Over the past few years, work cultures around the world have been scrutinised to emphasise the need for a work-life balance. While still many of us feel guilty over asking for leave unless we are sick, many of us believe that we deserve to spend the leaves we get—and that is the category of people who are nailing it! We need breaks to rejuvenate and a good vacation can help us do exactly that.
Travelling can help break the monotony of a routine and save you from burnout. It can do so many things, depending on what your soul is seeking as you let wanderlust take you over. While travelling remains a romanticised concept, we can’t ignore the practical side of it all. Spontaneity is cool but have you ever tried planning a holiday, saving for it and finally being on the trip, absolutely worry-free?
If you haven’t, it’s time to start adulting and take trips that won’t make your finances go berserk. Here’s how you can financially plan for a holiday in advance.
Set a budget and then pick a destination—not the other way around
We often tend to first pick a destination and then arrive at a budget, diving into our travel plans with our hearts first. Meghna Jaisingh, a chartered accountant and financial advisor says this can throw your finances out of balance. “Take into account your income and expenses before you decide on a budget for your next trip. Your cash inflow and outflow can help you zero down on a number that doesn’t leave you in debt once you return from your trip,” Jaisingh explains.
Once you have set a budget for your trip, decide on where you’d like to go. You can then choose how much you’d like to spend on transportation, accommodation and activities, depending on your priorities.
Research thoroughly and get an estimate
“What most people end up doing is they account for flight or other transportation tickets, and accommodation—and leave other expenses out,” Jaisingh points out. “This is precisely the reason many of us end up far exceeding our holiday budgets.”
It’s essential to draft an itinerary and conduct thorough research on the places you will visit to check for how much you’re likely to spend on your trip. “Account for activities, meals, visa charges if any, entry charges and internal commute. And then keep some money aside for emergencies,” Jaisingh advises. “Keep your credit card for emergencies only. Take a forex card instead,” she adds.
Make a vacation fund at least six months in advance
If you’re going for a vacation that will require a good amount of money, it is better to start saving for it way in advance. You will be able to maintain a comfortable lifestyle while also saving up a good sum.
“You should start keeping a tab on flight and accommodation costs at least two months in advance. That will help you get a good deal and maybe even an early bird discount if going for a trip package. This requires you to have saved up enough to pay for the deals when the iron is hot,” Jaisingh explains.
Make a savings account, especially for your travel plans. You can continue maintaining it, even after the trip, for the vacations to follow. This way, you will be able to stick to your monthly saving plan, and not dip into it for impulsive buys. Automating the transfer is even better!
Cut down on your expenses
Saving up for a vacation may seem difficult, especially when your heart wants to make that impulsive buying decision or if retail therapy is always your go-to when you need a mood-lift. But each time you control the urge to spend unnecessarily, think of what you can do on your vacation instead.
We tend to spend a lot of eating and drinking out, so making meal plans and eating at home, before you go out, will save you a lot too. Identify your spending patterns and then cut out expenses that do you no good.
Book it on time—but keep things flexible
Being flexible can take you places, sometimes, quite literally. Often, there are unforeseen discounts and deals, and if those are for a place that is probably not first but still there on your travel bucket list, go for it. Opting for flexible fares and checking the cancellation policies will minimise the financial impact in case of unforeseen circumstances.
Whether you choose to change your destination or stick to the original plan, it is important to make the bookings on time. It is a myth that if you book way in advance, things will be cheaper. The timelines matter. If a holiday sale is likely to be around the corner, take the opportunity. Also, you can track on which days your preferred flights and hotels offer discounts, and you can make the bookings accordingly.
Also Read: How To Financially Recover From A Vacation