How We Pay Cash for Every Holiday
9 Mar, 2025
In January 2025, we flew from Queenstown to Sydney, stayed two nights, and boarded the Royal Caribbean Ovation of the Seas for an eight-night South Pacific cruise.
Today, I’m sharing our exact costs and how we paid cash for this holiday and every holiday we will take in the future.
Generally, when you tell people about your travel plans, they are excited for you, but most people I talk to about our cruise say, “I could think of nothing worse than being crammed on a ship with so many people”!
Don’t knock it until you have tried it!
For the record, I like people, and we LOVED it. This was our third cruise, and while we don’t have another one planned, I’d certainly consider it.
We sailed with 4,182 of our friends, plus 1,550 incredible crew, all spread out across 16 decks. That’s only 358 people per deck, and considering the ship is 348 metres long and packed with things to do, food to eat and scenery to enjoy, it didn’t feel that crowded to me. You can be as hectic or relaxed as you want; for an active relaxer like myself, it’s my kind of holiday.
This blog post is not to convince you to book a cruise but to show you that if you have a holiday in mind that you want to take, I can help you make sure you have the money to pay for it. I could think of nothing worse than slapping a holiday on a credit card or ‘on the mortgage’ and suffering the consequences of that decision months or years after the holiday glow wore off.
Travel is expensive, so it's essential to plan well in advance. Through the blog, I’ve met many people who travel with cash, and I’d love to hear their tips in the comments below.
I’ll explain how we go about it.
Step 1 - Put money aside
PocketSmith tells me we spent $20,692 on national and international holidays in 2024.
We paid cash for all of this travel by setting money aside weekly and taking income from our ETF investments. Last year, I wrote a blog post explaining this, Applying the 4% Rule. We are selling!
The second you think you might have a holiday, I encourage you to start saving for it even if you don’t yet know the specifics. You can work those details out later, but it is far harder to magic up some pūtea to pay for it.
For years, we have had a Sinking Fund called “Holidays.” This is a separate bank account with its own suffix. Every dollar is exclusively earmarked for holidays. We do not spend this money on ANYTHING else. Every Tuesday, $100 is automatically moved from our cheque account to our Holiday account, building to $5,200 per year. This gives me a jump start on having money set aside, and once a year, I add a lump sum from our investments.
If we couldn’t draw an income from investments but knew we could afford to spend $20,000 in the coming year, I would increase the weekly transfer to my Holiday Sinking Fund to $385 ($20,000 / 52 weeks).
Step 2 - Price up your trip
It is all well and good to save up for a holiday, but we need specifics. To know how much to save, you must know what you will likely spend.
Start researching destinations, airfares, accommodation costs and all the incidentals that will crop up along the way.
I’m very fortunate that Jonny likes to research this stuff. If left to my own devices, I think I would use the services of a travel agent a lot more than we do. When we floated the idea of taking a cruise, I asked him to give me a semi-accurate total cost, and based on his research, he came up with $12,000.
These are the areas that he priced up long before departure:
Deposits required to secure our cruise booking
Return flights from Queenstown to Sydney
The date that the final full payment of the cruise is required
Travel Insurance
Two nights' accommodation in Sydney
Buying food before and after the cruise
Spending money + emergency money for the unexpected
Additional costs to consider are airport parking, accommodation close to the airport, replacing expired passports, visa costs, car rental, public transport, specific sightseeing excursions, pet sitting costs, etc.
Step 3 - Start booking and paying
With a realistic budget now in place, we worked together to ensure that we would have the correct amount of money available when needed.
Every week, $100 was added to our holiday account, so the money was available each time something needed to be booked and paid for. In May 2024, using income from our investments, we topped up this account so Jonny could begin booking anytime he needed to.
We would not usually book a trip so far out, but we put down our $300 deposit for our January 2025 cruise in June 2023! Cruising is popular, so you have to secure your booking early. But oh boy, was it a LONG wait.
When good flight deals came up in May 2024, we booked and paid for them along with travel insurance.
In October 2024, we paid the balance owing for the cruise and a two-night stay in a Sydney hotel. We also decided to add a few extras to the cruise (e.g., a Wi-Fi package).
A month out, we also added a one-night stay in Queenstown, given that we had an hour to drive and a 7 a.m. flight. Given the time of year and our late booking, we paid a small fortune—$450—for this single night! However, I felt OK doing this because we had a $12,000 budget for the entire trip, and even after booking this, we were still tracking under budget.
Step 4 - Prepare to pay cash while on holiday
You must be prepared for daily expenses when travelling. Be realistic.
We have used a Wise debit card for our international trips now. It lets you convert NZD into the currency of the country you are visiting. Jonny looked at exchange rates and transferred the spending money we had allocated onto the Wise card in readiness. In our case, we were only going to Australia, but this is even more useful when we travel further afield.
Jonny had a physical Wise card (in case he lost his phone), plus we each had a digital card in our digital wallets on our phones so we could tap on and off public transport and pay for goods in-store. Our daughter had her own Wise card (our daughter is under 18 and unable to have her own Wise account, so we set up an additional digital card for me that she could use) so that she could manage and spend her own money.
Jonny’s Two Cents
Jonny here—Ruth asked me to share my experience with Wise for those who’d like to know more. Before choosing a Wise card, I did plenty of research to make sure it was the best option for our travels. Since then, we’ve used it regularly and recommended it to several people, even helping friends set up their own accounts. So far, everyone has found it just as handy as we have.
We signed up for the Wise debit card, paying $14 for a bright green physical card. You don’t need to get a physical card if you’d rather use the digital version on your phone, but I wanted one so we could get cash from an ATM and as a backup in case I lost my phone. Once your identity is verified, you can start using the virtual card immediately without waiting for the physical one to arrive.
To load money, we transferred funds from our Holiday sinking fund to Wise, and within a few hours, the money appeared in our Wise account. We then converted NZD to AUD, locking in the exchange rate and then, like Wise says, “you can spend like a local”. Wise is a better option for us when travelling overseas because they offer low, transparent fees and use the mid-market exchange rate with no hidden markups—unlike our bank. For example, converting $2,400 NZD to AUD with Wise cost just $5.27 NZD, whereas our bank would have charged around $45 NZD.
I also added the card to my Apple Wallet (Android users can add it to Google Pay) for easy, contactless payments, which was especially useful for tapping on and off trains, trams, and the metro in Sydney. Another big advantage of Wise is the ability to have three digital cards at a time. This meant Ruth and our daughter could also have their own digital card in their Apple Wallets, linked to our account, allowing them to make purchases with their phones.
We knew we would need some cash on the cruise, so we also withdrew some cash from an ATM. You don’t pay any Wise fees for cash withdrawals from ATMs up to NZD $350 per month.
Since our daughter is under 18 and unable to have her own Wise account, we set up an additional digital card under Ruth’s name, which our daughter could also use. This way, she had her spending money loaded onto her phone and could pay just like we did.
Overall, Wise has made overseas travel simpler—we think the Wise card is great! Plus, any leftover money can be spent at home like a regular debit card or easily transferred back to your bank account.
If you are considering an alternative debit card for travelling, CLICK HERE to learn more.
Step 5 - Go on holiday!
So excited was I to hit the road, and given we had a night's accommodation in Queenstown booked, we decided to be tourists in our own country for 24 hours. We left home early and took a tiki tour to Queenstown via Wanaka. We had lunch on the waterfront and stopped at a few tourist spots as we drove over the Crown Range, then through Arrowtown, and onto Queenstown for dinner. For the full touristic experience, we had Ferg Burger, of course.
Already in holiday mode, we flew to Sydney early the next morning and had the best time.
Our holiday was brilliant. It was not long enough (they never are), but everything went as it should, and we focused all our energy on enjoying ourselves rather than worrying about logistics or money.
I want you to understand how good it feels to know that everything that could have been paid for in advance was paid for, and anything that needed to be paid for could be. Plus, we had the backup of an emergency fund, just in case.
Breakdown of costs
Prior to leaving, as every transaction came in, I categorised it as “Holiday” in PocketSmith. I also gave each expense a specific “Royal Caribbean Sydney” label. I do this for each holiday, so I know EXACTLY what we spent for each trip.
Below are the costs of our twelve-day, 11-night trip for three adults.
Costs:
Eight-night cruise - $5,200
On-board extras - $800 (soft drink package x 1, internet package, ship tour, shopping)
Flights - $3,280
Sydney Hotel - $550
Travel Insurance - $276
Queenstown Hotel - $450 (given the time of year, this was the cheapest we could find!)
Queenstown Parking - $105
Spending Money - $1,350 (this included on-shore dining and shopping)
TOTAL COST: $11,961
We spent an average of $996 per day, and in the words of Jonny, he said, “It’s probably not too bad, we had a good time”. Indeed, we did.
Given that we like holidaying but not shopping, we overestimated how much we would spend. We moved this money back into our Holiday Sinking Fund when we returned home.
The best travel advice I can give you
A lot of the enjoyment of travel comes from the anticipation of it. It can often be a comedown when it is over. It was a shock to the system not to have a full buffet at every meal once we got home! This is why I suggest you always have your next trip planned before you finish your holiday. It gives you something to look forward to and allows you to save.
Owing to the cost of travel and the fact that we have a Year 13 school student for which this final year is super important, we are likely to keep things local in 2025. We’ve already booked and paid $770 for flights to Stewart Island in April, which gives us something to look forward to. And we are throwing ideas about for a top-of-the-North Island camper van winter trip in the July school holidays. Given where we live in Te Wai Pounamu, we really should be exploring more of our own backyard too, so we are keeping an eye out for some local trips and deals.
In the meantime, $100 a week trickles into our Holiday Sinking Fund bank account, and we will top it up again in May when we sell off 4% of our investments. A Holiday Sinking Fund is a gift that keeps on giving.
Start a Sinking Fund today!
Budget and set one up for an amount you can manage, whether it be higher or lower than mine. It’s irrelevant how much I save and spend; you have to come up with a weekly figure that works for your budget:
$10 a week is $520 a year
$50 a week is $2,600 a year
$300 a week is $16,600 a year
You do you, and with a little bit of interest being earned, it all adds up.
Choose your time frame. It might take you years to save, and that’s OK.
Now, you can start to dream and plan because you know you have a destination in mind, and you know the costs.
I have several Sinking Funds running for specific things at any given point in time. This means that when I see my “Holiday” Sinking fund, I get excited, knowing that something fun is on the horizon. I also feel a sense of accomplishment and calm, knowing that, yes, we can afford to take this trip because all of our other money needs are being met as well.
That’s financial freedom in action.
