How to set your travel budget

Are you a frequent traveler? If you spot a good travel deal or receive an alert from the various travel portals on which you are listed, do you tend to opt for it immediately? Can you travel without worrying about money? Here’s how you can make your plans guilt-free:

START WITH MAJOR TRANSPORT COSTS

Begin your research to get an estimate of the cost of the trip. If you are going from one continent to another, look at the air fares. If you are traveling a shorter distance, it is worth looking at train or bus fares. Check various travel aggregators and set airfare drop alerts at least 90 days before international travel.

BUDGET FOR OTHER TRANSPORT

You will likely need transportation once you reach your destination. Public transportation is a great option in most cases as it is inexpensive and gives you a more local perspective. Also consider taxis if you think you might need them from the airport or in the city. Do you have several cities on your itinerary? Prices for buses, trains and boats are generally easy to find online.

CONSULT THE RATES FOR YOUR ACCOMMODATION

Decide which type of accommodation you prefer – hotels, hostels, guesthouses or self catering apartments. Make sure to read the reviews and check the prices in the area where you plan to stay. Be sure to multiply by the number of nights you will be staying there.

DECIDE HOW MUCH YOU ARE GOING TO SPEND ON FOOD

If you are traveling to Western Europe, Australia or New Zealand, the United States or Canada, eating out will cost you around $ 8 to $ 10 ( ??530- ??716) for lunch and $ 12- $ 15 ( ??850- ??1,000) for dinner. If you want to cut your food budget, look for hotels or guesthouses that include breakfast. Consider renting apartments where you will have access to a kitchen. Even if you do your shopping, cook a few times, and always have breakfast in the apartment, you will save money on your travel budget.

BUDGETARY PLAN OF ACTIVITIES

Will you be using tour guides during your vacation? Are there entrance fees for museums, parks, ruins or other attractions? Are you planning to do something more expensive like scuba diving or a hot air balloon ride? Add up those travel costs as well and make sure you know which activities are included and which are not. Do you like shopping when traveling? Plan accordingly for your desires.

HOW TO SAVE FOR YOUR TRAVEL PROJECTS?

For many millennials, traveling is more important than other financial goals such as buying a car, saving for a home, or even investing for retirement. Some create a separate travel fund for the holidays and set aside an amount, for example ??7,500, each month.

Systematic savings can allow you to finance a vacation without depleting regular savings. The important point to consider is that if “vacation” is listed as a priority goal and savings are earmarked for that goal, you should also invest for goals such as retirement. Liquid or ultra-short debt funds are best suited for travel goals within three to 12 months, as they do not attract exit charges or volatility.

For travel plans between three and five years, you may want to consider hybrid equity funds which have the potential for higher returns with some volatility. The goal is not to earn high returns but to keep the money aside for a specific purpose. With a sufficient reserve of cash at your disposal, you can secure a good deal, instead of going into debt or making a more expensive last-minute reservation.

Nisreen Mamaji is a Certified Financial Planner and Founder of Moneyworks Financial Advisors

To subscribe to Mint newsletters

* Enter a valid email address

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our app now !!