So now we know the theory. Save for goals, get an emergency fund in place, and start saving early (even it means starting small).
Now, let’s talk about how to put these principles in practice. What steps do you take to save for a goal? A common aspiration among us so-called “millennials” is to travel the world. We want to save up for a great vacation and head out from the city bustle. What do we do to make this happen? We break it down below.
Set a realistic target
The first step is to figure out how much you can realistically afford to spend on this vacation. For example, if you have already saved Rs. 15,000, and can realistically save about Rs. 3000 per month, then in 5 months you can afford a trip costing Rs. 30,000. Commit to saving too much, and you are likely to miss your savings target and be disappointed.
Take the time to scope out deals
The best travelers I know plan months in advance. They spend a lot of time researching ways to optimize their spending. Here are some strategies our team came up with!
Optimize transportation costs: Most travel websites allow you to set up price alerts. Kayak.com actually let you see where you can go within a certain budget. Skyscanner meanwhile has an option to see flight costs from your city to anywhere in the world! Book in advance, and be flexible on your dates: Even moving dates by one or two days can have a massive impact on cost! If you have the luxury of time, look at slower but cheaper modes of transport. Avoid peak seasons: For example, the monsoon is a gorgeous but underrated time to visit large parts of India. Autumn and Spring are great times to visit other countries to avoid the summer and Christmas/New Year rush. Look up local deals: Scour the internet for local deals on the things you love. For example, lunch menus at high-end restaurants tend to be less expensive than dinner menus. Museums have free entry at certain times and days. Check in advance whether your destination city offers discount cards to tourists. Ask your hotel/hostel staff about which markets are pocket friendly and where should you expect to haggle. Keep an eye out for these deals, and you’ll notice that money will leave your pockets slower than you might have anticipated.
Be flexible in your expectations
We often get swayed by what we see and hear in the media. For example, when someone says white sand beaches, we often picture the Caribbean, Zanzibar, or Mauritius. However, there are great beaches and water activities in destinations closer to home, like the Konkan coast, Andamans or Lakshadweep. These are easier to access and cheaper to visit. Think about what you really want to do and look for best place to do that.
Then, to reduce your budget, see if you cut down on less important expenses (e.g., stay in a hostel vs. a hotel). The happiest people spend on the things that they love, not those that others love.
Save that money in a separate savings account
Once you’ve figured out your monthly savings target, start putting that money away in a separate account. Why a separate account? Because research shows that you are far less likely to spend money labeled “savings”. Even if that label is a purely mental one. Look for high-interest savings accounts. Many banks now allow you to open these online as well.
Set up a regular transfer to that account
Now right after your salary comes in, transfer your savings target from your salary account to this new savings account. Make it even easier for yourself by making that transfer automatic. That is a great way to overcome the self-control problems that will invariably crop up. You can set up an automatic regular transfer from your Netbanking, or (shameless plug), you can sign up for the Easyplan app.
We hope these tips help you save up for that dream vacation! Send us a note to tell us where you went!