Planning a vacation? This is how you should manage your money
It is very easy to get carried away when you are on vacation. In addition, our irrational selves can go to great lengths to justify unnecessary spending. “Therefore, it is very important to make sure that you have a planned budget for the trip,” said Chenthil Iyer, registered investment advisor at Sebi and chief strategist at Horus Financial Consultants.
Here are some things you should consider when planning your vacation:
Keep a tampon: You can keep 20-25% of the total budget as a buffer to deal with unforeseen expenses. Loading that much money on a travel card would ensure that you are alerted to the status of your budgeted expenses versus the actual expenses incurred, Iyer said.
Plan ahead: From airline tickets to hotel reservations, you can get great deals and save a lot of money if you plan your trip in advance.
“Also, check the currency transfer rates and fees before you convert the money. Even then, you can get better deals if you keep this thing done in advance, ”said Shweta Jain, certified financial planner, founder of Investography and author of My Conversations with Money.
Carry little cash: Carrying too much cash on a trip invites trouble. Instead, take a small amount for emergencies and rest can be put in a prepaid card. Keep some in the wallet and some in the luggage (in case you lose the wallet), Jain pointed out.
Never borrow and travel: It’s easy to buy into the sales pitch of a bank that will fund you for your trip that needs to be paid back in “easy” installments. However, that would be the biggest source of guilt for you in the future. Not only does a loan make the trip more expensive because of the interest component, it also makes you spend money you don’t have, Iyer added.
The main purpose of a vacation is to create happy memories, not to create a permanent reminder of your financial mistakes.
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