Tired of merely liking the pictures of your favourite travel destination on Instagram? Do something more than that! Like going on a real vacation, maybe? Why not? Oh! We get it. Is your bank account stopping you from doing that? Worry not. All you need to do is—get your planning skills in place. Once you have it all sorted out, vacations won’t exist merely as dreams. You’ll get to live them for real. We know it sounds dreamy now, but read on. You’ll soon have enough ways to turn your dreams into reality.
Additional Reading: How Plastic Money Is Making Vacations More Fun!
A vacation doesn’t merely give you some time off from work and other monotonous things that life is made of. It also lets you get enough time to spend with your family and friends. What could be better than spending some quality time at your favourite destination with your loved ones, away from all the hassles of life? The thrill of visiting your dream vacation spot maybe!
Here are some tips to get your vacation finances in place:
Where? When? For how long?
Before jumping on to the planning stage, you need to get the basics in place. First things first, you need to know where you’re going. We all have a long list of dream vacation spots in mind, don’t we? You just need to choose one (for now). Which one to choose? That could be a little difficult. It’s like deciding whether to go with a tried and tested ice-cream flavour or trying something new. Plan according to your current financial situation. If you’re tight on cash, for now, stick to a domestic place rather than going international. Chalk out who all you want to take along on this trip. Deciding the duration of the trip is quite important too. Once you have all these basics in place, other steps of planning are easier to execute.
Do the math
No complicated equations, silly! But to plan your trip right and make it a memorable experience, you must plan your expenses beforehand. You can base your calculations on the location, and the activities you plan on doing. A domestic trip will cost you lesser than an international outing. But if plan on doing things like adventure sports etc., you must be well-prepared (mentally and financially). Based on the vacation spot, calculate the approximate boarding and lodging charges, the overall costs and other things. The idea is to know how much to save for before actually starting to save. While you’re doing these calculations, you must also run a quick check on your other expenses. You must know how much you can afford to spend on a vacation, right? It shouldn’t be a case where you go for a lavish vacation and come back to an empty Savings Account. If you’ve already spent a lot on other things like a car or that latest TV, you might want to reconsider your vacation timing.
Keep a track of time
If you’re planning a vacation in the month of December, you must start planning by July at least. It’s all about giving yourself enough time to save up. To save a decent amount for the trip, you’ll have to start putting some money aside some months in advance. Depending on your financial situation, it might require you to take some cost-cutting measures. If you start early, you can get enough time to save. Drop by drop you can break the rock, yo! If it’s just a short, domestic trip, you might not need to start saving much in advance. But if you plan on flying international, you better start building that money reserve early. You don’t want money issues bugging you later when it’s actually time to pack your favourite clothes and get ready to leave for the vacation, right?
Look for investment options
Planning a vacation might be a little difficult if you don’t know how to save up. In case you struggle with making your money grow and still want to go on that holiday real bad, maybe you should open a Recurring Deposit. With the auto-debit option in place, you don’t have to worry about that monthly contribution towards your ‘dream holiday’ fund.
If you’re planning your vacation a lot in advance, you can look at other investment options as well. These include investments that give better returns over the long-term. For instance, equity investments give you better returns compared to debt instruments. But since they’re a long-term investment option, they make sense if your vacation is more than 3 years from today.
As these investments give higher returns over the long-term, the amount you need to save on a monthly basis is also lower than when you invest in low yielding investments. In case you don’t have much time on your hands and are looking for a good short-term investment option, debt instruments make more sense. Although they’re the safer way out, the only drawback though is that debt instruments will give you lower returns. You can choose either (according to what suits you better).
— Adhil Shetty (@adhilshetty) May 23, 2017
Encash your investments on time
You looked for a suitable investment option, applied for it and got it too. Well, that’s not enough! You need to encash them on time as well. Sometimes, equity investments can become risky if you do not encash it till the last minute. It is always better to partially shift to safer debt investments as you approach the vacation date. What’s the point otherwise?
Finally being able to make your dreams come true is a feeling just out of this world! If your present financial situation is holding you back from living the dream, don’t worry. If you can’t afford that trip right now, doesn’t mean you can never take it. All you need to do is—start planning early. And planning is not enough. You also need to start taking efforts to put your plans in motion.
Another golden rule—don’t leave everything for the eleventh hour. If you want to live your dreams without damaging your finances, you must make other arrangements well before time as well. These include booking your tickets, checking for the availability of hotel rooms and most importantly, the best time to visit.
To make the most of your trip and make it an unforgettable experience, you must also make a list of things to do and places to visit there. A little research is all you need to rock that vacation, yo!
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