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Regular-article-logo Saturday, 25 May 2024

Vacation goals

Tips on how to plan your travel without stretching your finances

Arun Thukral Published 02.06.19, 08:07 PM
Carefully consider your current financial requirements to arrive at how much you can comfortably spend on travel.

Carefully consider your current financial requirements to arrive at how much you can comfortably spend on travel. (Illustration: Sezeryadigar)

Vacations are fun but they also cost money. Everytime you look at the pictures of friends travelling around the world on Facebook or Instagram, it’s hard to let go of them, especially if you are passionate about travel. Sure, backpacking across Europe or exploring the African jungles cost money, but there are ways to make such plans easier on the wallet. A little financial planning and research on alternatives can help you go on that dream vacation without any financial stress.

First define your travel priorities such as experiencing a different culture, learning more about history or taking a few days just to relax. Once you have decided exactly what you want from your vacation, you can focus on how to best achieve it. Here are a few simple steps for a budget-friendly travel.

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Decide on a budget

Making travel plans without a budget can be risky. In the absence of a budget, you might end up overspending without realising it. Carefully consider your current financial requirements to arrive at how much you can comfortably spend on travel. Try not to compromise on your savings and investments. Once you have arrived at a figure, stick to it. Shortlist your destinations based on your preference and budget. A quick online search will show you a number of destinations that you can explore within your budget while satisfying your wanderlust.

Plan in advance

Holidays should be planned as far in advance as possible. This gives a window for greater research and better deals. If one has got a flexible schedule, he can save a huge sum simply by travelling during the off-season.

Tourist seasons are different for different destinations. Travelling during the peak months or during holiday breaks could result in paying more for airfares and accommodation. Planning in advance also gives you time to save more for the holiday.

You can look at the following options to accumulate enough resources for your travels:

  • If you are a travel enthusiast, build a separate travel fund by setting aside a certain sum every month in this fund. Remember, this fund is over and above your savings.
  • Start a “travel recurring deposit” account to divert a pre-defined sum towards your travel fund as soon as you receive your salary.
  • If you have a specific destination in mind, say watching the Northern Lights in Norway, you can plan 3-4 years in advance, giving yourself ample time to leverage equity and equity products to gather sufficient funds.
  • You can invest in debt instruments for a vacation you are planning in three years time.

Deals & discounts

By planning a holiday in advance, you can use the time in hand to hunt for deals and discounts. You can save under the following heads by grabbing the best deals:

  • Transportation: Watch out for the airline ticket deals for your preferred destination. Midweek flights are generally less expensive. One can sign up for travel alerts from airline and travel websites. You can also convert some of your air miles to get a discount on your airfares
  • Stay: Compare the price of your hotel rooms on online portals to book them at the best rates. You can also explore non-traditional accommodations such as hostels, vacation rentals, etc. Staying in less popular places could be a good option once you have done an in-depth research on safety and accessibility.
  • Food & excursion: Do a thorough research to identify the places where you can get the best deals on food and excursion. Join travel forums or seek advice from your friends who have visited your holiday destination for tips. For local sightseeing, avoid renting a car or taxi if the city has a good public transport system. Ask locals about the distance to destinations and the best way to reach there. Buy passes/reserves before. Local tours are cheaper on spot and costlier online.

Smart money management

Apart from financial planning, managing your money efficiently can help you to avoid unnecessary expenses. Below are a few simple money management tips:

  • It is important to have your travel money split into different mediums like credit and debit cards, traveller’s cheques and cash to avoid any inconvenience because of any loss or technical glitch.
  • While travelling abroad, insurance becomes highly crucial as any health-related issues can cost you a lot in foreign land. Travel insurance is a relatively low, upfront cost that could ultimately save a lot of money in case you have to modify or cancel your trip.
  • While planning an international holiday, the exchange rate should be given due consideration. Any movement in the exchange rates has an impact on your budget. A smart move would be to go for a prepaid travel card. They offer you the best rates and protect you against fluctuations by letting you lock in the exchange rate before the trip.
  • The temptation to use credit cards is high while booking a trip for its ease and benefits like reward points and discounts. Be mindful of the amount you swipe on your card and ensure timely repayments to avoid penalties.
  • It would be advisable to refrain from taking a loan for travel. With some financial planning, you can avoid the need for a loan. In case you do end up going for a personal loan, make it a priority to repay the same as the interest rates tend to be high on such products.
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