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Planning Your Summer Vacation? Here Are A Few Financial Tips

Adhil Shetty
Identify the place you want to go on a vacation in advance and accordingly work on the expenses needed.

A good vacation needs a good amount of money. With rising costs everywhere and vacation standards touching new high, people are now looking for ways to afford it without affecting their wallets. While working on a vacation budget, do consider the expenses needed by the entire family.

This summer vacation, follow these simple financial tips to have great holidays.

-Identify the place you want to go on a vacation in advance and accordingly work on the expenses needed. You should include expenses like travelling, lodging, food, sightseeing, and other similar charges required for your choice of holiday destination.

-Try to maintain a balance between your budget and choice while selecting the holiday place. Avoid spending more than what your pocket allows.

-During vacations, hotel rates and other travelling cost rise. Therefore, all your bookings should be done in advance to avail offers and discounts, and save money.

-Try to opt for refundable bookings to avoid losing full amount of money due to an emergency cancellation.

-You can either make the complete holiday itinerary yourself or you can book a package customised by a travel agent. You can compare both the option based on cost, flexibility, facilities, etc. There are many travel agents which customise the travel package for either whole tour or a half package (i.e. Only sightseeing or only hotel and travel). You can select the suitable option based on your comfort and budget.

– If you book a package tour, it would take care of all the major expenses like accommodation, airfares, city tours etc. You would only have to spend on food for which you can try the local cuisines or eateries away from tourist spots for cheaper options.

– For a more cost-effective option, you can also explore group tour booking, which takes care of all the travel related expenses like accommodation, transfers, food etc. at a lower cost. The only drawback of this is option is that you would have to stick to a fixed itinerary.

Funding Your Vacation

You can have a financially great vacation if you plan well in advance and save or invest towards funding it. Rather than borrowing money to fund it, invest in instruments like Fixed Deposits, Recurring Deposits, and in debt or Liquid Mutual Funds. You can also use a Credit Card or personal loan to afford your holiday. Few banks also offer personal loans tailored for foreign trips with interest rates ranging between 10-18 per cent.

You can also treat vacation as part of your financial goals and dedicate a fund for this purpose. If you regularly invest money for vacation, then you easily avoid loan and at the same time will earn attractive returns on your money.

You can also get your overseas vacation financed to up to Rs 5 lakhs through schemes offered by various travel operators. You have to make the repayment after coming back from the trip.  This comes with an interest rate similar to that of a personal loan and the repayment period varies from 1-5 years.

A word of caution here. Do take a Travel Insurance if going on a vacation abroad to protect yourself from eventualities like hospitalisation, loss of baggage, cancellation etc.

(The writer is CEO, BankBazaar.com)

BankBazaar.com is a leading online marketplace in India that helps consumers compare and apply for credit cardpersonal loanhome loancar loan, and insurance.