Wednesday, 4 July 2018

How To Finance Your Trip Abroad Without Compromising On Your Lifestyle

We all have friends who keep travelling abroad, but never tire of posting pics on social media. We wonder how they could manage to pay for their huge travel expenses. While some splurge all their money, chant the YOLO & FOMO mantras, there are others who save & invest wisely to make their travel dreams turn into reality. Are you one of those who earns less than 6 figures every month, but still dream of travelling to exotic locations abroad? Don't want to stop your monthly investments or other investments either? While most experts will advise you to simply cut down on your spending, we will show you how to fulfil your dream of travelling abroad without comprising too much on your lifestyle & not hampering your long term investments.

Step 1: Research & Figure Out Your Budget
We would suggest you go to travel aggregator websites like tripadvisor & makemytrip, to research on the places you want to visit, the best time to visit them, sightseeing charges, hotels, flights etc. This will give you an idea about the duration of your visit & the cost to be incurred by you. It is recommended that you book your flight tickets 3-4 months before your intended date of travel to get the best deals. We highly recommend for the best flight deals & tripadvisor for the best hotel deals. A lot of airlines have flash sales, keep a look out for them.
You can consider staying in dorms or do some couch surfing to save on costs. Read blogs online to learn about where to eat for less. Blogs also have information about which tourist attractions can be avoided &; which tickets can be purchased online, places where jump the queue & hop on- hop off tickets can be purchased etc. We suggest you to book a hotel close to the where major sight seeing attractions are to save on travel costs. You can save a lot of money, by not opting to go to your destination during peak travel season. Read articles on travel forums to find out the peak & off seasons for travel
Now that you have an idea of how much money you will need to go on your trip, it is time to start saving & investing for your trip.

Step 2: Where To Invest
Although we book our flight tickets three months in advance, it is ideal to start saving up for your trip approximately a year before your scheduled date of departure. People generally tend to invest money, which might be required in the short term in fixed deposits.
We strongly advise you not to invest in FD's & invest in short term or ultra short debt funds instead, since breaking your FD's prematurely would lead to lesser returns. Do not forget that interest earned on FD's is taxable, whereas interest earned on debt funds are tax free! Investments in stock markets for a time horizon which is lesser than a year is not advisable.
It is suggested that you start an SIP for a short term or ultra short term debt fund. As of today, JP Morgan & Edelweiss are the best fund houses to invest in, for short term debt funds. We suggest you to research debt funds on finance portals before investing. The ideal SIP amount should be 7000-8000 per month, which will give you roughly INR 90,000 in hand, for your trip. Debt funds are risk free & will earn around 8%-17% over a period of one year.

Step 3: EMI's
90,000 alone won't be enough to travel to exotic locations abroad. The way to raise more money is via credit cards. Convert your flight ticket & or hotel purchases into EMI's. Since you are unlikely to travel abroad again within a year, you can set the duration of your EMI's to 1 year. Considering that flights mostly cost around 50,000, a year long EMI will set you back by around INR 4500 per month.
You can also consider applying a credit card affiliated with an international airline. They give you an option of redeeming your reward points or miles to flight tickets. Do not splurge the air miles on anything else. On my last trip abroad, I redeemed my American Express reward points to JP Miles. This saved me a cool INR 6000 bucks! It is recommended that you spend for all your expenses from your travel friendly credit card. For a nominal amount of barely a rupee, American Express will let you use their lounge. Their lounge offers free food, alcohol, wifi & comfy chairs to relax on while you wait for the boarding to start.

Step 4: Speak to your neighbourhood bar (Optional)
Indian customs rules dictate that a person is allowed to carry not more than 8 bottles of alcohol. There is a huge demand for imported alcohol in India & importing it is expensive.
You can strike a deal with your neighbourhood bar & charge a commission of 100% per bottle. So for a whiskey bottle costing INR 6000, you can demand INR 12,000.
You now have a chance to recover close to INR 20,000-30,000, post your trip! This deal of course is not for the fainthearted.

1 comment:

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