With a widespread Covid vaccination being done throughout the globe, most of us are waiting for travel restrictions to lift so that we can travel freely. But it is not only the free boundaries and complete global unlock which will allow us to travel, finance has equal importance. We need money to travel and that money should be saved well in time. If we are planning to travel in the next 6-12 months, we should start saving money from today itself.
Travel enthusiasts often ponder on – How to Manage Finances and Keep Aside Enough for Travel During Covid Era? In this post, we will address this concern.
Make a Separate Saving Fund Exclusively for Your Travel Requirements
You need to have a dedicated fund with you which should be filled every time you get paid by your employer. A fixed portion of your salary should go into your saving corpus meant for travel. You should not withdraw money from this account for any other needs. Your contribution to the account should be periodic and continuous. Many people make a travel fund but forget it in months after creation.
Investing the Corpus is Better Idea
Having cash with you for travel is not a good idea if you intend to travel after a couple of months or more. You may invest the money in your fund depending upon the time frame after which you intend to travel. You will fetch an interest on the investment, which will make the money grow without any effort.
A saving account with any bank offers interest at the rate of 3-4%. If you intend to travel in the coming 1-2 months, you should keep the fund in the savings account as the fund will increase. These accounts are highly liquid and you may withdraw the money through ATMs.
Fixed Deposit Accounts
A Fixed Deposit account generally offers a higher rate of interest than a saving account. But they have a drawback of liquidity. Hence if you are planning to travel after 6 months or so, you can invest the corpus in an FD account. Interest at the rate of 5-6% is offered in such accounts.
Debt funds generally offer a return higher than bank FD accounts which may vary from 6 to 8 per cent, but the liquidity offered in this case is lower than even FD accounts. Hence, you may opt for investment in this fund if you intend to travel after a year or so.
Avail Special Debit/Credit Cards
Many banks offer debit and credit cards which provide free access to lounges in the airports, meals in aircraft, travel vouchers, etc. Such schemes may help you to lower the cost to be incurred by you during the travel. Not only the cards but opening special accounts (with pre-specified minimum balance) with the banks may also render you such services for free.
Pre-booking through Online Travel Websites
If you pre-book your travel with online travel websites, you may get special cashback and discounts on your travel. The service provider may offer you various freebies such as complimentary taxis from the airport to hotel or free tourist guide etc. This may help you minimize the cost associated with the travel.
Minimize your Expenses
Most of us have been working from home and also due to lockdown entertainment/ dining out has decreased. As a consequence, our expenses have decreased substantially. These expenses may prove to be extra savings for our travel fund. To save more, you need to analyze your spending pattern and then make a budget accordingly which will help you save more for the travel fund.
This tact can help you figure out the unnecessary spending which can be eliminated to maximize savings. You do not need to completely cut things, rather you can go for a plan which suits your budget. For example, you may downgrade your DTH plan than disconnecting it completely if you watch more web series.
Credit Card Rewards
All credit card companies offer reward points for spending made through the card. You can make spending in such a way that maximum FICO Extends reward points can be fetched. These reward points can further be redeemed to fund your travel plan. In many cases, the company (having tie-ups with online travel websites) offers discounts with their partner online travel websites.
Travel in the pandemic period is risky, yet if you take precautions, you can experience ultimate enjoyment. To get over financial woes that may associate with this time, follow the above-given suggestions, and have a great trip.