Its vacation time! Are you planning to take your family on vacation to beat this summer heat, yet? If not, don’t fret there is always the next time. Indeed, vacations aren’t cheap. Affordability is the biggest factor. Saving for your holidays makes more sense than taking an Equated Monthly Instalment (EMI) and paying over a period of time. Vacations that are planned well in advance tend to be very good and stress-free. Be it the deals on hotels, air tickets, internal transits or any other packages – they work out to be cheap and in your favour when done in advance rather than hustling and bustling in the last minute. Hence, planning is quite essential. Instead you can consider investing in mutual funds via a Systematic Investment Plan, also known as SIP. Here’s how you can plan for a smooth vacation:
- Assess the budget you require and the capital you can afford
- Finalise your travel plan
- Calculate the number of months/years you can save/invest(time horizon) for the vacation
- Inflate your budget using the appropriate multiplier. You can use an SIP calculator for the same. Remember that costs linked to trips go up each year.
- Calculate the amount that you need to spare each month towards SIP investments
- Select appropriate investment SIP avenues to earn desired returns
- Ensure that you encash your investments on time
However, mere planning your trip might not be enough if you aim to make your trip economical as well. To achieve that goal, you need to save and invest each month to be capable of financing your own vacation. This will lessen the burden of financing for a holiday at the last minute.
Returns earned on your SIP investment will aid to fund out of pocket expenses and will not dissuade you from accomplishing your other goals as well. SIP can prove to one of the best ways to achieve your financial goals while simultaneously saving diligently for your next dream holiday. Remember, SIP is a mode to invest in mutual funds online on a regular basis so you can accumulate wealth in the long run. SIP also inculcates a disciplined way of making investments in mutual funds.
You would agree that having a debt-free life and eventually a stress-free life is the best way to live. So, try to avoid falling into a debt trap as much as you can. Go on a debt-free vacation even if it’s a little late, rather than opting for the costliest EMI vacation. The longer time you have for taking and investing in a holiday, the less is the amount you would need to invest. This is due to the power of compounding, also known as the eighth wonder of the world. And, this will help you go on that extravagant holiday you have been longing since long. Happy investing for a dream vacation!
