Money plans for your short journeys and long travels
MUMBAI: What if you are looking for something more than an annual vacation? Full-time travel, or even two-year travel, require more money and financial planning than an annual vacation. Mint Money tells you how to plan travelling for long periods.
TRAVEL WITH A FULL-TIME JOB
Most salaried individuals who have travel as part of their financial plan would fall in this category. The number of trips and destinations depend on the budget you have in mind for travelling. “We see a growing interest from our clients who make sure that they travel every year,” said Bangalore-based Shyam Sunder, MD, PeakAlpha Investment Services Pvt.Ltd. How do you save for such travel expenses? “We first arrive at a budget. Next we accumulate the money in liquid funds because this is better than a recurring deposit or leaving the money in savings account. Liquid funds works well for short-term needs.”
LONG-TERM TRAVEL
Some may have a longer duration travel plans in mind. “Recently my friend, who is a lawyer, quit his job as he wants to travel for nine months,” said Surya Bhatia, MD of Asset Managers. For these kind of travel plans, you need an aggressive portfolio, he added.“First, you have to see if you can afford what you want to do. Next, you will have to be involved in the cost details. You should know what your monthly expense would be. You will also have to factor in the currency that you will be spending in, food bills, accommodation and emergencies,” said Nisreen Mamaji, certified financial planner and founder of Moneyworks Financial Advisors. Once you know the amount, start investing accordingly.
FULL-TIME TRAVEL
If you want to quit your job and travel full-time, that requires even more planning.
When Sachin Bhandary (34) quit his job to travel full-time, he approached a financial planner. “Three years before I quit my job, I met my financial planner Yogin Sabnis and shared my goal. There was a proper financial plan in terms of where and how to save and when the savings will mature and I will have access to them. It was a mix of SIPs (systematic investment plans), insurance and other savings and investment instruments. There was an emergency fund. Apart from all other savings, insurance and investments; people must have three months’ expenses available to them as an exigency fund. In my case, we were planning a 2-year exigency, so I could keep paying my home loan EMI and other monthly commitments,” said Bhandary, who is working on a startup focused on long-term trave. But is full-time travel sustainable? “For 3 years now, I’ve earned 90% of the my living through travel blogging. I collaborate with tourism boards and travel companies,” said Shivya Nath (28), who has been travelling full-time for four years now.
THINGS TO REMEMBER
It may sound interesting to try something new and there is no harm in trying it out. But do have a financial plan that will support your desire to travel. “These are immediate expenses. If you are in your 30s, remember that you will also need money for the next 50-60 years of your life,” said Sunder. So do keep a separate long-term kitty aside for your old-age needs, and don’t dip into it.