Planning a trip? Here are some hacks to help you manage finances better
New Delhi: With travel restrictions easing up, many people are planning long-awaited vacations. While some people are planning small getaway trips, some have saved up for international vacations. However, vacations, especially international, are expensive and it is very easy to get carried away when you are on a vacation. Therefore it is very important to ensure that you have a water-tight plan for the trip which will not impact your finances negatively.
Ideally, the best way to fund your vacation is through personal funds saved over time. The next best way is to borrow but within limits. A vacation on borrowed funds can be more expensive than you think if you haven’t evaluated your loan options.
If you’re short on cash and are planning to take a loan to finance the trip, evaluate everything and dig deep on the loan options and compare different offers before choosing the loan that best meets your requirement. Also, have a clear repayment plan based on your affordability.
These important tips will help you make sure your vacation does not hit your financial health:
Buffer: It is extremely important to plan a budget for a vacation and stick to it. Make sure to allocate budget for tickets, stay, leisure and food. Planning and budgeting really help you to be cost-effective. Planning these two aspects judiciously can help you divert more of your savings towards other financial goals.
If you plan early, you can search and avail good hotel stay and flights deals. You will also be able to avoid last-minute tariff hikes or increased charges. Additionally, keep 20-25% of the total budget as a buffer to take care of any unplanned expenses.
Online deals: With the internet, getting good deals has become a lot easier, Many travel websites offer online travel deals in the form of combo packages which cover flight tickets plus hotel bookings and even airport transfers. Due to their partnerships with airlines, hotels, and cab companies, a combo deal can save you money through discounted pricing. You can also use hotel booking apps for great deals and discounts
Luggage: Note that there are three types of luggage when travelling – cabin luggage is what you’re allowed to carry on you inside the aircraft, a personal item like a small handbag or backpack that you can carry into the cabin along with your cabin luggage, and check-in luggage which is your suitcase or any big piece of luggage that you deposit at the counter while completing your check-in.
If your baggage is above the free check-in limit, you have to pay more money. So, if you’re planning a vacation, make sure to pack light so you can save up on extra baggage cost.
Currency exchange: Do not forget to check currency exchange rates and charges before converting the money. You can avail better deals if you plan ahead for this instead of waiting for last minute conversions. Currency exchange facility is available at the airport and even though it is an easy way to get the currency exchanged, you should avoid at all costs.
Do not exchange the currency at airports as they can charge up to 15 per cent extra on an exchange which can seriously disturb your whole financial estimate. You will certainly get ripped off. Only get your currency exchanged at the airport if it is an absolute emergency. There are zero chances of any bargaining at the airport.
Forex card and little cash: Travellers are often confused if they should carry cash, credit and/or debit cards, traveller’s cheques or foreign exchange (forex) card. Carrying too much cash while travelling is inviting trouble. Instead, carry a little amount for emergencies and rest can be put in a forex card. A lot of people assume that carrying a credit card along with cash is the best option when travelling abroad. However, not many are aware that using a domestic credit card can abroad be a costly affair. In such a situation, a forex card can come in handy.
In case you get only some currency exchanged thinking that you would save money on currency exchange by just swiping your credit or debit card abroad then you are completely wrong. Credit and debit cards carry your currency so when you swipe it abroad, currency change rate is added to the actual expense and so you are not saving anything but are actually losing money on every transaction. A forex card on the other hand carries the local currency which makes sure there is no exchange charge added whenever it is swiped.
It is worth adding that having travel insurance is a bonus. If you have travel insurance, it is easier to manage disruptions like baggage/document loss, delayed travel, personal accidents, dental & other medical emergencies and senior citizen health concerns. Choosing the right insurance plan is important. Family travel insurance is a safety net that makes sure that the glitches in your holidays like flight cancellation, personal accidents or other unforeseen situations do not ruin your much-deserved break.
Also, medical emergencies or loss of baggage will only add to your cost. Thus, to save yourself from this unforeseen situation, you must buy travel insurance for the family. Some countries have already made it mandatory to buy a travel insurance policy while visiting the country. Family travel insurance is one travel insurance policy that covers the entire family.