Easy steps to help you plan your budget for multiple vacations every year.
Written by: Anagha Bhat
India ranks fifth in the most vacation-deprived countries in the world as around 40% of Indians don’t go on a vacation.
Reasons are quite a few- tight work schedules and cash crunch topping the list. And if you are someone that loves to travel and explore the world, if you are someone that has made a new year resolution to take multiple trips but do not want to end up broke, and are now trying to figure how to plan your budget that would support this passion of yours, you have landed on to the right page!
There are several ways to plan your budget so that you not only take just one vacation a year but multiple of them, you only have to take some time, fish out a notebook and a pen and plan it.
Sorting Out Your Budget
Let's first begin with sorting out your expenses and incomes before we move on to the actual budget planning for your vacations.
Write down your monthly income & list out all your expenses down to even the tiniest one. There are fixed expenses like Rent, EMIs, salary for maid/cook/driver etc. and variable expenses like utility bills, groceries, commute expenses etc. It is better if you could write each and every expense for at least one to two months so that you get an idea of where and how much of your money is going.
Once you have the data of a month’s expenses, sit down and analyse your expenses. Are you buying plenty of water bottles? Are you eating out too many times a week? Are you splurging on expensive restaurants way too much? Do you have a landline that almost nobody uses in the house? Do you have a cable connection but watch nothing more than Netflix and Amazon Prime? Do you have a physical newspaper coming to your house but you majorly read news online only? Ask yourself more questions like these to figure out what you want and what you really don’t, but are still paying for. Cut these unnecessary expenses out and you will be surprised to see how much you end up saving the next month.
“A penny saved is a penny earned.” Once you've identified all the unnecessary expenses that are eating up your income, find out ways to cut them.
Instead of eating out, try to cook more meals at home. There is enough number of recipes and meal prep ideas out there on the internet to help you out. Turn off the electric appliances when not in use, carpool instead of driving your own car, take a bus if your home and work is well connected with local buses or metro, re-assess your mobile plan, make a list of items and groceries you need before going out to buy and buy only the ones that are on your list, look for happy hours for drinking out with friends, borrow clothes from a sibling or your friends instead of buying every piece of outfit that is trending, etc. There are so many ways you can cut down your expenses- find a cheaper way of doing what you want to do and that will also save you quite a lot.
Start a small travel fund in a new bank account. Figure out an amount that you would deposit in that account every month without fail. As soon as you receive your paycheck, go and make this transfer as the first step; because if you don't, chances are that you'll miss out on doing it. Once you become regular with this, invest your travel fund in different baskets- like RDs, Liquid Mutual Funds, etc. Remember, don’t put all your eggs into just one basket. The interest that you will make on this will also be an income and that income will come in because of your saved money and not your time and work.
Reducing expenses is only half the battle won; you also need to find ways to increase your income. If you have some extra time (maybe an hour or two), and a few skills, you can start a side hustle for some added income. There are a few side hustles that you can even start off your couch, all you would need is a laptop, an internet connection and a heart to do it!
Planning Your Vacations
Now that your budget is sorted, let's look at how to plan for your vacations in the most effective way.
Plan your vacations well-in-advance. The flights and hotels are cheaper when you book minimum 2-3 months ahead of time.
Chalk out your goals, the SMART way. Be Specific, let the plans be Measurable and Achievable, keep it Relevant and Time-bound. For example, if you would like to travel to Bali, your goal should be "I want to travel to Bali in the month of September with my spouse and my budget for the trip is INR 1.5L for 5 days". Once you have a goal like this, it is easy to plan the budget and the vacation accordingly.
Do a quick round of research as to what locations would be feasible in the budget that you have. Even if you're sure of Bali, you can visit 8 places there, or just wrap up your trip in 2. So be specific and zero-down your goals. Also consider things like weather condition, the kind of theme and the environment that you want in your trip, etc. Some places are good to visit only at a particular time of the year and some places are amazing round the year, some places are cheaper at a particular time of the year. So, choose wisely.
Plan and book the big-ticket items as soon as you can. Two-way flight charges, hotel stays, the inter-city travel while you are there, any adventure that you would like to buy during your trip etc. should be taken care of first. This is because prices for these things fluctuate the most and you're likely to get a better deal if you plan in advance.
Start putting aside money for smaller items too. Note down the maximum/average amount you should be spending on each meal, souvenirs, cellular provider’s bills, administrative expenses like visas, an item that you forgot to bring like sunscreen/shaving cream and also allot some money for emergency expenses that might arise. Once you have these figures in mind, start putting aside money for it every month. This way, by the time your vacation actually happens, you will have enough saved up.
This is where you can find the average daily travel costs of different destinations from real travellers. It is a great website which shows you the cost of the trip according to the style of travel – cheap, mid-range or high-end. You have to choose your destination, style of travel and the currency you want to view the results in, and you can get the average daily expense for one person. Hence, you can choose your destination, accordingly.
I really hope that this was helpful for you. Let us know your thoughts in the comments below! :)