6 spending mistakes that will burn through your holiday budget

After two years of Covid restrictions, many are looking forward to a well-deserved holiday in 2022. But that doesn't mean you should see your hard-earned money go down the drain on avoidable expenses. By side-stepping these common spending errors, you can get the most out of your holiday budget.

Forward planning is key to making the most of your time and money abroad. If you already know what you want to see and do while you're away, you can find the most cost-effective way to go about it, in advance.

From splurging on tourist passes to paying extra to sit together on the plane, here are six costly mistakes we've all made abroad (and how to avoid making them again).

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1) Paying extra to sit together on the plane

Paying extra to sit together on the plane is a waste of money (unless you're flying with Ryanair).

It could cost a group of four people as much as £192 to reserve standard seats together on a return BA flight. But our latest research shows that's money down the drain, as 95% of short-haul passengers who didn't pay extra said they were given seats together anyway.

BA and Jet2 told us that they will always sit groups together if there's space. And easyJet said its 'sophisticated algorithm seats people together more than 99% of the time'. So why are we being charged for something we will almost always get free of charge anyway?

Some airlines would have us believe it's because people might want to sit in a specific area of the plane, but nearly two thirds of those who paid for seating told us they did so to either sit with companions or avoid being next to a total stranger - understandable in the midst of a global pandemic. As BA told us, people prepay for seats 'as it gives them additional peace of mind'.

But only Ryanair passengers need worry. Of the four major airlines we looked at, the budget airline is the most likely to split up passengers around the plane if they don't pay extra for an allocated seat. We asked Ryanair if this policy was consistent with its measures to prevent the spread of Covid-19 but it said: 'passengers have the choice at all times of reserving their preferred seat if they so wish.'

Booking flights? Find out who the best and worst airlines are.

2) Booking car hire too late and 'paying on arrival'

In normal times, we'd advise booking your car hire around two months before your holiday to get the best rate. But with such a huge increase in demand now travel restrictions are easing, brokers have ramped up their prices and the later you leave it, the more you'll pay.

To give you an idea, car hire prices are already 53% higher for Easter and 57% higher for August than pre-pandemic, and they're only going up.

We also advise you to avoid 'pay on arrival' options, as some unscrupulous companies could choose to cancel and take a more valuable booking as rates rise, leaving you with no car on holiday. Make sure you 'lock in' your booking either by paying in full when you book or choosing a company which takes a deposit and guarantees the booking (like WRP Zest Car Rental).

Which? vets car hire companies and brokers based on customer experience, pricing transparency and behaviour during the pandemic. Find a car hire provider you can trust.

3) Paying in sterling (and using the wrong card)

Always pay in the local currency to avoid being hit with worse exchange rates and check to see if your bank charges you for using your card abroad.

Santander, for example, charges a 2.75% transaction fee, plus a £1.25 purchase fee on everything you buy overseas which soon adds up. Even some cards which offer fee-free purchases will charge you if you take money out at a cash point overseas.

Before you go, find out if your regular debit or credit card is one of the few which don't charge for spending abroad. Which? recommended provider Starling Bank is fee-free for overseas purchases and ATM withdrawals, as is Halifax Clarity, Barclays Rewards and Monzo. Credit cards also offer legal protection.

If your bank does charge you for spending abroad, consider getting a pre-paid card. With these you transfer money to them before travel and avoid fees when paying abroad. We've reviewed several pre-paid travel cards to help you find the best one for your trip.

4) Splurging on tourist passes without doing the maths

Calculate how much sightseeing you will realistically fit in before buying a tourist pass, as you may not get your money's worth. Whether you're travelling solo or as a family with young children, it always pays off to do the maths and plan your itinerary beforehand. See our example for Rome sightseeing below.

Is it worth buying a tourist pass for Rome?

For u20ac129 (£108) per adult (u20ac59/£49 for children aged 6-17), a 72-hour Omnia Card and Roma City Pass package gives you entry to four Vatican City attractions, free entrance to your choice of two out of more than 30 other sites, and discounted entry (between 17% and 53%) to many others after that. Also included are a three-day hop-on, hop-off bus tour and a 72-hour travelcard for Rome's public transport for adults (children travel free anyway).The pass also offers other perks such as fast-tracked entry or an audio tour at some sites. Bear in mind you can only visit each site once using the pass.

Is it worth it? Realistically, you will probably only see two sites per day if you want time to soak them in and stop for a leisurely lunch in between. On that score, you would visit six sites using the 72-hour pass, so it could be cheaper to pay as you go. Say you visited all four of the Vatican City sites and chose to use the two most expensive sites on the list of places you can use your free entry on (The Colosseum, including Roman Forum and Palatine Hill and the National Museum of Castel Sant'Angelo), it works out at £71. Add on the hop-on hop-off tour for £26 and that's £91, a saving of £17; even more if you use public transport, which costs £1.25 for a single ride (free for children).

Most Roman museums have discounts for children, students and OAP's, so the children's pass for u20ac59 isn't great value. And if you time your visit for the last Sunday of the month, entry to the Vatican is free (a saving of £13).

Our verdict: All in all, the pass offers decent value if you think you'll max it out and want to fit in as much as possible, especially if you will use the three-day sightseeing bus ticket and public transport card to get around. However, if you know what you want to see and you're likely to stick to that, it may be cheaper to pay as you go (as well as looking out for free entry days).

5) Visiting attractions at peak time

It might be more convenient to see where the day takes you and tour the sights as and when you please, but time it right and you could even get free admission, saving up to u20ac16 per person - not to mention less crowds.

Many Paris museums offer free entry on the first Sunday of each month, including the Louvre (saving u20ac15), while entry to the Vatican museums (u20ac16) costs nothing on the last Sunday of the month. You can even book a free audience with Pope Francis every Wednesday morning (papalaudience.org/tickets). Dodge the ticket price at Schindler's Factory in Krakow (u20ac5) on Mondays - excluding the first Monday of the month when it's closed. And Madrid's Prado museum (u20ac15) is free every evening from 6pm-8pm (Sundays 5pm-7pm).

6) Assuming rail passes are cheaper

Train travel is the ideal way to see lots of a country or region - and it's more sustainable than flying. With an interrail pass, you get unlimited travel on most European trains. But it's worth planning your itinerary and doing the maths before you buy.

In many cases, unless you're under 28 and have the discounted youth pass, you're better off booking each train journey online around three to four months in advance. But if you want flexibility and you're likely to cover a lot of ground, then the interrail pass could offer better value.

Is it worth buying an interrail pass?

In some countries such as France, Italy and Spain, it's mandatory to pay a reservation fee which isn't covered by the interrail pass. A journey from Paris to Amsterdam, for instance, could cost you an extra £25 for the seat reservation on top of what you've paid for your interrail pass. Say you've got the cheapest 'Global' pass (£205 per adult for four days within a month), that works out at £41 per day. If you're only using it to travel from Paris to France that day, you'll essentially pay £66 for that trip. When we looked at booking that journey three to four months in advance online, tickets started at £30 (£57 for fully flexible).

On the other hand, on a journey such as Amsterdam to Berlin (where seat reservations aren't mandatory), it could work out more cost-effective using the interrail pass. On that same Global pass, this six-hour journey costs you £41. When we looked at booking online three to four months in advance, the cheapest ticket was £87 and offered no flexibility.

It's also worth noting that the interrail pass does offer you the flexibility to change course, say Covid restrictions change in one country and prevent you from travelling there. If you are booking tickets from point-to-point make sure the lowest priced one isn't at the cost of getting a refund or exchange.

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