Despite post-Covid revenge travel losing steam, people are continuing to plan vacation sprees, or at least the travel enthusiasts are. These are the holidayers who love to combine weekend road trips with longer vacations, and domestic tours with international jaunts, spacing them out adequately, but doing so consistently every year.
While it is a good idea to widen one’s horizons with travel and take occasional breaks from the pressure of work, it also takes a toll on one’s finances, given the high cost of trips, especially if you fly abroad. Does it then make more sense to shore up one’s finances before spending on a discretionary expense like travel? Or should one prioritise holidaying not knowing whether one will be able to do so in later years, constrained by health or financial well-being? While opinions range on either side of the argument, here are some points you could consider before going whole hog on your travel ambitions and heedlessly spending your hardearned money on it.
Have a steady job: It is very important that you have a steady job before you fulfil your travel aspirations. If you rely completely on your past savings and quit job for travelling, or pick up ad hoc assignments along the way without any assured or consistent income, soon enough you will have no money left either for your important goals, or travelling.
Have an adequate emergency corpus:If you either use your emergency funds for travel or decide to vacation without first ensuring a safety corpus, you will not be able to handle any eventuality, be it a medical crisis and hospitalisation, job loss, travel emergency or any other sudden development that requires a large amount of money. So prioritise the building of an emergency corpus before you decide to take a travel break.
First save for important goals: Most travelholics prioritise their travel goal over everything else, be it retirement or children’s education. This is especially true of unmarried youth or even people in their 30s. Since retirement and children’s goals seem like too far away in the distant future, they do not even start saving for these, spending instead on their long-cherished dreams like travel. It is, however, the first rule of good budgeting that you save first and spend later. What this may often translate into is a less expensive domestic holiday instead of a foreign vacation, but try not to compromise on it. It is crucial that you start saving and investing a fixed percentage, say, 15-20% of your income each month, the moment you start earning, and within a few years you will be on track to reaching your critical goals. As your income rises, you can easily take out the money for your travel goals.
Do not avoid travel altogether: While the need to save and invest for your future cannot be emphasised enough, it is equally important to indulge in your passions like travel. There are, of course, people for whom travel is not a passion, nor a priority, and they can easily avoid spending on it. If, however, holidaying twice or thrice a year helps you maintain a better life-work balance and takes pressure off your work schedule, you must plan for it in advance, save adequately and take a break without overwhelming your monthly budget or investments. Travel not only helps you meet new people, familiarise with new cultures and places, but also offers fresh opportunities to work or enhance your existing skills, especially if they are connected to your job profile.
IF YOU HAVE A WEALTH WHINE, WRITE TO US... Disclaimer: The advice in this column is not from a licensed healthcare professional and should not be construed as psychological counselling, therapy or medical advice. ET Wealth and the writer will not be responsible for the outcome of the suggestions made in the column.
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