How to fund your trip abroad amid soaring inflation? But here are some range of funding options available for your well-deserved trip. Read to know more
If your social media feed has been full of friends posting their vacation selfies, be assured that you are not alone. Indians have travelled extensively this year as expenditure on travel and hospitality shot up by 165% annually, according to data from payment solutions provider PayU.The trend is likely to continue as travellers look forward to a year-end break after the last two new year eves were marred by Covid outbreaks. The aviation industry is seeing a jump in airfares across popular destinations as people begin planning their holidays.
But it's not just demand that’s pushing up prices. Airlines have to contend with a delay in the delivery of new aircraft due to disrupted global supply chains. The fall in the Rupee’s value, coupled with record global inflation, will no doubt further stretch tourists’ purse strings.
In the midst of all this, funding a vacation can seem like an uphill task. For those hellbent on taking that well-deserved trip, there are a range of funding options available.
Save up and jet out
Taking a foreign trip is a discretionary expense, and you should be able to fund it with money from your own pocket. That being said, it doesn’t mean you should break your fixed deposits and long term investments.
Such trips are rarely an impulse decision and should ideally be planned a year in advance. This gives you time to put a concrete savings plan in place. Instead of having a physical travel jar or creating a separate bank account, you can create multiple goal-based savings deposits within one account for a time period suited to your travel plan, allowing you to earn higher interest while saving up.
ET SpotlightMoney management apps like Fi Money take this one step further by enabling you to set up
rules to automate your savings
. For instance, if you frequently shop online, you can set up AutoSave rules like, ‘Put aside ₹100 when I order from Amazon’. This can be linked to a ‘Euro Trip’ deposit on the app to save up without having to manually transfer funds.
An investment in pleasure
Trading in the safety of deposits for higher returns by investing in debt mutual funds can help in reaching your goals faster. Liquid mutual funds are ideal for more immediate goals, while short term debt funds are better suited for a time frame spanning one year or above.
ET SpotlightHere too, apps like Fi Money go beyond the traditional SIP route to offer innovative auto-invest rules. These include rounding up the change to the next Rs. 100 after every expenditure and passively investing it in your choice of mutual funds. Having such rules in addition to regular SIPs can further decrease the time it takes to reach your goals or even surpass them.
A credit to experiences
Taking out a loan for discretionary expenditures like a vacation should always be a last resort, if at all. Banks offer personal loans that are specifically designed for tourism. But these come with high interest rates going up to 20%.
Similarly, if you plan on using a credit card to finance your trip, you need to make sure that you have the funds to pay the bill in full. Carrying over a credit card bill can add a substantial amount to your trip budget.
Don’t mark up your forex
Another important aspect to consider when planning for a trip abroad is how you will spend your money. Forex cards are one option that allows you to preload a certain amount of money in specific currencies. However, converting this to any other currency incurs high conversion fees and charges.
ET SpotlightDebit and credit cards offer the flexibility to convert rupees into any currency you might need. But these usually include forex markups as high as 4.5% on each transaction. The
Fi Money debit card comes with zero forex markup
, making it an ideal option for international payments.
There is no single route to funding your trip abroad. Saving up and investing smartly can ensure that you have your dream vacation despite soaring prices.
(This article is generated and published by ET Spotlight team. You can get in touch with them on [email protected])
This story originally appeared on: India Times - Author:Faqs of Insurances
