Budget Travel: How to travel more by saving more?

If you are active on any of the social media platforms, your news feed would constantly remind you that most of the people you know are either vacationing at exotic places or are planning to travel. What do you want to do? You want to buy a ticket and set out on your journey to indulge yourself into the beautiful feeling of venturing out into the unknown. But what do you do? You let your urges die down because you are just not rich enough to afford it. Or so you think.

If there is one thing media has done successfully is to make travel look expensive – it is not true though. As a financial analyst, I can safely say that you don’t need to be rich to travel the world. You just need to be creative with your money. By inculcating better money habits, you can easily take off to your desired travel destination without getting stressed. I get a lot of questions from my friends asking me about how to save money to travel, especially when there are financial constraints. So here it is – my take on how you can experience more for less. These easy tips to plan a stress-free holiday on a budget require you to be financially responsible and willing to make quite a few sacrifices.  You can also make your travel dream come true with a personal loan, replacing your “someday” with now.

1. Construct a Travel Budget

There are 2 ways to look at your travel plan. Some would choose their destination first and then figure out the budget, while others would draft the budget first and then decide the destination. Either way, constructing a travel budget is imperative. Jot down all the things you expect to spend your money on, add to it the duration of the holiday and plug in the local cost estimates. You can do a better job at building your travel budget with the help of this exhaustive checklist:

2. Track Your Spending

Money by itself isn’t stressful. Not knowing how to effectively manage your money, that’s where the stress is. A simple solution would be to track your spending to be aware of your financial standing.You look at your financial situation and say, “Great, this is where I stand today. This is where I need to be tomorrow.”

Write down all your expenses. Trust me – it’s not an easy job. You may want to sit through it all with a cup of coffee or a glass of wine as you jot down the amount you spend on food, entertainment, monthly bills and not to forget your vices. You may be surprised to know how much money goes into buying stuff that you don’t need or can do without.

3. Set Travel Fund Aside Every Month

Decide when you are planning to take the trip. Let’s assume you have 12 months before you leave, your monthly saving goal should be 1/12th of the total. That means you have to put aside that much until you hit your target. Now the big question remains, how are you going to do this?

To get you started, you need to allot a fixed amount to recurring expenses. Your recurring expenses are both fixed and flexible. Your rent is a fixed amount so you cannot do much about it. However, the flexible expense is something you can cut down drastically. These are expenses that you spend on food and socializing. The trick is to fix a budget for your flexible expenses and save money for the trip.

4. Sell Your Junk

Have a long, hard look at the things in your house. Are any of your appliances lying in your house unused? Do you need that car which has been nesting in your garage for years? Hoarding these pieces of junk doesn’t make sense if you are not going to use them. Best is to sell them off and the money you get out of it could be an instant cash cushion.

5. Use Installment Options on Your Credit Card

If you have large ticket items on your shopping list, it may be a good idea to use the installment option on your credit card to manage your spending. You can take advantage of credit cards that allow you to shop now and pay for the items three months later without incurring any interest.

Simply put, it’s so easy to have a stress-free holiday on a shoestring budget with the help of these tips.

Author Bio:

Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at shiv@moneytap.com.