A simple guide to enjoy your vacation without breaking the bank

Everyone deserves a good holiday but cannot afford one. Although, holidays are considered an expensive affair, one can afford a luxury holiday without pinching the wallet. How, you ask? 

A little bit of planning and farsighted approach can help you go for that long-pending vacation without breaking your bank balance. 

The first step to a vacation is to have adequate funds for the trip. 

Adhil Shetty, CEO and co-founder BankBazaar, said, "You can use options like a recurring deposit with your bank to park your savings periodically. Some banks may even offer a travel-specific savings fund."

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Travelling involves a lot of budget planning that too months before the trip. From deciding mode of transportation to staying cost, vacation always comes with a huge cost. 

Even as many of you must be scrambling to meet your budget or slashing expansive plans for cheaper options, we bring you a simple guide to afford that holiday. 

Once you know how much you need and when you are planning your vacation, back-calculate to identify the amount you need to save every month.

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The saving strategy should be to calculate the approximate amount of money that you may need for the trip. If you are planning an international trip, do remember to keep in mind the currency rate fluctuations while doing this.

"This fund can be used exclusively to avail a holiday package from a well-known travel operator. At the end of 12 months, the maturity proceeds are transferred by the bank to the operator to pay for your selected holiday package,"Shetty said.  

You can also use liquid mutual funds since they do not have a one-year exit load. The idea is to lock the money in a safe, liquid, risk-free instrument offering conservative returns.

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Liquid funds are short-term debt mutual funds where an investor has the option to park one's fund for few days or months and earn returns for the holding period as per market rates. Liquid funds provide average returns of 7-8%, which is higher than what even many FDs today provide. 

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Moreover, you can also allocate seasonal income such as your annual performance bonus towards your travel needs.

Make sure you do not go beyond budget. If in case, you think that the budget limit is going beyond, then do take some margin while calculating the expenses. But, at first place spending unnecessarily is a big NO, NO!! For instance, while booking hotels, do look which is suitable for your pockets and do not just run behind five star hotels. 

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Even while booking flight tickets, book them in advance when they are cheap. 

Hence, this summer enjoy your vacation but do take care of your expenses!