Planning a vacation within one or a few years? Then the only way to achieve this goal is to start planning the finances right away. So, here are 5 suggestions to save money on your next vacation.
Set a budget
The first step to save money for your upcoming vacation is to fix a budget. For that, you need to factor in all the possible costs related to the vacation. These may include:
- Transportation costs (for instance, air, rail and bus fares including those on the return trip)
- Cost of meals when travelling
- Hotel booking and accommodation
- Food costs
- Expenses towards travel-related activities, such as shopping and entertainment activities
- Local transportation costs of the place that you visit
Include these costs in your budget and keep it relaxed so that it also accommodates any additional or unforeseen expenses.
After that, consider whether to invest in an avenue and use the returns to finance the vacation. A low-risk avenue is a fixed deposit investment. If you plan to invest in an FD soon, you can use an online fixed deposit calculator to learn the required maturity amount to meet your goal. You can even set your budget accordingly.
Also, Read More – How To Avoid EMI Defaults
Consider investing in an FD
Before investing in a fixed deposit, consider the duration after which you’ll have the vacation. If the period is a year or two, it’s best to choose a bank that allows you to open an FD for a minimum tenure of 1 year. As per your investment capacity, see whether the bank allows you to deposit as little as ₹10,000. Ensure that you can get access to the best fixed deposit interest rates to enjoy high returns. Look for other facilities like a loan against the fixed deposit for up to 75% of the amount deposited. Then if you decide to travel earlier before the maturity period ends, you can avoid premature withdrawals. If you get these benefits, consider investing in an FD in the particular bank.
Cut unnecessary spendings
Simply investing in the best fixed deposit may not be enough to save for your goal. So, consider saving more by spending less or not at all on less important things like:
- Ordering food frequently
- Subscriptions for entertainment
- Impulse shopping
Open a dedicated savings account
You can open a separate savings account to save some extra money for your vacation. If you currently do a job, for instance, you can request your bank to initiate direct/automated transfers from the account in which your salary is deposited to the account dedicated to finance your vacation. Thus, you can save in a disciplined way.
Consider a Home Loan Transfer
If you’re paying high interest on an existing home loan, you can consider transferring its outstanding balance to a lender offering a lower rate of interest. Then you can save on your EMI payments that can boost your savings for the vacation. You can see whether the bank offering the best fixed deposit rates also offers attractive home loan interest rates.
Simply follow the above tips to plan the finances for your upcoming vacation successfully. Start now! Also, Read More – How Settlements Affect the CIBIL Score?
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