You may feel a little heady with your holiday planning this year—especially because you may be taking one after a long time given the Covid-induced restrictions—and want to spend on the best of hotels and recreational activities. With “buy now pay later” and other similar schemes available at the drop of the hat, the urge to spend at the drop of the hat may be high. However, it’s important to be penny-wise when you are on a holiday to ensure you don’t end up settling debts for the next six months or more.
If you stay within your budget, there is a greater likelihood that you will enjoy more, without worrying about the future. In fact, controlling your holiday spending is a great way to maintain a healthy financial life. “These days, everything’s available on ‘buy now, pay later,’ schemes, but there’s no fun when you have to suffer for the next six months for the six days that you spend in a five-star hotel,” says Hemant Beniwal, a certified financial planner and director at Ark Primary Advisors, a financial planning firm.
Here are five ways to spend wisely when you are on a holiday:
Set A Spending Limit
Make a budget for your entire holiday. This will restrict you from making unnecessary expenditures and increase awareness about your spending habits. Avoid last-minute shopping and make a realistic holiday spending plan.
You should start budgeting by first figuring out the total amount you could shell out for this trip. Then list the expenses, set priorities (say, five-star hotel rooms versus two extra days of rest). “After doing all this, you can allocate funds and keep track of your expenses,” says Beniwal.
Be Realistic About Your Budgeting Goals
It’s important to be realistic about how much you can spend. That will also help you understand what you can sacrifice. You should be able to assess the current circumstances in your life and plan accordingly.
It’s very easy to get swayed by friends who might be indulging in luxury items and fancy stays while travelling. But assess if you, too, can afford all that. If you are not in a great phase of your life, financially, create your own budget and set your goals according to your specific circumstances.
Try To Avoid Credit
It has been found that the majority of people lose track of their monthly budget just because their shopping bills are higher than they can afford. So avoid shopping for any knick-knack you like on a holiday. Ask yourself if something is really worth the credit you will take and whether you can afford that additional credit.
“The first starting of a debt trap is often the shopping habits. Shopping addiction is directly proportional to making impulsive and non-planned buying decisions. Loans or ‘buy now pay later’ is bad loan and they put invisible shackles around people's legs. Exiting the rat race or achieving financial freedom is not easy and if we add this unnecessary debt, it will be impossible for most people,” adds Beniwal.
Try Collecting Coupons
How many times do you use the online coupons collected from online stores or those available with credit cards? Take stock of what is already available to you and start collecting others that may be available in advance. Before shopping at a local shop at your holiday destination, you could leaf through your coupons to find a good deal. This often saves a lot of money.
Cut Down On Return Gifts
It’s common to bring a souvenir for your friends and loved ones from a holiday but no one will judge you if you bring back something humble. After all, it’s the thought that matters. If you’re on a tight budget, you should consider buying gifts for your friends wisely. If you have a big circle of friends, you could perhaps buy them handmade local products, soaps, incense sticks, small mementos, etc.
Finally, your holiday should not become a burden for you. It should be based on wisdom and love than greed and competition. You will feel more at peace if you plan and budget for your dream holiday.