How Much Should You Spend On Your Holiday?
Spending Quality Time - And Money
A family vacation is a time to relax, have fun and spend quality time with your loved ones.
But, not having a holiday budget is a no-no. Here are some guidelines to make sure that all goes according to plan.
The 50-30-20 Rule
The popular 50-30-20 rule to household budgeting urges you to allocate 50% of your post-tax income towards your ‘needs'
30% towards your ‘wants’ and 20% for savings
So, you should fund your holiday from the 20% earmarked for ‘wants.’
Estimate Costs
Make a rough estimate of the cost of airfare, hotel, transportation, food, entertainment, and site-seeing costs, guides, and gifts/shopping.
Allocate The Right Amount
As per financial experts, you can earmark anywhere between 5%-10% of your income towards vacations, with 10-20 days of domestic vacationing or five days of international holidaying.
If you want more days off, reduce the vacation cost.
Look For Bargains
Plan early; this ensures you get the best flight and hotel deals.
Look for low-cost recommendations from friends or from social media, travel blogs and websites.
Also try travelling during off-season, when discounts and freebies are more common.
Start A Vacation Fund
Start a vacation fund, where you allocate a portion of your monthly income into a liquid fund.
You can spend anywhere between 5-10% of your take-home salary on vacations - but don’t ever compromise on budgeting and long-term investing.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.