How to manage your travel finances?

how to manage your travel finances

Don’t let your travel stretch your finances and you have to ensure you have sufficient wealth before you take off. You have to maximise travel without breaking the bank. The only way to set two travelers apart is how differently they plan their finances for the same travels.

Traveling with the sole intention of acquiring bragging rights would make you an anxiety ridden traveler always looking for the next best deal and so make sure that your personal wealth allows you for the inevitable travel indulgences.

how to manage your travel financesImage Credits: Commons Wikimedia

Take advantage of the growing home rental aka bed and breakfast market. You may not have customer service staff or porter hauling your baggage but you can have the luxury of doing things on your own like cooking using local ingredients or fixing easy meals at low cost in the kitchenette.

Have a budget for each day of travel so you know how much the buck will stretch. Ensure that your travel is not an exercise in denial about your finances. Have a specific allocation for travel and be sure it is an affordable number so that you do not have to pay EMIs after your travels or sighting at credit card dues that are regrettable reminders of your exotic shopping trips. You do not want your travel spends to eat into your priorities.

Read: Epic formulas to plan your travels to get rid of travel hangovers

There is a choice one can make about being a tourist or a traveler. Planning your finances for travel is where timing, instincts, feelings, tendencies, experiences and logic come together. The malefic alignment of unplanned travel finances would cause your best laid plans to go awry amid the other meltdowns of travel.

how to manage your travel finances

Travel finances are the granddaddy of your travel plans that can be the one of the most important factor that has the potential to make or break your travel plans. If you indulge in travel for once in a year or annually here’s what you should finance wise. Be a travel whiz financially. Travel industry is replete with deals and offers, discounts and rebates, only to accommodate dilemma about spending for the experience and deciding how much is too much. Internet is a marketplace where rankings and ratings enable collaborative decision making on a scale never imagined in the trend of the last couple of years. The psychological growth from becoming a traveler is the process of lifetime. It is all about pursuing the travel ideas that you like and giving yourself the right kind of opportunity to strike value deals.

A travel budget is always a good place to begin. The simplest way is to define what proportion of your annual income you are willing to spend on your travels. If you get a month’s off from work or a privilege leave that your employer usually offers you might be willing to spend a month’s leisurely travel every year.

A travel budget is a good idea to pursue. Earmarking a corpus travel will ensure that there is adequate buffer for interspersing luxury experiences with the ordinary.

The traditional route is to save and invest a small portion of the income every month with the discipline of setting aside something regularly. The other option is to draw on your abilities to do mental accounting treating some incomes differently from the routine income.

how to manage your travel finances

Invest the corpus sensibly so that it can also work for you. Set aside your benefits in year one and take a simpler holiday that uses half that amount as let allow the other half to grow in value and be available for a better holiday later. In personal finance, delayed gratification is not just a virtue but it also represents the time that you give your money to appreciate.

The travel corpus has the ability to grow in value and has the ability to fund a regular withdrawal for annual holidays that will have you do equity investing and debt investing for income purposes. How much your withdrawal is compared to the corpus will determine what your asset allocation should be. It is easy to learn asset allocation when you work with simple goals of traveling.

Also have a check of your travel corpus to see if you are postponing your holidays going out of your way. Use it as your own personal checkpoint for taking a few short breaks.

how to manage your travel finances

Stay attuned to the changing trends in the travel business to make the most of your travel spends. Travel industry is slipping out of conventional hotels, resorts and stay options to the likes of Air BNB I or into the hands of individuals who are renting their homes and serving home cooked meals and taking their guest travelers on private guided tours and letting travellers experiencing travel like they are being at home. Avoid holidaying on borrowed funds and overspending on credit card while traveling.

Stay clear of all the lure of owning an exclusive property for your mini travel breaks because the world is large and restricting yourself by in one corner of this enormous planet by stashing all your hard earned finances into one single asset is not a wise idea as it will only do the uphill task of sinking all your money for all the unproductive reasons. Avoid the temptation of locking yourself into one place unless you have made enough to own that property and also are able to take to travel at least once in a year because after all the entire world is your oyster if you have made the decision of transitioning into a hard core traveler.

Read: 10 Smart packing tricks for traveling

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