Tourist train 'La Sabana' is seen with Christmas lights in Bogota, Colombia (Reuters)
December is a month of celebration with Christmas and New Year providing that festive spirit. Children have winter vacations and offices have holidays, which prompt many to indulge in a vacation. In fact, December is the most favoured time for vacations for many.
While the word ‘vacation’ entails enthusiasm and happiness, you cannot ignore the expenses involved. Whether you plan on taking a short trip or a relaxed stay, you have to shell out a big amount. If a vacation is on your mind, it is time you start planning your holiday itinerary and make advance bookings to save money.
While it is a great idea to have a long-term financial plan for a vacation, don’t get disheartened if you don't have one. Let us take a look at a few short-term and long-term options to fund your Christmas and year-end vacation.
Choose a destination first
First and foremost you should shortlist the place you want to visit. Only when you know the destination, you can chalk out the expenses involved in ticket bookings, hotel accommodations and sightseeing.
A personal loan can come handy
After you have selected a place, you will know the money required to take the trip. To get money easily and instantly, you can opt for a personal loan. Personal loans are unsecured loans which can be taken for any personal or business use. A personal loan is ideal for funding your vacation. It is available easily, there is no elaborate documentation required, you can apply for the loan online and it is even instantly approved. You don’t even have to pledge a security as collateral or require a guarantor for the loan.
You can avail financing from travel operators too
When it comes to financing your trip, travel operators also lend you a helping hand. Many known and popular travel operators allow you to plan a trip on EMIs. You can book your holiday through them and the total cost of the trip is divided into affordable EMIs. You can easily pay off the EMIs over the subsequent months. This facility helps you take your desired trip without burning a hole in your pockets or draining your finances.
Invest in SIPs
Mutual funds are a very popular investment avenue. Investors favour mutual fund investments through SIPs (Systematic Investment Plans) which let them invest monthly in small and affordable amounts. SIPs also promise attractive returns on investments.
So, if you have a SIP in your name or a mutual fund investment, you can liquidate your portfolio to avail funds for your trip. However, if you don’t you should start a SIP. You might take a loan for this year’s vacation but a SIP started today would let you take a trip next year without worrying about funds.
Use your deposits
If you are a risk-averse investor, fixed and recurring deposits would appeal to you. If you already have such deposits, you can withdraw funds by liquidating them. Alternatively, you can also avail a loan against security against your deposits to fund your trip. The loan would be cheaper than personal loans in terms of interest rate as it is secured against the value of your deposits. For those of you with no deposits, you should start a recurring deposit scheme. You should invest small amounts every month and make a travel fund for next year’s Christmas.
Short-term debt funds
If vacations are around the corner, then you can also accumulate in short term debt funds or liquid funds with no exit load so that you can withdraw them whenever you need the liquidity.(The writer is CEO, Bankbazzar.com)