Keeping inflation in mind, before planning a trip, you should keep the following points in mind:
Clarity of objectives: Whether it's a luxurious international vacation or a budget-friendly domestic trip, you need to clearly define your vacation goals.
Type of trip: You need to decide whether you want to take a trip abroad or whether you want to embark on an international adventure. When planning your trip, you should consider factors such as travel restrictions, visa requirements and exchange rates.
Time limit: To determine your investment, you need to calculate the time horizon until your planned vacation.
Nehal Mota, co-founder of Finnovate, a financial planning company, says: “Building a vacation portfolio is the first step towards realizing your travel dreams. By clearly defining your goals, considering travel types and timelines, and accounting for inflation, you can create a solid plan that adapts to changing aspirations. Through Systematic Investment Plans (SIPs), you can ensure financial discipline and security while accumulating funds for your dream vacation. An extravagant European adventure, smart planning and disciplined investments can make your vacation dreams come true. Start building your vacation portfolio today and embark on unforgettable trips with your loved ones.
Now suppose you are planning a two-week family adventure trip to Europe, for four members in total, two adults and two children, let's calculate the required cost.
The per person cost for a family of four, for adults, would be Rs 3 lakh and for children (aged 10 to 15 years), Rs 2.5 lakh. The total cost of the trip would be Rs 11 lakh. Inflation taken into account is 6 percent for five years.
Assuming an average annual inflation rate of 6 percent, the future cost of travel can be calculated as follows:
Future cost = Current cost * (1 + inflation rate) ^ Number of years
= Rs 11,00,000 * (1 + 0.06) ^5
= Rs 11,00,000 * (1.06) ^5
≈ Rs 1,472,048.
