Financial Planning for Vacations

Vacations form an inseparable part of the modern day lifestyle. With hectic work schedules and busy family lives taking up a chunk of our time, vacations are imperative to relax, rejuvenate, and bond with our close ones. As with all other things, you will do yourself a huge favor if you can plan the finances for your holiday well in advance. Vacations are meant to de-stress; stressing over money and expenses in the middle of watching a sunset at the beach is the last thing any one would want. Right people?

So today we have put together some simple ways for you to achieve effective financial planning for your vacations. These will ensure that you enjoy your vacation in every sense of the word. Here we go!

1. Create a budget

The key idea when it comes to financial planning for vacations is to get your travel budget in place. Once you have zeroed in on the destination, calculate the projected costs for travel (via air, road, or water, as the case may be), lodging, food, sightseeing, entertainment, shopping, and any other miscellaneous expenses. This will help you to arrive at a number which will decide how much you will be spending, in other words the money you need to save, for your vacation.

2. Plan in advance

It always helps to plan a holiday well in advance if you want to use your money wisely. Flight tickets are relatively cheaper when booked much before the travel dates. Another thing is that you get access to best rates for hotels and guesthouses too, when you plan your travel in advance.

3. Off-seasons can be a privilege

Yes, you heard it right. Planning your holiday to that dream destination during the off-season benefits you in multiple ways. Firstly, you save on your expenses as travel and accommodation come at lower prices as against the peak season. Secondly, you get to explore and enjoy the place with a greater insight as it is less crowded during that particular time of the year. A win-win situation we say!

4. Save in your travel fund

One of the hallmarks of effective financial planning for vacations is to set up a separate travel fund where you can save a fixed amount every month to gather the money you need for your holiday. Let’s say you are looking at a travel budget amounting to 120,000 bucks. All you need to do is save 10,000 bucks every month and you will have saved for that dream holiday all in a span of 12 months! The only word of advice here is to set aside a separate account to accumulate travel funds, so that you do not use this money elsewhere! (yes we know that temptation to spend saved money)

5. Insurance is important

Life is unpredictable. As much as you would want to travel with a free mind, an accident or a health issue could crop up when you are on a holiday (a time when you would least expect it). Good financial planners will make sure that they have these expenses covered in the form of insurance. Trust us, insurance will save you a lot of hassle and stress should an unfortunate event or an accident happen.

6. Keep extra cash handy

While you are enjoying your trip, some unforeseen expenses could come up. For instance, a delay or cancellation of a flight would mean you could be spending an extra day at the hotel. Misplaced luggage is another common occurrence during international travel. So extra cash in your hand will help you to take care of such situations. Pay the rent for that additional day at the hotel, or buy an extra pair of clothing while you try and get back your luggage from the airlines company. A lot of last-minute anxiety can be kept at bay by doing so. Also keep your credit cards handy just in case you fall short of cash.

Vacations are a time to unwind and wash away the worries of life. Effective financial planning helps you to do precisely that. Do let us know your thoughts in the comments below.

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