How to save money for a vacation?

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Many Indians skip vacations for lack of money. However, going on an international holiday from booking your flight tickets, accommodation to having exotic foods can be quite an expensive affair. If not planned properly, you would only be racking up huge debts, undermining your riveting memories of the vacation.

This is where smart financial planning comes into play. Most of the individuals would prefer depositing their funds in a recurring deposit account or savings account to accumulate a sufficient corpus for the trip.

Here’s how to save up enough for your next trip:

For many millennials, travelling is more important than other financial goals such as buying a car, saving for a house or even investing for retirement.

Taking a vacation is not even an option for many people. There’s too much work to do, or not enough in the bank, or maybe children have to attend school or coaching classes. The Expedia Vacation Deprivation Report, 2016, says Indians are the fourth most vacation deprived in the world.

An online survey conducted by ET Wealth last month reinforces these unhappy statistics. Two out of three respondents said they were not able to take enough time off, and 28% are unable to take even one yearly vacation. Even those who manage to take time off end up answering calls and checking their mail while on vacation. More than 11% even participate in con-calls while on holiday.

Evidently, Indians don’t attach enough significance to taking holidays. They understand that vacations are important but let myriad reasons hold them back from taking time off to unwind. Most people agree that work-life balance gives them better focus at work. But they are still putting up with it instead of changing it.

Sort out your Priorities

Why do Indians forego their leisure so easily? Experts say it might have something to do with the feudal mindset of not wanting to displease the higher ups. At some companies, taking time off from work is almost seen as an affront to the employer. But this attitude is changing. While some companies still have policies that discourage employees from taking time off, with more millennials coming into the workforce, this is set to change.

Survey findings show that middle-aged people are the most vacation deprived. Only 64% of younger respondents (below 30 years) were not going on vacations, while 71% of those aged 41-50 years were missing holidays.

Almost 11% of the respondents to our survey answer all mails, take calls, and even attend con-calls while on vacation. Another 58% answer urgent emails and emergency calls. If it stresses you out to stay connected while on vacation, don’t do it. However, if you are able to have the time of your life with your kids while responding to that long email, go right ahead.

Planning is Key

Once you’ve got the leave aspect out of the way, the next big step is to plan your vacation. Planning and scheduling well can help you save a good deal on your vacation.

Planning your vacation down to the last detail can help you save a good deal. Once you decide on a destination, decide on modes of travel, local conveyance and accommodation well ahead. Check out local passes and discounts.

Money Worries Abound

The most important ingredient of the holiday plan is money. Even though Indians are good at saving, this is a major problem for those planning a holiday. Nearly 34% of the survey respondents said they were unable to go on vacation because they didn’t have enough money.

This is largely because many Indians don’t consider vacations important and very few list holidaying among their financial goals. A simple solution is to fix a budget and start saving in a systematic manner. Putting a small amount away every month will not pinch but can build a corpus big enough for your family to enjoy a good holiday. Once we reach the targeted amount, we know it’s time for a holiday.

Where to save for your Holiday

If you are saving for a holiday 1-2 years away, the best option would be a recurring deposit with your bank. For greater flexibility, and possibly higher returns, you can opt for short-term debt funds. Short-term debt funds offer fairly stable returns and are not volatile. Keep in mind that you’re saving for a short-term goal, not investing for returns. The main aim of these vehicles is just to salt away the funds till you need it and ensure it is not spent on other things. You should not hope to make up for funding shortfalls through these.

The SIP route can also be used to plan bigger holidays for your family. If the holiday plan is more than 3-4 years away, go for options that have a dash of equities as well. These may be able to give you slightly better returns than bank deposits and short-term debt funds.

5 Tips on How to Save Money while Travelling

1. Choose your destination wisely

Now, this is very important. This is actually your first step towards a successful budget trip. Choose a destination where most people won’t be travelling to at that point of time–in short, an off season destination. After all, you travel to feel good. Pick a place where the off season is on, and yet, the season is just about to start. For instance, Darjeeling and Gangtok are great places to go in September, because the season starts in October. The weather is just fine during this fine, with just a few hiccups in the form of occasional rain, but the main tourist spots are not crowded and you can thus enjoy the true beauty of the place.

2. Mode of Transport

Don’t compromise on your comfort and safety while travelling. Please do choose the mode of transport you like the most, but don’t spend on that extra comfort. For instance, choose for a cheaper airline even though you might have lesser leg space, or choose to go for the AC deluxe bus instead of the Volvo bus–you will take an hour or two extra to reach your destination. But the amount of money you will save is plenty. You can save it up for one extra adventure activity at the destination, or a heartier meal may be.

3. Accommodation Expenses

A big chunk of your expenses depends upon the kind of accommodation you choose. The cheaper it is, the more you save. If you are looking to strike a deal with a hotel, try using various mobile app–it will let you stay big and spend less. And if it’s a more authentic experience of the place you are looking for, try for homestay accommodations.

4. Go Local

If you are someone who really love to travel, and not just fond of the idea of travelling, this is something you will love to. Stay like a local. Do what the locals do–take the local bus, walk as much as you can, cycle around the place, and ask the locals for suggestions on interesting spots to visit. This way, you will save plenty of money that you would spend on cabs, tourist guides, and so on. Besides, it will help you explore and discover more as a traveller.

5. Eat Good, Spend Less

When you are travelling, it’s better if you avoid having your regular favourites. Choose to eat the local cuisine. Don’t go to the restaurant, ask the locals for advice, and then head to the local joints. This way, you will be able to eat plenty of delicious food and that too by not spending a lot on it.

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