Smart Holiday Planning

Holidays can mean different things for different people. For some, it could be the much awaited break from the daily grind. For others, it could be a chance to spend some time with family and reconnect, while for some it could simply be an annual ritual. Whatever it might mean to you, holiday planning is something that is now gaining traction. In order to ensure that the holiday you take meets all your expectations, you usually start planning for it in advance. An integral part of holiday planning is to create a plan that will help you save enough money for your holiday. 

Below are a few steps that will guide you in creating the perfect holiday plan;

Determine holiday budget

The world is your oyster and in current times, you can literally travel anywhere. The first step in your holiday planning would be to zero in on your holiday destination. There might be several places that you would like to visit. However, you eventually need to narrow it down to the few that you would like to visit during your upcoming holiday. Once the destination has been decided, calculate an approximate budget for your holiday. This will include the cost of air tickets, cost of accommodation, other travel expenses, food expenses, sightseeing expenses and miscellaneous expenses.

Invest for your holiday

Now that you have an idea of the amount of money you would need for your holiday, the next step is to create a corpus for your holiday. Before you start investing, determine the time horizon for the investments. Would you like to take this holiday in six months? Or, would you like to take this holiday in a year or more? This will have a strong impact on the choice of your investment avenue. If the holiday is being planned for within the year, then you could primarily choose to invest in money market mutual funds. If the holiday is being planned for in the next 12 – 18 months, then you can choose to invest in a one-year fixed deposit along with an SIP in an equity mutual fund. If you are not comfortable with an equity mutual fund, you can invest a lump sum amount in a debt mutual fund.

Another option to go by is to make holiday planning one of your key financial goals and to regularly invest for the same. This way, the holiday kitty will keep growing and you can dip into it whenever you want to go on a holiday.