Cutting back on the basics to pay for essential luxuries

More than half of Brits consider a holiday a 'lifestyle essential,' and they're prepared to cut back elsewhere to pay for it.

Times are tough, but 51% of Brits still see an annual holiday as an essential part of their lifestyle.

And holidays aren’t the only ‘lifestyle essential’ which many people refuse to give up. Look at this table:

Top five UK ‘lifestyle essentials’

	Lifestyle essentials	Percentage of people who consider it a lifestyle essential	% increase in spending between year to August 2010 and year to August 2011
1.	Holidays/weekend breaks	51%	3.5%
2.	Meals out in restaurants	36%	4.3%
3.	Cultural events (theatre etc)	22%	0%
4 =	Nights out in pubs/bars	21%	4.5%
4=	Trips to the cinema	21%	0%

Source: LV= ‘Lifestyle Inflation Index.’

The really striking thing is that Brits have even managed to find the money to increase their spending on holidays over the last year.

So where are they finding the cash? Well, according to LV=, your average Brit is cutting back on some of the real basics of life to pay for their ‘lifestyle essentials.’

Here are the most popular cutbacks:

47% of folk are buying cheaper food and/or own brand food
36% are buying clothes and other personal items at cheaper shops
33% taking their own lunch to work
21% growing their own fruit and vegetables
18% buying clothes and other personal items second-hand

Are your priorities similar to the above? If your annual holiday is your No1 priority but you’re not sure if you can find the cash, then budgeting could be a very useful addition to your financial armoury.

Start by monitoring how you spend your money over a week or longer. You should then be able to find some areas where you could cut back. Then draw up a new frugal budget and stick to it. Once you’ve done that, you’re almost on the plane already!

And if you think you need some help budgeting, check out lovemoney.com’s fantastic free budgeting tool: Tracker.