As the holiday season draws closer, many people who prepared for the festive season are counting days to the kick off to the good side of life. Those who did not prepare for it have not been left out either. They are getting ready for it, in the last minute. Numerous advertisements by commercial banks and other loan providers is evidence that their is demand for credit by holiday goers. And this, I would say, is the group that had not really prioritized the holiday, but they have to go for it somehow.

Would you rather save or borrow for a holiday? Any answer in that case will be correct, because it all depends with how you handle your finances. Let us look at a few pointers on both sides that will have you decide which one of the two options is worth your hard earned shilling.

Borrowing for Holiday

People who go for holiday on credit usually use credit cards, take bank loans or  borrow money from family or friends. Those who borrow money to pay for their holiday say they choose the method as it enabled them to pay in installments.

However, the interest on any loans from the banks, short term or long term in Kenya as it is currently are high and repayment for the same will cost you more. Micro loans in Kenya currently charge up to 30% interest on loans for a maximum period of 30 days.

[Read: A quick comparison of payday loans]

Bank loans on the other hand take long to process and despite the Central Bank of Kenya lowering the Central Bank Rate to 11%, average lending rates for banks still remain as high as 21.5%.

Saving for Holiday

This is taken as a sure, painless method of enjoying a holiday. An individual, couple or group of people come together and plan for a holiday. They draw a budget and breakdown installments in which they will put monthly savings for the same. Some pointers to have an effective saving plan for a holiday will include;

• Pick out a destination affordable within a year's savings
• Draw a plan complete with a budget that allows for minor changes
• Open a fixed account, or a joint savings account for the project
• Maintain a constant installment or more to the kitty
• Book for accommodation in advance to avoid last minute rush and the cost that come with it.

Saving for a holiday, as opposed to borrowing for it saves you the pain of the dry spell that Kenyans go through in January when they have to pay school fees and other mandatory expenses.

[Read; January, What you really should be saving for]