As countries reopen their borders again, and travel norms and rules are relaxed, many are queuing up and starting to plan for their next trip abroad to an exotic summer destination.
That said, an international trip needs a lot of planning and preparation well in advance, failing which, you could end up spending huge sums of money. You need to plan your flight bookings in advance; check the validity of your passport, look into your hotel booking, and set up your cell phone, among others.
But most importantly, you need to take into account your total expenses, and budget wisely.
Here are five financial steps you should take before planning for your next overseas trip.
This is the most important thing to do before planning for an overseas trip. You need to cut back on unnecessary expenses and instil in the discipline for regular savings. You must do a thorough research on a number of deals available in the market, such as hotel bookings, and modes of travel, among others. You must also look out for your travel dates well in advance, so that you can avail yourself of the best possible deals.
Now that you have budgeted, you must build a travel fund. You can start by saving up money at least three months in advance into a separate savings account that you create specifically for your travel.
“The objective is not to earn high returns, but to keep it aside for a specific purpose. You could even keep your money in a piggy bank, and break it shortly before your trip. You could also consider liquid funds, short-term debt funds, or, a recurring bank deposit. When you have a substantial amount of money at your disposal, you would avoid a debt or a costlier last-minute booking,” says Chenthil Iyer, founder, and chief strategist, Horus Financial Consultants.
With the rise in general inflation and energy prices, the cost of travel has increased, too. That said, the right credit cards suited to overseas travel could provide you with a relief. Travel cards are essentially credit cards that offer benefits to travellers.
These travel benefits could be in the form of air miles, discounted airfares, airport lounge access, hotel discounts, fuel surcharge discounts, and bundled travel insurance.
“Before going for a specific travel card, weigh your options and compare with similar ones available in the market. Choose a card that meets your requirement the most. The card must help you in the experiences you plan to have. You must check the card’s transaction fees, late payment fees, rewards, discounts, and the card’s acceptability in the country you are travelling to,” adds Iyer.
Travel insurance covers for medical emergencies during your travel. Any travel insurance policy covers the cost of medical treatment up to a certain imit. This could be for any type of medical or accident treatment. Insurance companies also have a list of network hospitals where you could undertake such treatment. Travel insurance also provides cover against other travel-related risks, such as loss of passport, personal belongings, and checked-in baggage, among others. It also covers trip disruptions, such as cancellation or curtailment of trip due to any reason. It also provides coverage for bookings that are cancelled, including entire trip cancellations, whether by you or the tour company.
These days, most credit card companies would know if you are travelling abroad once you swipe your card at a vendor location abroad. So, it’s important that you inform them of your travel dates well in advance so that your transactions are not blocked or declined abroad. You could inform your bank either online or on the bank’s app. It wouldn’t look nice if your credit card gets rejected while you are trying to pay for dinner for yourself and/or family and friends while abroad.
Also, try to make sure you to carry the Indian currency as well as the currency of the country you are travelling to, as a back-up to payment option.
