Ask any millennial what their financial goals are or what they would love to do with their money, and the majority of the respondents are going to shout out “travel”. Travelling is one of the main financial goals for many millennials. While travelling may be fun, planning for the vacations especially saving money may require a bit of discipline and patience. But proper planning will make it easier to achieve your travel goals. And it is easier than you think.
Here are some of the easy steps that can help you build a savings plan for your travel requirements.
Travelling goals are mostly short term financial goals. As it is a short term goal, you would not want to lock in your money for a longer period. If you are very serious about travelling and see yourselves hopping on the next flight or booking a bus or train, you can look at having a dedicated savings account for your travel plans.
It is better to have different savings account as it helps you to segregate your travel money from other uses. Also, a separate savings account will mean less money in your salary account and hence less money to spend on other uses. With the travel money out of your way, you will be tempted to spend it.
There are different types of savings account. Zero balance digital savings accounts are one of the best types of savings account to save money for your vacations. As these accounts don’t have any minimum balance, customers do not need to worry about maintaining a minimum average balance.
Also, opening a digital zero saving account only takes a couple of minutes and can be opened through the bank app. All you need is your PAN card, Aadhaar number and phone number linked to Aadhaar number.
Click here to compare various zero balance accounts.
With the savings account in place, the second step is to know how much you need to save. A little online research will show you how much you need to save for the trip. Once you know how much you need to save, you can easily come up to the amount that you need to save every month. You need to keep in mind the time horizon before calculating the amount that you need to save per month.
E.g., if the cost of your travel goal is Rs.50,000 and you plan to visit in the next five months, then you have to save at least Rs.10,000 per month.
However, if your travel plan is more than a year away, you may have to consider the cost of inflation in your budget as well.
It may be the case that you don’t have any specific plan and you may be more of spontaneous traveller. In this scenario, you can come to a percentage of your income that you are comfortable with earmarking for travel. It may be as little as 5% or high as 80%.
After you figure out the monthly amount that you need to save, the best way to make sure that you don’t miss out on any payments is to set up an automatic transfer from one bank account to another.
Almost all the saving accounts offer the option of automatic or scheduled payments to their customers. E.g. if your salary is credited to your account on 25th of every month, then you can set up a scheduled payment from your salary account to your travel savings account for 30th of every month. Scheduling the payment will help you to keep your travel savings goal always funded.
You can use the money to book tickets and hotels and manage other expenses as well. As it is a savings account, you don’t have to transfer the amount to a different account to book flight tickets or withdraw cash from the ATM.
The desires of the younger generation especially millennials are different than their parents and grandparents. This generation is focused on experiences rather than things. No wonder, travelling figures as the priority for many millennials.
Without the right planning, the travelling plan may start to rot in our heads. Hence, if travelling is one of your top priority, you can start the journey by opening a separate savings account and setting up an automatic transfer from your salary account or regular savings account to your travel dedicated savings account. Life is meant to be lived and planning your travel makes it sweeter.
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