Four tips to optimise your travel budget
One of the questions that I am always asked is, “Lakshmi, how do you fund all your travels?” The general assumption is that all the trips are sponsored. However, most of the trips are personal and spent from my own travel budget that I prepare zealously every year. I weave my travel calendar around the budget and alternate between trips, both at home and abroad. In fact, my year begins with an excel sheet, with numbers that go up and down. It can be very tiresome at times, but personally, it is the most important aspect of travel planning, especially if you are figuring out how to budget for a trip. However, here are some simple insights on how to budget for travel, especially for an international trip.
Plan a yearly budget
It can be a bit overwhelming to plan for various trips without having a clear-cut idea of my finances. Hence, at the beginning of every year, I sit down with my excel and take stock of the annual budget and look at how much I can actually afford. The budget is, however, based on the potential income, I could earn over the period. I usually consolidate all my savings, including my investments and plan my budget accordingly. So if you are wondering how to budget for travel, you must start with an investment plan as well. Also, I’m a very impulsive traveller, hence the budget I have, often goes for a toss and I need to re-plan. So, I divided my travel budget into two parts, one for my sudden travel urges and one for my long term travel goals. While my long term travel goals are thoroughly pre-planned and accounted for in my yearly travel budget; for my sudden trips, I need to have more money in hand. After years of trying a few options to save money, I found tax savings a way to increase my in-hand amount. Hence I invested, small amount into ICICI Pru iProtect Smart, a term plan from ICICI Prudential Life. It allows me to get a life cover and protect my hard-earned money from uncertainties in life. Additionally, it gives me tax savings of up to 54,600 under Section 80C and Section 80D; thereby increasing my in-hand amount. That means, with just one plan, I can protect my money and I can fulfil my sudden travel urges.
Synch your travel calendar with the budget
I usually synch the travel calendar based on the budget I have in mind. I start the beginning of the year with travels in India as there are several festivals and events. The weather is also great as winter slowly gives way to spring. The travel calendar can also be a blend of trips in India or short international trips that are relatively easy on the pocket. Based on the overall budget, I decide whether I want to do multiple short trips or one long international trip right at the beginning of the year. Usually, the former works better for me as projects are limited in the first quarter. So planning a robust travel calendar will help you when you are planning how to budget for a trip.
Maintain a healthy bank balance and buy the correct financial plans
It’s good to have lofty plans, but at the end of the day, affordability is the key. When I started travelling years ago, I would put a time frame and decide how much time it would take to recover my expenses from a trip. I would also focus on projects that I would earn before or after a trip which would immediately keep my balance sheet healthy. Another aspect that would help to reduce the spends is a good investment plan. And that is very important when you are figuring out how to budget for travel. While looking for an investment, I look for ways to increase my hard-earned money and protect my money from uncertainties in life. This led me to invest in lifelong insurance plans from ICICI Prudential Life.
Prioritise your expenses during a trip
A traveller is always greedy and wants to explore as many destinations as possible. But when you are travelling on your own, it is so important to prioritise based on your interests. And that forms the basis when you are planning how to budget for travel. For instance, I love shows, concerts and performances and I would splurge on Broadway or Moulin Rouge. But I am not someone who likes roller coaster rides and I would not spend my money on them. Sometimes when you travel as a family, everyone has different interests and you need to plan a budget to accommodate all of them. My husband, for instance, loves scuba diving while I am not into water sports and would rather spend my buck on a wildlife experience. We are now planning a trip to some exotic islands, where he will explore the world down under while I will lose myself in rainforests. For these exotic trips, I need to plan well in advance. So, in the excel that I maintain, I have a separate tab for the long term travel goals. These are big-budget trips which I intend to go with my family. For such trips, I needed a plan to grow my hard-earned money and at the same time, not compromise my current lifestyle. The financial planning that I do needs to accommodate these criteria.
So, these are my small tips that you can follow to pursue your passion for travelling and help you budget your trip. Following these tips, might help one kick-start their travel goals and make them a reality. Additionally, fulfilling one’s travel goals does not mean compromising on one’s current lifestyle. Hence be careful to save but not over-save. As for me, my financial planning and investment with ICICI Prudential Life help me grow my money and save taxes of up to 54,600. That means I now have more money to live my present to the fullest.
Now be it my long term travel goals or short term impulsive trips, I have got all of them covered. What are your tips to budget your trip?