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  • No money for a holiday? Here's how to save up enough for your next trip

    Quote by Jayant Pai in The Times of India Business, November 13, 2017

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    Many Indians skip vacations for lack of money. Here's how to save up enough for your next trip:

    Imagine your company asking you to go on vacation and paying you extra salary during the time you are away. Employees of the Sydney Morning Herald don't have to imagine. Rules say all employees of the Australian newspaper must take a 40-day vacation in a year. What's more, they get paid 50% more when they are on leave.

    The reality in India is starkly different. Taking a vacation is not even an option for many people. There's too much work to do, or not enough in the bank, or maybe children have to attend school or coaching classes. The Expedia Vacation Deprivation Report, 2016, says Indians are the fourth most vacation deprived in the world.

    An online survey conducted by ET Wealth last month reinforces these unhappy statistics. Two out of three respondents said they were not able to take enough time off, and 28% are unable to take even one yearly vacation. Even those who manage to take time off end up answering calls and checking their mail while on vacation. More than 11% even participate in con-calls while on holiday.

    Evidently, Indians don't attach enough significance to taking holidays. They understand that vacations are important but let myriad reasons hold them back from taking time off to unwind. Says Delhi-based psychologist Prerna Kohli, "Most people agree that work-life balance gives them better focus at work. But they are still putting up with it instead of changing it."

    Sort out your priorities

    Why do Indians forego their leisure so easily? Experts say it might have something to do with the feudal mindset of not wanting to displease the higher ups. At some companies, taking time off from work is almost seen as an affront to the employer. But this attitude is changing. "While some companies still have policies that discourage employees from taking time off, with more millennials coming into the workforce, this is set to change," says Devashish Sharma, Chief, Strategic Accounts & Alliances, PeopleStrong.

    Our survey findings show that middle-aged people are the most vacation deprived. Only 64% of younger respondents (below 30 years) were not going on vacations, while 71% of those aged 41-50 years were missing holidays.

    Sreejith Nair, a Bengaluru-based bank employee, has his priorities sorted out. Nair travels frequently with his wife and parents and takes at least one 10-day vacation in a year. He also knows exactly how accessible he wants to be while on vacation. "It's difficult to disengage from work altogether. To keep work from piling up, I check my mail once a day, but I don't take any phone calls," he says. This is not the case for most others. Almost 11% of the respondents to our survey answer all mails, take calls, and even attend con-calls while on vacation. Another 58% answer urgent emails and emergency calls. "If it stresses you out to stay connected while on vacation, don't do it. However, if you are able to have the time of your life with your kids while responding to that long email, go right ahead," says Kohli.

    Planning is key

    Once you've got the leave aspect out of the way, the next big step is to plan your vacation. Planning and scheduling well can help you save a good deal on your vacation.

    Swati and Jayesh Dalal are avid travellers who plan their vacations well in advance to get the best deals. "We book our tickets and hotels at least six to seven months in advance to get the lowest fares and tariffs," says Swati. The Dalals manage to take an average of two vacations a year, each 7-10 days long. With careful planning, they are able to keep their budget under ?1 lakh for each trip. Planning your vacation down to the last detail can help you save a good deal. "Once you decide on a destination, decide on modes of travel, local conveyance and accommodation well ahead. Check out local passes and discounts," says Jayant Pai, Head, Marketing, PPFAS Mutual Fund.

    Money worries abound

    Of course, the most important ingredient of the holiday plan is money. Even though Indians are good at saving, this is a major problem for those planning a holiday. Nearly 34% of the survey respondents said they were unable to go on vacation because they didn't have enough money.

    This is largely because many Indians don't consider vacations important and very few list holidaying among their financial goals. A simple solution is to fix a budget and start saving in a systematic manner. Putting a small amount away every month will not pinch but can build a corpus big enough for your family to enjoy a good holiday. Nair has an SIP of ?2,500 in a short-term debt fund, which he liquidates when they are ready for the holiday. Ditto for Mahesh, though she invests in the riskier option of stocks. "Once we reach the targeted amount, we know it's time for a holiday," she says. Turn to page 6 to know how much you need to save every month to go on the holiday you want.

    Where to save for your holiday

    If you are saving for a holiday 1-2 years away, the best option would be a recurring deposit with your bank. For greater flexibility, and possibly higher returns, you can opt for short-term debt funds. Short-term debt funds offer fairly stable returns and are not volatile. Keep in mind that you're saving for a short-term goal, not investing for returns. "The main aim of these vehicles is just to salt away the funds till you need it and ensure it is not spent on other things. You should not hope to make up for funding shortfalls through these," he says.

    The SIP route can also be used to plan bigger holidays for your family. If the holiday plan is more than 3-4 years away, go for options that have a dash of equities as well. These may be able to give you slightly better returns than bank deposits and short-term debt funds.

    The original article could be seen here.

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