Who does not dream of the perfect getaway? Whether it is an exotic destination, a place you have been meaning to visit, or just a break from the hustle bustle of your usual life, a vacation is usually the answer. Regardless of the destination, one thing that stays constant is the funds required to travel.
Usually, most of us plan for different goals such as buying a car, saving for child’s education, planning for retirement, etc. However, with the right financial tools and planning, the same approach can be used to plan your dream vacation too.
In this article, you will be introduced to simple yet effective tips that combine saving and investing smartly through SIPs, cashback cards, and budget planning apps.
Tips to plan your dream vacation
Start with a travel goal and budget
The first step of planning for a vacation is to determine the travel goal and budget. This helps create a detailed and realistic travel goal. Make a note of where, how, and when you want to visit along with the timeline and estimated cost. While doing this, be as detailed as possible and consider all factors including the cost of travel, stay, food, shopping, visas, insurance, and even contingencies.
Save and invest via travel SIPs
Once you are aware of your travel goal, the next step is to save. Instead of merely setting a sum aside monthly, consider investing in a Systematic Investment Plan (SIP).
A mutual fund SIP is an effective means to not only save but help your money grow too. Depending on the investment horizon, the returns obtained will vary.
The sooner you start and the longer is the timeline, the higher will be the returns obtained. For instance, investing Rs.5000 monthly for 24 months in an SIP delivering 12% returns might offer Rs.1.35 lakhs. On the other hand, saving Rs.5,000 monthly for 24 months amounts to Rs.1.2 lakhs.
However, while investing through SIPs, it’s important to understand that the returns are subject to market fluctuations and might vary from the projections shown by online calculators. While choosing a SIP, opt for one that considers your risk tolerance and financial goals.
Use credit cards smartly
Instead of shying away from using credit cards fearing debt, leverage them smartly. While traveling, you can make a significant dent in your budget by using travel credit cards, redeeming cashback and points, etc. For instance, some travel credit cards offer free lounge access, travel insurance, and discounted prices on hotel and flight bookings. If you don’t have one, consider opting for a credit card that offers accelerated travel points. Any accumulated cashback or points on the cards can be redeemed on flight and hotel bookings. At times, travel portals also offer better deals for certain credit cards. However, if you are using a credit card, don’t forget to make timely payments to avoid attracting high interest on outstanding amounts.
Leverage budget planning apps
Planning a vacation is always exciting but budgeting is seldom fun. That said, budgeting is extremely important to ensure you are on the right track. These days, a variety of budgeting apps can be leveraged to plan your monthly finances and not just to track expenses. Doing this increases financial awareness and helps develop financial discipline. By using these apps, you can establish a travel budget, monitor the costs incurred while booking your stay, tickets, etc, and helps plan properly.
Travel smart
Apart from saving and budgeting, consider a couple of travel hacks such as avoiding travel during peak season. This helps cutback on the overall travel budget. Similarly, consider booking early to reduce the cost of travel or obtain better deals.
Another travel hack is to always compare prices on different platforms and portals before going ahead with the bookings. While traveling, don’t forget to purchase travel insurance. This covers medical emergencies, flight cancellations or delays, and even loss of baggage. With a little planning and preparation, you can manifest your travel dreams into reality.
Conclusion planning
for your dream vacation needn’t be a stressful endeavour. Equipped with the right plan and strategy, you can smartly save and invest and avoid debt or dipping into your savings. From starting a SIP to using cashback credit cards and budget planning apps, these steps will help manifest your dream vacation into reality. So, start planning today to ensure your dream vacation becomes a well-planned financial goal instead of just a dream.
