Plan your summer vacations now, smartly
“All work no play makes Jack a dull boy�, this proverb holds true entirely in today’s times. The stressful life that we lead makes it necessary to take a break at least once in a while.
Now that summer vacations have started, exams are over and you must be planning to take a break from office to take children out-of-station and enjoy some leisure time yourself. While planning a vacation, you plan the budget of holiday so that it does not pinch your pockets at a later stage. A well planned holiday keeps you at peace and helps you enjoy vacations at the fullest.
As important it is to plan a vacation and take some time-off, financial planning aspect should not be ignored. Though, financial planning might cause short term pain due to fewer amounts of liquid cash in hand but in the long run, this will save you enough money to live life to the fullest.
Not just planning for a vacation but ensure that you set goals accordingly to your financial needs which might comprise of setting aside funds for retirement planning, endowment or term policy, medical insurance for family.
Retirement planning
Buying a retirement plan is like a visit to a dentist which keeps getting delayed and is done until it is very necessary. Investments bought at young age have greater time horizon to provide the benefits of compounding. Premium paid on pension plans can be availed as deduction u/s 80CCC of the Income tax act’1961.
Insuring your life
Life insurance policy provides a lump-sum amount to the nominee in case of unfortunate death of the policy holder. If the budget on finances is tight, go for a term plan rather an endowment plan. Also, if you are the only bread earner of the family, there cannot be any reason as to why you should not buy anlife insurance policy. The premium paid on life insurance policy is deducted u/s 80C of the Income tax act’1961.
Medical Insurance
The inflating medical costs are a cause of major concerns in our country. Securing the health of yourself and your family members is very important as a medical policy enables you to get the best possible treatment for any illness/ disease and it prepares you from dealing with medical emergencies financially. For self, spouse and children, an exemption up to Rs.25,000/- (for senior citizen an exemption up to Rs.30,000/-) can be availed u/s 80D of the act.
SIP investment plans
Investing in a SIP plan is suitable if you are planning to withdraw the money after a long period of time. For the purpose of saving for child’s education, SIP plans are best suited as it provides a large time horizon which eventually benefits the investment.
- Advance planning
Planning holidays in advance gives you the benefit of booking tickets and accommodation at cheaper cost. Also, you can take approvals from the concerned authorities intimating them about your travel plans in advance.
- Estimate a budget for vacation
Do not make a booking in haste. Prepare an estimate of your monthly savings, your fixed outgo and how much do you save on an average. Accordingly, select a destination which fits your pocket.
- Be aware regarding the terms and conditions
You can book your travel plan through a travel agent or online. Be aware regarding the terms and conditions of the package. For example the additional expenses for other services obtained by the hotel staff, cancellation policy of the hotel, cancellation charges of the tickets booked. Sometimes, you book tickets by air when the fares are low and realize it after booking that they are non -refundable in case of cancellation.
Every vacation that you plan ensures that you carry with yourself life enriching moments and experiences. So, plan your holiday today and have the most of it.
