How to achieve your travel goals without breaking the bank!

Published: April 23, 2022 at 6:00 am

Last Updated on December 4, 2022

In the last edition of the reader story, we met Arka and Rupali, a young couple, trying to balance travelling and investing. In this article, they share more details on how to manage our travelling dreams within our income.

So, you want to travel?? Are you thrilled by that picture-perfect sunset by the Maldives sea, the enormous beauty of the Himalayas, the silence of Corbett National Park or out-worldly images from chasing Northern lights in the Icelandic sky; and wondering how to tick off those costliest items from your bucket list without compromising your long term goals then sit tight. In this article, we will guide you on how to craft that perfect travel memory. Because after all our life is short and the world is wide. 

So as the great Dalai Lama said “Once a year, go someplace where you have never been before”

In this article, we will try to create a sustainable approach to how to manage travel goals financially without impacting your long-term investment journey. 

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    If you really want to travel, it should be altogether a different bucket of savings along with all your other savings. The best way to manage travel along with our long-term goals is to fill the travel pot bit by bit based on your travel need (more on this, later) while continuing to invest in your fixed long-term goals. Of course that Car you thought of buying at 27 would come at 30, that house-loan you thought of clearing at 40 may stretch till 45 but that’s what, first ask yourself – Do I want to travel and live my life as well along with all my responsibilities? 

    If yes, then this article is for you to understand how to manage travel within your income bucket. As travel is not a fixed goal and it is recurring in nature; it requires a little modification of your tested and verified goal-based investing.

    The 3 broad sections that will be covered here are

    1. Understanding your travel needs
    2. Preparing/Planning for it
    3. Executing it


    Understanding your travel need:

    One thumb rule to understand your travel need is to always remember that there is no holy grail of travel. It is an experience and what gives you satisfaction may be completely different from the common myths on “How to Travel”. Always focus on what gives you happiness and joy. 

    The benchmark and definition of your travel can’t be your friend’s or any travel influencer’s Instagram profile, it can’t be a thousand articles on “How you should travel” floating on the internet. Remember as you personalize your personal finance, travel is also very much a personal experience. So, travel the way you feel happy and not hunt likes on social media.

    You can be vacationing in a luxury resort sometime or trekking in the high Himalayas or backpacking into a completely new country – there is no one type that should define your travel style. However, based on broad travel styles and the choice of locations, the below table is created.

    Type of travel
    LocationIndicative expense
    BackpackingWithin IndiaLow
    BackpackingNear India (mainly SE Asia)Medium
    BackpackingOutside India (Europe)Medium-High
    BackpackingFar outside India (South America)High-Super High
    VacationingWithin IndiaMedium
    VacationingNear India (mainly SE Asia)High
    VacationingOutside India (Europe)Super High
    VacationingFar outside India (South America)Super High

    Let me explain some terms mentioned above and what I mean by them

    Backpacking: When you travel majorly budget style, ready to stay in basic hostels or Airbnb’s, explore the place for the whole day by rented vehicle or public transport and eat meals at local restaurants. Trekking also comes under this category. You may or may not have big-ticket adventure activities included here. But this must be DIY planning and not with a travel agent (especially outside India)

    Vacationing: When you travel majorly for relaxation, choose a luxury stay and spend time on the property, eating good food at good restaurants. It can be through travel agents.

    Indicative expense buckets of “low, medium, high” are completely personal. For example, what I consider low maybe medium for someone else. Below is what I personally consider as each bucket.

    • Low – less than 1 lac for two
    • Medium- 1 lac to 2.5 lac for two
    • High – 2.5 lac to 5 lacs for two
    • Super high – More than 5 lacs for two (yes places like that exist and it can shoot more than that even if you’re backpacking. Welcome to travel 😉)


    Preparing/Planning for it:

    If you want to manage travel finances effectively, there is only one universal truth. Please, please, please plan in advance. 

    What I mean by that is, that you should have at least the visibility of your next one-year travel plans. And in case you want to strike off some exotic places which expense wise can be high or super high, more than one year’s visibility is advised. 

    For example, in a normal middle-class family, one can’t travel to South America in 3 months of planning without compromising long term investment goals. However, a road trip or a weekend getaway can be completely impulsive.

    So, plan things in advance (it helps in getting leaves from the office and reduces your cost) and save for it. Undoubtedly, it is a short-term goal, so you must keep it in RD or in your savings bank account. Please don’t keep the money in market-linked schemes.

    How much you must save, will depend on your indicative travel expense for that year (use the above table to get to the indicative number). You can divide the whole year’s travel expense by 12 and save the same money every month.

    Let’s say you want to have one within India and one outside India (SE Asia) trip in a year. Based on your travel style for that trip and your definition of low, medium, and high; you can come up with the total money needed for travel in that year. Now save an equivalent amount each month. 


    You can plug in one high/super high trip for once in 1.5/2 years and save that extra fund by choosing low expense travels in the previous year. 

    Remember, this money can also act as an extra cushion for your Emergency Corpus as well since it will be saved in Bank/Liquid funds.

    Executing it:

    So, you have understood your need, planned extensively and saved for it. Finally, the time has come “To travel”!!

    Now comes the most important part of sticking to the budget!! And if your travel is DIY, then it is all the more important to keep track of your expense and not just spend money in the flow. So, follow that excel you have prepared for budgeting the travel and respect it. 

    Even if you are using a credit card, don’t exceed your budget by more than 5% unless there is an emergency. 

    Before I wrap up, some hacks/tips you can use to stick to your budget or plan your budget optimally

    Flights:  this can be easily 35%-40% of the cost if not more while travelling outside India. So, plan to book your tickets at least 2-4 months in advance and use websites like Skyscanner in incognito mode. Sometimes you can ask anyone you know in your visiting country to book the tickets for you. (Especially in Europe, there are few cheap flight booking websites not accessible in India). Try to play around your point of entry or exit and starting point of India to see a variation in the ticket price. Sometimes flights from Mumbai can be much cheaper than Bangalore, even if you book a domestic roundtrip flight from Bangalore to Mumbai it will be way cheaper. Also, see The ultimate guide to booking cheap flight tickets in India.

    Place of stay:  Always check Airbnb if you don’t want luxury on your trip. Sites like Agoda and also work perfectly. Just ensure you don’t choose a costly stay and remain outside for the whole day

    Experiences: If you want to have the must-try dining experience of a particular place or an adventure activity, make sure those costs are factored in before. In case you decide it on the go, you can always try to optimize spending in other areas to avail that one-time must-do experience

    Miscellaneous:  At least keep 10%-15% as your miscellaneous budget which can take care of all impromptu expenses like tips, shopping, any emergency needs.

    You can check how we managed to travel to Iceland within 1.25 lac per person (all-inclusive)

    Hope the article has helped you in giving a glimpse of how to fit travel into your life without compromising on long term goals. Keep travelling places. 

    “Don’t listen to what they say, go see !!”

    Ready to get started?  Check out our “Ultimate Travel Training Kit” by Pranav Surya. It is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download).

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      Pattabiraman editor freefincalDr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over nine years of experience publishing news analysis, research and financial product development. Connect with him via Twitter or Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
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