If you’re anything like me, you want your business to pay for life’s joyful moments, and that includes holidays. But you don’t want to get side-eyed by the tax man or accidentally tank your cash flow in the process. So here’s exactly how I’d use my business to pay for a holiday (yes, I’m using my dream Disneyland Paris holiday for my son’s birthday as an example) and fund it in a way that’s financially smart.
Step 1: Know Your Number
Before you start randomly throwing money into a “holiday fund” pot, you need a goal. For me, that’s £2,000. Why? Because I want to cover hotel, travel, insurance, food, spending money… and I like to overestimate so I’m not stressed about every pound while I’m away.
If your budget feels a bit “plucked out of the air”, just research it. Look up the hotel you want. Check travel prices. Think about meals, activities, and any extras. Your number should make you feel prepared, not panicked.
Step 2: Two Ways to Fund It
Once you’ve got your number, you’ve got two main options:
- Save from your salary – The classic route. If I wanted to save £2,000 in eight months, I’d put aside £250 a month from my owner’s pay.
- Use your business overflow – This is my favourite method. Overflow is what’s left in your business after you’ve covered expenses, taxes, owner’s pay, debt, and any other financial responsibilities. It’s your “extra.”
The beauty of overflow? It doesn’t touch your day-to-day income. It’s there for low months, investments… or holidays.
Step 3: Check If You Have Overflow (and How to Get It)
Overflow comes from having a healthy profit margin, and not bleeding that profit dry. If there’s no overflow, it’s usually because:
- You’re not bringing in enough revenue
- You’re overspending in the business
- You’re taking too much from the business for personal expenses
A healthy business pays for itself, pays you, covers taxes, and still has a buffer. If your buffer is non-existent, you either need to earn more, or spend less.
Step 4: Decide Your Safety Number
How much overflow is “enough” will be different for everyone. Some people want a month of business expenses saved. Others feel safer with three to six months. Personally, I’m fine with a smaller buffer because I know my numbers and my growth plan.
Your safety number should make you feel secure, not smothered. Once you’ve hit your safety number, any extra overflow can go to your holiday fund (or any other big goal).
Bonus Step for Limited Companies:
If you’re a UK limited company, there’s a fun little perk called Trivial Benefits. This lets you give yourself tax-free vouchers of up to £50 each (max £300 a year). Stack them up and use them for holiday meals, shopping, or treats. It’s small, but every bit helps.
The Bottom Line
There’s no right or wrong way to fund a holiday. You might save from your salary, you might squirrel away your overflow, or you might use both. What matters is that you’ve planned for it, your business can afford it, and you don’t end up resenting the trip because it left you skint.
Your business exists to fund your dream lifestyle… Fund the damn life!
Check out my podcast: Fund the Damn Life
Work with me: My services
Emilie x
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