Financial Planning For Holidays

We all want a break from our routines, be it summer vacation or Christmas holidays. We can take such a break and go on a vacation only if we have planned it in advance. It is important that we plan our financial as well to meet all the expenses of the holidays. For doing so we need to do financial planning for holidays well in advance.

Believe me, if we plan it in advance, these holidays can be affordable. Take it as your short-term goal and include it into your monthly financial planning. All it takes is a little prioritizing.

Set goal and fix a budget for your vacation. Plan it well in advance so that you have enough time to research on holiday packages and avail deals and discounts. Planning for a holiday should be a part of your monthly budget. put a fixed amount aside every month for your holidays.

Financial Planning For Holidays

Understanding where you are financially and knowing how much you need to work with your holidays makes things easier. This way you have a clear cut idea about how much you need and when you need. So you can start planning for saving that desired amount every month.

It doesn’t matter whether you want to travel abroad or within your country, you should still make a plan for the best results. If you are planning for an abroad trip, then you have to plan it well in advance say about a year ago.

Setup a separate account for vacation and deposit money on a monthly basis to cover the entire expense of the trip. Make sure you deposit enough money every month that can take care of your entire trip. Also, consider inflation while preparing a budget for the foreign trip. As the cost will increase in line with the inflation and currency exchange rates.

Why Financial Planning for Holidays is required?

Any short-term or long-term goal which incurs spendings needs to be budgeted and planned for. Holidays is one such goal where the spendings could be in lakhs. So it requires planning for sure.
In India, a domestic travel for a family of four can cost around 1.5 to 2 lakhs. There are people who take vacations without financial planning are using their extra income or recent money windfall. This option is not best but better than touching your other funds like a retirement fund. So it is better to start planning for the holidays you are planning to take in the next two years.

Where to invest for your vacation goals?

Well, it depends on the factors like time period, budget etc. Like if you are planning for a vacation trip to abroad which is five years away, you can invest in balanced mutual funds. These funds have a mix of equity and debt components having a lesser risk and moderate returns. For the holidays three years away, debt funds are better options.

And if you plan for the holiday withing next 2-3 years you should invest into liquid funds which give you bank FD equivalent returns but a flexibility of withdrawal funds at any time without any charges or penalty.

Mutual funds are offering great flexibility and high returns which can suit individual needs. You can enjoy your vacation stress-free if you have planed your finance well in advance.


What you should do for financial planning for holidays?

You have your famous holiday destination in your mind that you want to visit with your family or friends. It is money, not the time that stops you from taking that trip. So if you plan your finance right, start early as you do for your investment and stick to your plan, it will be easy for you to go on your dream destination.

To accomplish your vacation dream, do the below suggested things.

Perfect Timing for Holidays

You needs to plan for your travel at least 2 months in advance. This will help you to have the necessary funds for your trip and purchase air tickets at lower rates. It will also help you to have a better hotel deal. If you do not plan well in advance you will have to pay more and compromise on the trip as air tickets and hotel rooms get expensive and you will not have many options to choose from.

There are many ticket booking websites like,, which offers very good deals and cash back on your tickets and hotel bookings. Advance planning will also help you in making any changes in your travel plan.

Systematic Allocation of Fund

Have a separate account exclusively for your vacation spending like you have your emergency fund. For a short-term goal, you may choose to invest in bank fix deposits and recurring deposits or put money into liquid funds.

Liquid funds are the better option as it allows you to withdraw money without any exit load or penalty. At the same time, it offers a bank FD like returns. Put aside at least 5 to 10 percent of your earning into this fund so that you can plan well. If you are planning for more exotic foreign location, then you have to save more. It is easier to save more if you and your spouse both are earning. You can easily save money from the second income source you have with you.

Do your research

Before finalizing your hotel or ticket, you must do proper research as there are many options available to choose the best deal for you. Compare various deals offered by the online portals and choose the best one which suits your needs.

Check the whole itinerary before your booking as you may pay for the location or services you don’t need in the first place. Conduct your own research on the place you want to see and have a rough idea on how much you need. If you are planning an abroad tour then understand the VISA regulations and charges. You also would like to check the currency exchange rate for the country you are visiting.

Check with your credit card company on the international acceptability and various charges. The credit card can be a lifesaver abroad in case you are running out of cash. To save on the transaction charges, you may carry money in a Forex card which is cheaper than credit card swipe.

Don’t go overboard

Stick to the budget that you have set for your trip. Try to be within that limits only. Sometimes it happens that we enthusiastically spend on the holidays and when we come back we realize we have overspent on the stuff that we should not.

Don’t use a credit card until and unless it is an extreme situation. You can skip some of the services provided by the hotel that you think you don’t need. Avoid foods and drinks offered by the hotel, check local foods and drinks availability instead.


One can plan a wonderful holiday by proper budgeting and planning in advance. It can be achieved at many income levels. Money is a great tool for happiness. Now is the time to start planning for your dream vacation.

2 thoughts on “Financial Planning For Holidays”

  1. Planning a holiday in advance makes them very affordable.We need to plan well and not exceed our budget since many people tend to spend a lot during the festive season.This article is fantastic!


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