Yet while we're in this relaxed frame of mind, there's ample opportunity to waste money, so here's our round up of the top five expensive mistakes we make on holiday, and how to avoid them.
Buying currency at the airport
Most of us know airport bureau de change offer poor exchange rates yet continue to walk into this rip off by leaving it to the last minute. Get online up to a week before and you can easily get much more currency for your pounds.
Some agents charge for delivery – unless you're ordering large amounts of money. Travelex is one that doesn't charge for this service. It's worthwhile using comparison websites like moneysupermarket.com to compare services and rates. Always beware exchange services touting 0% commission, as they usually claw back the commission by offering a less competitive rate.
Last minute car hire
Booking car hire at the last minute or on arrival is a huge costly mistake. Limited supply means companies can bump up prices for walk-in customers, adding a sizable chunk of up to £250 to the cost of seven days hire.
Some of the real problems with car hire come from the additional charges that get piled on top of the initial fee. When you go to collect your car, read through all documents you're given before you sign them. Look out for what is and isn't included in terms of insurance cover and excess for damage. You may prefer to pay extra upfront to reduce this fee in the event of any damage but also watch out for guarantees on extras such as car seats.
Again failing to book ahead can cost you dearly when you need to park at the airport. Just rock up on the day and you'll have to pay £17.00 a day at Heathrow, or £115 for a week stay. But pre–booking reduces the cost considerable, one week at a long-stay car park would cost £75 on a supersaver deal. Private car parks offer even cheaper deals: take a look at airport-parking.co.uk, parking4less.co.uk and airparks.co.uk.
Consider if you can cut costs further by taking public transport or persuading a friend or family member to give you a lift. Cutting parking costs could mean an extra nice meal or fun activity while you're away so it's definitely worth saving if you can.
Card conversion catch
When using your card abroad either to withdraw cash or pay for a meal, you may be asked if you'd rather pay in the local currency or sterling. While sterling may appear more straightforward - always opt to pay in the local currency. If you choose to pay in pounds the charge is converted from local to sterling and back again.
Known as 'Dynamic Currency Conversion (DCC)', this may be helpful to see how much something costs in pounds, but the exchange rates will inevitably be poor rather than the rate set by Visa, Mastercard or your own bank. It's the cardholder's right to choose which currency they pay in and if a vendor tries to enforce DCC, you are within your rights to refuse.
Forget to haggle
Browsing markets and finding local treasures is a fun part of holidaying abroad, but you often run the risk of paying more than something is worth. Market traders often have different prices for locals and tourists, so be wary of accepting the first price offered.
It's always worth haggling and in some regions such as Asia and North Africa, you are supposed to barter – it's all part of the buying process. The golden rule is to start low and don't be tempted to pay more than your target price. With souvenirs, there will often be several traders offering the same product, so always shop around to see if you can find a cheaper deal elsewhere. Keep it friendly and polite, and know when to quit – the trader still needs to make a profit.