Hacks to plan for a budget-friendly vacation!

In today’s world, everyone’s life is full of adventure, so there needs to be some relaxation along with fun in life. So, in order to release all day-to-day stress, one needs a break from their daily routine to refresh our mind. One such time is when Raj and Simran decided they needed a break from their hectic schedule. So they plan to take a trip. Let’s see how they decide and how they ensure proper financial vacation budget planning for the same.

Step 1: Finalizing the date and destination

The first and foremost need is to decide on the place, and there is always lots of discussions required, so both Raj and Simran came up with various destinations keeping the budget for a trip in mind. At last, they decided to go to Bali, so thank god there wasn’t a world war at home, but then it was time to decide on dates.

–  It is very important to select the right dates so savings can be arranged accordingly. Selecting just any date may end up burning a big hole in your savings.

– As we decide the dates, we know how much time we have to save up and create an investment plan as you know whether to have a short-term or a long-term investment plan.

Step 2:  Deciding on the mode of transit

– As we now know that it is an international trip it is essential to make wise choices for this.

– Since Simran wanted to experience luxury travel they decided to make two plans to compare one with business class tickets and one with the economy.

– Not only flight but it’s important to consider your commute inside the city. For this, they decided to go with rental scooters for local transit and a Cab for to and from airport travel.

– Deciding on these will help you understand the cost and further, you can include that cost in your investment plan

Step 3: Considering cost of Passport and Visa if required

– Since they were travelling internationally Visa and passport charges are important to be considered.

– Raj had a passport, but Simran did not, which required them to issue one. Since they were planning trips a bit later, they saved on the cost of getting a Tatkal passport.

– An Indian citizen who stays for less than 30 days in Bali he or she does not require a visa.

– So they saved on the cost of the Visa too.

– Planning prior helps you cut down on the cost of documentation, too.

Step 4: Considering cost of stay and food

– The next step was to calculate the expense of stays and food. Since Raj and Simran are both foodies but also financially smart, they decided to save up by not including unnecessary meals and exploring the local food. They just had a complimentary breakfast every morning to make sure they could roam around and explore more with less food stops.

– Not just food but a wise way to save on a vacation is to choose a stay that has basic facilities if you want to explore more.

– However, preferences vary; some might just want a luxury stay and rest in their hotel itself.

– Then they should plan for such stays or hotels prior and do booking in order to plan their finances accordingly.

– If you want to explore the place you are travelling to more and save up on the cost, then you can choose a budget-friendly stay, which will provide you with basic amenities.

– Also, try to make sure that the stay you choose is at a central location of the places you visit so you can save on internal travel costs.

Step 5: Consider your bucket List and cost concerning to the same

– With almost all the above things done, both started with putting the wishlist things they had with them in the plan as they found suitable.

– And hence had a final itinerary, i.e. Route or path ready of where to go and what to do.

– The vacation was on, and so was the mood because they had almost everything planned and laid out well. Now they had to decide on which proper finances to enjoy all of the above things they had decided.

Step 6: Miscellaneous things we need to make sure

– Now that they had a plan finalised they just fine-tuned a couple of things and figured out any other miscellaneous expenses that might occur and hence plan for an extra fund they might need.

– They also ensured to pack light to avoid extra baggage charges and also made sure that they didn’t shop a lot of pre-travel

Step 7: How much to save

– Here, they needed to accumulate the corpus amount required, so they wanted to know the amounts they had to invest per month.

– So, they used the LXME Goal Calculator to find out the investment amount they had to invest.

– It helps you to estimate the rate of returns you will require to achieve the corpus you need to fund your trip. This will further guide you in choosing the right investment instrument.

– Let’s look at an example: approximately Raj and Simran will need ₹2.8 lac for travelling to Bali for 1-week week, including everything. So let’s calculate what amount they will have to invest if they are planning a trip to Bali after 2 years.

So, here, they will need to invest ₹10,500 monthly or ₹2,31,405 lump sum at the rate of 10% for 2 years to fulfil their goal to go to Bali for vacation.

Step 8: Lastly executing the plan by investing

– With time, after 2 years, they were planning the trip, so they started to plan their investments.

– As they earlier used the LXME Goal Calculator they knew the periodic amount they have to invest and at what rate they will require to achieve the corpus for this trip.

– One of the plans they went ahead with was the LXME Short-Term Plan which is recommended for 1 to 3 years with a targeted return of 10% (market-linked returns), and it matched their requirements such as time horizon, liquidity and risk appetite.

– You can also go ahead and look out for the LXME Ultra Short-Term Plan, which offers higher liquidity and is recommended for 1 to 11 months if you are planning any trip within a year.

Hacks and tips by Raj and Simran to plan for your trip:

1. Plan the vacations in advance so that they get you time to save and not burn holes in your savings.

2. Choosing the right investment plan for savings helps you to make sure that the returns are as required so that you can plan and enjoy your trip without financial pressure.

3. LXME can help you plan for a budget-friendly vacation through various plans it has and utilise different investment instruments available.