Movies, mushrooming holiday and travel agencies, the Internet and even our next door neighbour who just returned from an exotic holiday will tempt you to spend on your holiday lavishly year on year.
So, whether it is a road trip till Antarctica or flying to Corsica, we all have plans to travel around the world.
With increasing travel costs, it is important that you plan smartly so that you can have a great holiday that is not too heavy on your pocket. UAE banks have many unpaid loans because of unplanned travellers.
You will not want to follow this trend. You would like to preserve pleasant memories and experiences of your holiday. Proper financial planning can come to your rescue here. Let’s look into a few common mistakes committed in the absence of financial planning.
Many people make impulsive travel decisions. For the sake of excitement, you must do some instant holiday plans. It is ideal is to draw up your bucket list of where all you wish to visit in the next five years and keep adding more.
We have so many interesting places to visit in our vicinity and hence one can comfortably enjoy several short trips which last four days, three nights and then plan for longer vacations lasting 10 days to two weeks.
Taking off with your spouse alone may sometimes seem more romantic and be value for money too. All destinations may not attract your teen child and she/he has his whole life to visit Timbuktu.
Be clever when you plan finances
Once the bucket list of destinations is ready, determine the holiday expenses and set aside money for the trip. Fixing the holiday budget is a challenge that determines whether you will have one trip or three in a year.
Plan your trip cleverly such that you travel in trains and bus at nights and arrive at your destination in the morning and opting for hostel or service apartments will help you lower your overall trip expenditure.
Here is a trick that might work for all. One needs to know if your aim of travelling is sightseeing or a relaxing holiday. A relaxing holiday needs a comfortable hotel stay. It may cost a bit higher but will serve the purpose.
Early planning helps you save on holiday bookings. Mostly, we know ahead of which time of the year we travel. Mark your holiday in your iPhone calendar for the next five years. Remind yourself one to two months before the due date and you will never miss the early bird offers.
How much to spend on a holiday?
Based on your earnings and your monthly expenses, you can determine how much you can save towards your financial goals. This process begins with listing down all your goals first.
Next, this money needs to be allocated towards these various goals, be it your child’s education, buying a house or a car, planning for your retirement and also your vacation. Once you allocate money for the goals, you get an idea of how much can be kept aside for a vacation.
Have a separate holiday account. After allocating money for other goals, you will be able to decide if you can set aside the required amount for your vacation. Balancing savings with other priorities will ensure peace of mind and debt-free holidays.
Put this amount in an investment plan in liquid funds so that you have instant access to it and you can also earn the best return on your money while saving for that dream holiday. Unfortunately, we may not have any liquid plan in this part of the world.
Travelling is a goal that is repeated every year. The experiences you earn from travelling are worth much more than what you spent on it – being amazed by nature, those adrenaline-pumping adventures, your child’s joy from visiting various places, experiencing different cultures and geographies. Those moments are priceless and last a lifetime.