Love Travelling? Here's How You Can Create a Travel Fund
If you’ve always wanted to see the world, don’t let your finances hold you back. Start building a travel fund so you can backpack across Europe, enjoy an overwater villa in the Maldives, skydive in Dubai and more. Sound financial planning will make sure you have the money to enjoy your trips, and that you don’t have to worry about your finances when you’re back home.
Jul 2022
4 mins read
Share:
How to build your travel fund
Review your finances
It’s important to understand your expenses and liabilities today and expected outflows tomorrow. This will help you allocate your earnings and savings efficiently to gain optimum returns from your travel fund investments. You could use online investment planning calculators to know how to manage expenses and how much to allocate each month to achieve your goal in a defined time.
Calculate how much you will need – and where to invest
- Say your next foreign vacation is a week in Dubai next year. Your target may be around Rs. 50-60,000. You could contribute 60% of your savings towards term deposits of 1 year, and 30% in liquid funds. The remaining 10% could be your most liquid asset in your savings account for emergency needs.
- For a fortnight’s backpacking trip to Europe, your target would be around Rs. 1,50,000. If you are planning this trip within the next 2-3 years, investing a portion of your savings and earnings in mutual funds regularly may give you the necessary returns.
- You could also consider mutual fund schemes like FMP (Fixed Maturity Plans) or ELSS (Equity-linked Savings Scheme) that offer tax benefits under Section 80C of the Income Tax Act. Equity-linked mutual funds may offer higher returns, but at a higher risk.
Consult a financial planning expert to guide you with investment plans that suit your needs. They will also help you understand the risk-to-reward ratio along with the expected return timeline to make an informed investment decision.
Long-term travel budgeting
You can also pursue investment planning to build a long-term travel budget for several trips or for a marquee dream vacation. You could build a portfolio of stocks with a mix of large-, medium- and small-cap funds. You could also consider investing in SIPs (Systematic Investment Plans). Begin with a small investment, and gradually increase the value of the investment as you start feeling more confident about the chosen scheme. You could plan higher investments in the initial years, and lower investments in subsequent years, as your responsibilities increase later in life.
Remember, financial planning isn’t just an austere exercise to help you save for the future and mitigate risk – it’s also there to help you build the resources you need to live the good life. Invest early and build a solid travel fund so you can get started on your bucket list!
Share:
PGIM India Asset Management Private Limited
(CIN - U74900MH2008FTC187029)
Toll Free Number: 1800 266 7446
Email: care@pgimindia.co.in
This is an Investor Education and Awareness Initiative by PGIM India Mutual Fund.
All the Mutual Fund investors have to go through a one-time KYC (Know Your Customers) process. Investor should deal only with the Registered Mutual Funds (RMF). For more info on KYC, RMF and procedure to lodge/redress any complaints, visit https://www.pgimindiamf.com/ieid.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. Read more
All the Mutual Fund investors have to go through a one-time KYC (Know Your Customers) process. Investor should deal only with the Registered Mutual Funds (RMF). For more info on KYC, RMF and procedure to lodge/redress any complaints, visit https://www.pgimindiamf.com/ieid.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. Read more
The information contained herein is provided by PGIM India Asset Management Private Limited (the AMC)
on the basis of publicly available information, internally developed data and other third-party
sources believed to be reliable. However, the AMC cannot guarantee the accuracy of such information,
assure its completeness, or warrant such information will not be changed. The information contained
herein is current as of the date of issuance* (or such earlier date as referenced herein) and is
subject to change without notice. The AMC has no obligation to update any or all of such
information; nor does the AMC make any express or implied warranties or representations
as to its completeness or accuracy. There can be no assurance that any forecast made
herein will be actually realized. These materials do not take into account individual
investor's objectives, needs or circumstances or the suitability of any securities,
financial instruments or investment strategies described herein for particular investor. Hence,
each investor is advised to consult his or her own professional investment / tax advisor / consultant for advice in this regard.
The information contained herein is provided on the basis of and subject to the explanations, caveats and warnings set out elsewhere herein.
The views of the Fund Manager should not be construed as an advice and investors must make their own investment decisions regarding investment/ disinvestment in securities market and/or suitability of
the fund based on their specific investment objectives and financial positions and using such independent advisors as they believe necessary.
