Holiday savings vs mortgage overpayments?

peoplesrepublican

There is a quite a bit of detail in this post, but I am hoping that there will be some moneysavers out there who will enjoy pondering my dilemma and offering some advice.

Basically I have 2 children aged 1 (just) and almost 5, and I would like to take them (when they are both old enough to appreciate it) to SeaWorld in Florida. However, I also want to move in about 3 years, and so I want to pay as much off my current mortgage (capital & interest) as I can before then (to maximise profit on the house).

So the questions are:

1. What would be the best ages of the kids to aim for? ie before the oldest is too sulky to enjoy it, but not before the youngest is old enough to appreciate it.

2. How much money should I aim to save up, for (say) a 10 day holiday?

3. How should I split my money between saving up for the holiday and the mortgage overpayments?

4. Best type of account for saving the holiday cash in, eg fixed term bond vs monthly saver vs ISA vs something else??

Some figures:

Mortgage outstanding: £50K
Monthly payment: £350
Monthly overpayment: £150

The £150 is all I have to play with at the moment, however with a bit of luck I will get a salary rise in April, plus April sees the final payment of a £300 car loan so I will have at least £450 per month from then to use for this, and hopefully a bit more. I'm not planning on making any changes to my mortgage payments until then so that I know exactly where I stand, however any suggestions you lot can make would be greatly appreciated to give me an idea of what I'm doing from April.

Cheers in advance!

Finishrich

peoplesrepublican wrote:

1. What would be the best ages of the kids to aim for? ie before the oldest is too sulky to enjoy it, but not before the youngest is old enough to appreciate it.

I'd wait till the youngest is about 6, also worth checking their height as a number of rides have height restrictions usually around 48"

peoplesrepublican wrote:

2. How much money should I aim to save up, for (say) a 10 day holiday?

How long's a piece of string? You really need to think about have much you want to spend and go from there. Depending of where you stay you could pay from $400 - $4000 or more for 10 days, just for a room. Then there's tickets for the themeparks. Food, you can pay a few dollars or hundreds of dollars,depending on what and where you want to eat.

peoplesrepublican wrote:

3. How should I split my money between saving up for the holiday and the mortgage overpayments?

Work out how much you want to spend on the holiday and work back from there.

peoplesrepublican wrote:

4. Best type of account for saving the holiday cash in, eg fixed term bond vs monthly saver vs ISA vs something else??

If you're paying it in monthly then probably a monthly saver or cash ISA, one with the best interest rate.

bluenose1

Would you consider an offset morgage as your overpayments(savings) will then go off your mortgage interest and leaves you with the flexibilty of taking the holiday or leaving them in your account as savings.
When we are next due to remortage we are going to have an offset mortgage for this reason.