Have you always wanted to take your family some place nice for a vacation? What’s stopping you? Is it the ever-rising cost of living and the affordability factor? Indeed, vacations aren’t cheap. They burn a huge hole in your pockets. Don’t worry there is always a next time. You can save today to take your family on a luxurious trip tomorrow. Saving makes more sense than opting for an Equated Monthly Instalment (EMI) and eventually paying it over a designated period. Vacations that are planned and articulated well in advance tend to be stress-free andless expensive. Be it aspectacular deal on air tickets, resorts or hotels, internal transits or any other packages – they are quite cheaper when completed in advance rather than hustling and bustling in the eleventh hour. Hence, planning is very important. Here’s how you can plan for aeffortless vacation by investing in mutual funds via a Systematic Investment Plan (SIP):
· Evaluate the total corpusneeded for the trip and the amount you can afford right now
· Finalise your travel plan by determining the location, timeliness of the vacation, duration,researching all the probable expenses, etc.
· Determine the number of months or years you have (time horizon) to invest in mutual funds to save enough for the vacation
· Do not forget to inflate your entire budget using an appropriate multiplier as the costs linked to trips shoot each year, thanks to the rising costs of living. You can use an sip calculator for the same
· Compute the minimum sum of money required to be invested each month as monthlySIP instalments
· Select the right type of mutual funds for your portfolio to achieve your goals. Remember, your mutual fund investments must align with your financial objectives, investment horizon, and risk profile
· Make sure that you encash your mutual fund investments timely
Returns earned on your investments will help you tosupply for your additional expenses. SIP can prove to be one of the best tools to diligently save for your next vacation. As SIP inculcates disciplined mode of investment among investors, it ensures that regular payments are made towards your financial goals.
Living a debt-free life means a stress-free life. It is indeed one of the best ways to live your life. So, do not be a victim to debt trap and clear your debts as soon as possible. If possible, go on a debt-free vacation, even though if it means going a little late, rather than going forward with costlier EMI options. Remember, the longer your investment horizon, the lesser pressure you have each month to dedicate a significant amount of your income to SIP investments. Thanks to the power of compounding, the earlier you invest in mutual funds, the bigger is your corpus achieved. So, what are you waiting for? Invest today and treat yourself and your family to a much-needed vacation. Happy investing