Financial Tips for a Vacation Abroad
Whether you’re a business owner, an entrepreneur, or a high-ranking executive – a vacation once in a while is well deserved whether is a quick break nearby or a trip abroad. But, that doesn’t mean that you can’t plan it so it is financially efficient.
Before you start booking your itinerary, take some time to plan your finances and expenses. The rising costs of travel, accommodation, food and entertainment can burn a hole in your pocket if you aren’t careful, especially when you take fluctuating conversion rates into account no matter who you are. Why spend extra just because you have the money. Money saved by planning well is money you can use elsewhere!
Here are 6 simple ways to prepare yourself financially before planning an international holiday:
- Early Planning and Saving – Planning your destination, travel dates, stay and activities at an early stage gives you a better idea of how much your trip will cost. With an estimate of projected expenses, you will know how much you need to save and have more time to reach that goal. You can also make the most of holiday deals and off-season or early-bird discounts on airfare/hotel bookings.
- Track Foreign Exchange Rates – Currency exchange rates tend to fluctuate quite often, and you could end up with less money than you expected after conversion. Use your smartphone to keep track of currency changes both before and during your trip. Also keep some surplus in your travel budget for increases in foreign currency value, so you won’t be caught unawares if they happen.
- Pick the Right Card Type – Explore different types of credit cards, debit cards and prepaid cards for international use, and look for one that offers travel rewards or benefits. Check whether your bank or credit card provider charges extra currency conversion or transaction fees for ATM withdrawals or swiping your card abroad, and apply for a personal loan online as a backup when you can.
- Invest in Travel Insurance – While travel insurance is compulsory for visiting certain countries, don’t be tempted to leave it out of your budget if it’s optional. Remember, travel insurance can act as a backup for financial emergencies such as flight changes/cancellations, baggage loss, unexpected medical expenses, and more. Compare service availability and risk coverage for different plans.
- Handle Bills and Payments – Know when your credit card balances and other bills are due, and schedule automatic payments if you will be traveling around that time. If you fall behind on personal loan EMIs or credit card repayments, it could affect your CIBIL credit score. Check your CIBIL score online before and after your trip, to track your creditworthiness and watch for fraudulent activity.
- Monitor Your Spending – It can be very easy to lose track of how much you’re spending on vacation, so keep a close eye on where your money is going. Watch out for unnecessary expenses such as:
- Fees for excess or overweight baggage (pack light, only as much as you need)
- Overpriced in-flight or airport meals (carry refillable water bottles and snacks)
- Private airport-to-hotel shuttle charges (use public transport instead)
- Overspending on shopping (save your money for special experiences)
- Dynamic currency conversion (only pay merchants in local currency)
If you keep the above tips in mind, planning your dream getaway abroad will become much easier.
Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at [email protected]