Why holiday planning must be your financial goal, and how to do it
Going on a relaxing leisure travel is something we all do. However, if not planned well, vacation may pinch big holes in your pockets. To avoid financial crunch at the end of your holiday, you better plan your vacation well in advance to accumulate enough money for a comfortable sojourn at your favourite holiday destination. Amar Pandit, founder, HappynessFactory.in suggests following ways to meet your vacation goals:
For holidays that are four to five years away you can invest in balanced mutual funds, which have a mix of equity and fixed income components in their portfolio.
For goals that are three years away debt funds are advisable. Debt funds invest in fixed income instruments like bonds and debentures.
If your holiday is less than three years away, you could consider investing in arbitrage funds. Arbitrage funds are low risk-low return funds that are treated as equity funds from the tax perspective.
Mutual funds offer greater flexibility and potential performance than fixed income instruments like Recurring Deposits.
With the practice of holidaying picking steam, financing options are evolving too. But these come with strings attached, conditions with respect to change of travel plan, cancellation charges, etc.
Thus, by planning and saving for your vacation in advance you can be sure of not having to make last minute compromises for lack of funds.