Five Financial Steps to Take Before Planning Your Next Trip Abroad
As countries reopen their borders and travel standards and rules are relaxed, many are queuing up and starting to plan their next trip abroad to an exotic summer destination.
That said, international travel requires a lot of planning and preparation well in advance, otherwise you could end up spending huge sums. You should plan your flight reservations in advance; check the validity of your passport, review your hotel reservation and set up your mobile phone, among others.
Most importantly, you need to consider your total expenses and budget wisely.
Here are five financial steps to follow before planning your next trip abroad.
Budget your trip
This is the most important thing to do before planning a trip abroad. You need to cut unnecessary expenses and instill discipline for regular savings. You need to thoroughly research a number of offers available in the market such as hotel bookings and travel modes among others. You should also plan your travel dates well in advance to get the best possible deals.
Create a travel fund
Now that you’ve established your budget, you need to build a travel fund. You can start by saving money at least three months in advance in a separate savings account that you create specifically for your trip.
“The goal is not to get 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 can also consider liquid funds, short-term debt funds, or a recurring bank deposit. When you have a substantial amount of cash, you avoid more expensive debt or last-minute booking,” says Chenthil Iyer, Founder and Business Strategist. Head, Horus Financial Consultants.
travel credit card
With rising general inflation and rising energy prices, the cost of travel has also increased. That said, the right credit cards suitable for foreign travel could give you some relief. Travel cards are basically credit cards that provide benefits to travelers.
These travel benefits can take the form of airline miles, reduced airfares, airport lounge access, hotel discounts, fuel surcharge discounts and bundled travel insurance.
“Before settling on a specific travel card, weigh your options and compare them with similar cards available in the market. Choose a card that best suits your needs. The card should help you with the experiences you envision You need to check card transaction fees, late payment fees, rewards, discounts and acceptability of the card in the country you are traveling to,” Iyer adds.
Travel insurance coverage
Travel insurance covers medical emergencies during your trip. Any travel insurance policy covers medical treatment costs up to a certain limit. This could be for any type of medical treatment or accident. Insurance companies also have a list of hospitals in the network where you could undertake such treatment. Travel insurance also provides coverage against other travel-related risks, such as loss of passport, personal effects, and checked baggage, among others. It also covers trip interruptions, such as the cancellation or interruption of the trip for any reason. It also provides coverage for canceled reservations, including complete trip cancellations, whether by you or the travel agency.
Notify credit card company of travel dates
These days, most credit card companies know if you’re traveling overseas once you’ve swiped your card at an overseas provider. It is therefore important that you inform them of your travel dates well in advance so that your transactions are not blocked or refused abroad. You can notify your bank online or on the bank app. It wouldn’t look good if your credit card got rejected while you were trying to pay for dinner for yourself and/or your family and friends overseas.
Also try to make sure you have Indian currency with you as well as the currency of the country you are traveling in, as a backup option for payment.