a travel money card can help you avoid foreign transaction fees that some bank cards may charge, which may help reduce overall spending while travelling.

Overspending on holiday is almost always driven by small, unconsidered purchases rather than one big mistake. Here are the most effective ways families can stay on track.

Whether it’s a pint in Prague or patisserie in Paris, get a feel for how far your travel money might go with our foreign currency guides.

You can order your holiday money easily online with Tesco Travel Money. Or pick it up in-store with the weekly shop.

To learn more about taking cash abroad, take a look at our guide - Why you still need travel money abroad.

Exchange rates may vary during the day. Rates will vary whether you're buying in-store, online or over the phone. They'll also vary depending on whether you're buying cash or a prepaid currency card.

We buy back most currencies we sell in most banknote values. Excludes closed currencies.