Disclaimer: Welcome to this episode of the Kairos Podcast! Kairos is a podcast on Financial Planning, about doing the right thing at the right time. This audio content has been made available for information and educational purposes only. Nothing contained in this audio shall constitute or be deemed to constitute advice. Always seek the advice of a professional with any questions you may have regarding your financial decisions.

Podcast Transcript:

Hi. I am Namratha and we welcome you back to Kairos – the ithought plan podcast. It’s almost summer and my friends and I are planning a vacation. I am so excited to go on a holiday since all my friends have agreed to take some time off this summer. But there is so much confusion as to which place to decide and how to go about it. I want to go to Shimla and my other friend wants to go to Goa. We don’t know which one to plan for and what are the other things to keep in mind. It’s so stressful like I don’t know the whole purpose was to have a very relaxed time and chill, but I think we have defeated the purpose.

Samyuktha: I can completely relate to that but trust me, it is going to be a lot of fun and is definitely worth putting in the effort into planning your vacation now. Last year I planned a vacation for 8 people, and we went to Goa. It was probably one of the best trips I have had in my life. In fact, one of my actual hobbies is to plan vacations, even if I am not the one who will be taking them. I really love learning about what each place has to offer and look at both, the local perspective and tourist perspective of the place. So, I would really love to help you go through this process of planning your vacation.


Namratha: But don’t you think planning makes it sort of boring and takes the fun element away? That’s why we wanted to take a break and spend some relaxed time. But now it is adding to the stress. So, what would you suggest we should do to plan it properly?

Samyuktha: I think there is a very common misconception that planning takes away the fun – it really doesn’t. When you are travelling with a larger group, there is definitely some level of planning that needs to go into the entire exercise. If you are a solo traveller, you can afford not to plan anything and just play it by the ear. But if you are going with your friends or family, you need to be accommodative that different people would want to do different things on the trip. For example, if you are going to Himanchal, someone would want to go on a trek, someone might not. So, you need to find a balance between all of these things, right? You can still keep the fun element while you plan because there are always things outside the itinerary that you have to plan. So that part can be a surprise for a few people who aren’t keen on being actively involved in the planning process.

From my experience, I would broadly say that there are three approaches to planning a vacation: 1. Based on the destination – For instance, with your friends are looking at either Goa or Shimla as your destination; 2. Based on time – say when all of you can take a break during the summer; and the one that most of us fall into 3. Based on a budget.  So, based on what you decide, we can take this forward.


Namratha: That’s an interesting way to look at it. So, if I was focussed on a destination, it would be more like my dream vacation. If I were to look at being time-specific it is usually because of constraints like holidays or if planning with a family, then not everyone will be free at a particular time. Elders prefer to come only if there is someone to take care of them.

In my case, I would be looking for a budget vacation. We are a mixed group. Some of them have started their careers only now and they don’t want to spend their entire savings on their vacation. So, in my case, I would be looking more of budget vacation.

Samyuktha: That’s great! So at least now you know what ‘hat’ you have to wear for the next part of the planning stage. For a budget vacation, I would say that most of your expenses would go on travel and accommodation. So, if all of you are in the same city, you can choose a place close to you. If you are in different cities, then you can pick a place that is convenient for everybody. The reason why my friends and I picked Goa, even though it is a cliched location was that connectivity wise it was easiest for all of us. A couple of my friends were coming from Mumbai, a few of us were coming from Chennai, we had one person travelling from Visakhapatnam. So, the easiest way for us to connect was by flight and Goa was a place we knew wouldn’t let us down in terms of vacation experience, but it was also easy for everyone to get there. Planning your travel in advance can help save some of those costs.

The next step is to choose an accommodation. It is a good thing to travel in a big group because it is more economical – for our entire stay of four days, we spend about Rs.3,000 per person on accommodation for a really good place. Now you have a lot of options and are not restricted to just hotels. You have Air BNBs, Homestays, and could also stay with your friends if you are travelling in a smaller group, depending on where you are going.


Namratha: We are also considering going to goa, what did you do for transport arrangements?

Samyuktha: I think the beauty of Goa is that it is a very well-known tourist destination, so it is very easy to rent a car or bike. If you are a bigger group, a car would be more economical – that is what we did. You want to have that mobility because it is not that well connected in terms of public transport. You might want to go from one end of Goa to the other depending on what you are planning at any point. So, this is a flexibility that you need to have. You should also have some sort of allocation for your transport as well in your budgeting plan for this vacation. Another thing that we need to account for is that you are going for a vacation to enjoy yourself, so you are going to spend a disproportionate amount of money on entertainment which you may not do on a regular basis. So, make sure that you have enough set aside to enjoy your shopping, sightseeing, or specifically in the case of Goa, the water sports people would love to try. So, make sure you allocate enough money for this so you can experience it to the fullest – is very important.


Namratha: That’s great. So, what are the other essential things I should keep in mind before planning a vacation?

Samyuktha: I don’t want to overwhelm you with too much information but basically, what you should know would vary with where you are going and who you are going with. Say planning a vacation with your family is going to be very different from planning a vacation with your friends. Similarly, planning a vacation internationally is very different from planning a domestic vacation.

So, one element for a domestic vacation for salaried people would be leave-travel allowance which represents the payment made by an employer which employee use for travel expenses while on leave. And such an allowance is eligible for tax exemption. So, this exemption is allowed for any employee for two travels taken within a block of four calendar years.

Another thing that applies to both domestic and international vacations is Travel Insurance. It basically covers any unforeseen losses that happen during your trip. A basic policy would generally cover medical emergencies in international policy, but a more comprehensive one would cover things like trip cancellation, lost luggage, flight delays and other things. Especially when you travel internationally, flight delays can throw you off because if one flight gets delayed, you would miss the connecting flight. You don’t want to spend out of pocket for something that is not your fault. Another thing to keep in mind, which has come in very recently is the introduction of TCS for foreign tour operators. So, if you are looking at an international tour package, it is going to cost you 5% more than before.

One other important aspect is how you are going to manage your expenses. If you are travelling internationally, ideally you would want to keep dollars because USD is easily accepted in any country. But you could also be using a debit or credit card. There are a few RBI regulations that are going to come into effect in the middle of March. One of them is that new cards will not be automatically enabled for international transactions. So that is something that you would manually have to opt-in for. You could also use this as a reason to check-in if your card is enabled for international transactions or not.

Many of us don’t know that withdrawing cash is always more expensive. Especially in a credit card, the cash withdrawal is treated as a loan. There is something known as ‘Cash Advance Fee’ which can vary from 1% to 4% depending on the credit card company. So now you will end up paying both, currency transactions as well as interest on that particular cash withdrawal. There is also a foreign currency conversion fee – any purchase that you make on your credit card abroad will be in that currency, but you will settle the bill in INR. I could use this option called DCC (Dynamic Currency Conversion) or I could have my service provider convert it form INR to USD. It is always cheaper to do it through the service provider, but many people opt for DCC instead. Another thing is the Foreign Transaction Charge on cards. This could be anywhere between 3% to 4 % and may vary from bank to bank. So being aware of all these costs is very important every time we swipe. It’s not the same as swiping at a local grocery store.


Namratha: Okay looks like you have done a lot of research and with your travel experience, what are the other hacks you would like to share?

Samyuktha: Sure. There are like four to five tips I could share with you. Firstly, if you have been bitten by the ‘travel bug’, you would obviously be looking to get the best deals. One way to do that is to set Google Alerts for flight prices and hotel prices so you would know when it is cheapest. Over some time, you would know which season the prices are the cheapest and you would be able to plan accordingly. The next thing is, while you are travelling, the small things you could do to keep yourself safe is to always carry the details of your cards so that you can block it if it gets stolen at any point. Another thing relating to cards is how you select your credit card. If you are going to travel a lot, it would be wise to choose a one on which you earn miles or gain access to airport lounges or get travel deals as well. In terms of keeping your money safe when you are travelling, always make sure that your card and money are kept in different places. Most of us keep both in our wallet, but if that gets pickpocketed, then you are left stranded in a place without any money. Also, if you are travelling alone, that is not a very good place to be in.

For those who are considering an international vacation, instead of using your credit or debit card, you can look at a travel card which is preloaded with currency. The basic reason is all the charges that are applicable every time you swipe – it becomes very expensive. You should, of course, have that facility when in an emergency, but it doesn’t have to be your go-to option.


Namratha: Wow! Well, this a bunch of things one would want to figure our planning for a vacation. You have made my job way easier now. I am surely using these tips and ideas you have shared is going to help me plan my vacation in a very organised manner and not be stressed about it. So, thanks for sharing these tips and hacks.

If you are also one of us who are not aware of how to go about planning a vacation, I am sure this podcast would help you. Thank you all for listening to the podcast. Stay tuned for more updates by subscribing to our channel.



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