The most fun moments are unplanned and spontaneous—be it a weekend road trip with friends or a long distance travel to another country. You may reminisce about several occasions in the past. However, spur-of-the-moment travel plans can burn a big hole in your pocket. Unless you have really deep pockets, you need to plan thriftily for that dream vacation.
When you plan a few weeks or few months ahead, you get a huge cost benefit—cheap flights, discounted hotel stay, early-bird offers, and what not. Apart from this, planning your itinerary will ensure that you make best use of your time. At the end of it, you will be satisfied that your money was well spent.
However, merely planning your trip and booking tickets or hotel stay in advance may not be enough if the aim is to make your trip economical. You need to save and invest every month to be able to finance your vacation. This will lessen the burden of paying for vacation at the last minute. Returns earned on your investment will help fund out of pocket expenses.
Foreign tours cost more and may put strain on your finances if not planned properly. Cost of trips to Europe and the United States start at around Rs 6 lakh for a family of four. Touring within the country is not cheap either and proper planning is required.
To ensure a smooth ride, you need to:
- Finalise your travel plan and estimate the budget
- Calculate number of months / years left
- Inflate the budget using appropriate multiplier (costs associated with trips go up every year)
- Calculate the amount that you can spare every month
- Choose suitable investment avenues to earn desired returns
- Ensure you encash your investments on time
While banks may lure you to take a personal loan to fund your dream vacation, the EMIs may only add to your debt burden. With the interest included, your dream vacation may turn in to a costly affair. In case of emergency spending, you may always use your credit card. Some banks allow you to convert large spends into EMIs if required.
PersonalFN has listed down five points that can help you take a vacation that fits your budget.
Therefore, while planning a vacation can help you reduce costs significantly, the five methods above can help you further reduce your costs. Many of you may have already planned your summer vacation. Those of you who have just started planning may have realised that prices have soared through the roof or bookings may not be available for your choice of dates. Well, it may be pointless to overshoot your budget and it will be advisable to plan your holidays later in the year.
- Choose your mode of transport sensibly
When you plan a holiday, travel and accommodation work out to be major costs, especially if you intend travelling abroad. However, booking in advance can help you get cheaper rates.
If you are thinking of holidaying domestically, road or rail transports are cheaper modes, lookout for what fits into your budget and time. Also don’t rule out airways; because it is possible that you may get a good deal if you book in advance.
It is necessary that you check all the travelling options available before booking. Several websites let you compare prices. If possible, keep your dates and timings flexible, because sometimes travelling a day prior or later, and/or even taking red-eye flights can lower your costs notably.
- Select reasonable accommodations
Hotel stay too adds a significant amount to your travel cost. During peak seasons, hotels raise their room rents significantly. Hence, consider taking a holiday during off-season times to reduce your accommodation expenses.
Instead of hotels, you can opt for homestay apartments or holiday homes that are often relatively cheaper over longer periods. After all, you will be spending more time sightseeing than in the hotel. Wherever you plan to book your stay, request them for a discount. They may oblige you if it’s an advance booking.
Remember that some localities are more expensive. If possible, avoid staying in such areas, unless it helps reduce your travel costs.
- Lower your food expenses
As you may have experienced, eating out too has become rather expensive. Hence, you need to be careful of the places you choose to dine in.
If you are staying in an apartment furnished with kitchen amenities, consider cooking in-house instead of eating in restaurants all the time. Also, while making your reservations, you must check if meals are included in the package. This can turn out to be more cost effective.
Fast foods joints work out to be a cheaper alternative than visiting a fancy restaurant, when on a budget. Multinational fast food chains will be a better option than local ones.
You may also consider packing your own food to the destination, in case the food there may not fit into your budget or doesn’t suit your palate. However, if you are travelling abroad be careful; as some countries have laws and security checks against certain kinds of food items.
- Opt for commutation and sightseeing options that go well with you
While you are out to explore your destination, first assess the modes of transport available. When sightseeing, look for options available to tourists by the respective Government or even private tour operators. Check out the best fit for your budget, rather than getting swayed by swanking deals. They may offer tourist passes or even daily or weekly passes for public transport that can reduce your sightseeing costs significantly.
Some holiday destinations offer attractive adventure activities, but before you opt for them please check the entry fees/charges. At some destinations, adventure activities are very highly priced. It would be prudent to discuss the activities that you must not miss with those who have already been to the destination.
- Keep a tab on your shopping expenses
Following a strict budget extends itself to retail therapy, so don’t get carried away by impulsive purchases and swipe your credit card. Of course, buy a couple of souvenirs but, don’t forget to put your bargaining hat on, as souvenirs and other collectables may be substantially overpriced.
With the internet at your fingertips, research well about the sales/unique things/cultural crafts available. There may be certain shopping areas that can offer you a steal.
Also read: A 4-step approach to plan your vacation
It is best to chalk out a travel program with a financial plan in place. This will enable you to stick to your budget. Planning your vacation is like any other financial goal, where you save and invest regularly. You need to invest as per your risk profile and set a personalised asset allocation. This is a simple process that you can do yourself without the help of a financial planner.
Don’t miss this opportunity to sign up for PersonalFN's comprehensive A to Z e-course to become your own financial planner and plan your dream vacation. This video e-Course is geared to serve as a guide in your most serious decisions regarding money matters.
Out of the eight modules, in Module #2 of our video tutorials, we speak about how to set SMART goals. While in Module #4, we learn about how to select winning mutual funds, along with the right asset allocation and its importance. The module will also outline strategies to build your optimum investment portfolio and much more.
We have put decades of our knowledge and experience into handling the financial dilemmas of a regular investor into this e-course. Don't miss out on the attractive offers, including free guides and a special early-bird discount.Subscribe to the e-course now!