All of us wish for a good vacation. To be true everyone wants their Holidays to be the best. After all one doesn’t get to go out and relax very often. So whenever this outing happens, it should be perfect. A friend of mine was going to Europe with his wife for holiday. When I inquired how much time it took for them to plan the trip, they replied they had to do lot of homework to get this task accomplished. One has to be sure that nothing goes amiss beginning from tickets to stay and safe return home. Though there are many holiday planners available in the market, one needs to be sure that they are not looting you from your hard earned money. And most important aspect, one has to look at the financials as well. How much to save for the trip arrangements – tickets, stay and how much cash should one carry?
Being a financial planner I couldn’t help but compare both Holiday planning and Personal Finance. Is holiday planning any different from personal finance. After all in personal finance all you do is just planning – be it your retirement, buying a dream home, Insurance planning, planning for your kid’s higher education. In fact, planning for dream vacation is very much a part of personal Financial Planning. Then why is there so much difference, when we have to plan for a vacation we put all our efforts in getting everything right, and when someone asks us about our financial planning, we tend to close our eyes and ears and pretend as if we didn’t hear in the first place. Is it because of the way we humans think? Since, we don’t relate to future very easily, we think that it will never come, hence we don’t plan. Are we so smitten by this very present that we forget to plan for our future. As per Global Financial Literacy survey by S&P only 24% of Indians are financially literate. That means over 76% of Indians don’t understand concepts like inflation, compounding, interest and risk diversification. 76% is a big number for us to think if we are doing our savings the right way.
Your savings is like a Train. If you miss catching it, it will take long time to get into it again, as we will miss on to the Midas touch of compounding. So earlier one starts, the better it gets with time.
Charu Hastir, CFPCM is founder of www.theriteplan.com. Rite plan is an online financial planning portal created to achieve a single objective of providing easy and Do It Yourself Financial Planning to netizens. Rite Plan is wholly owned by Tikkun Olam Financial Planning Services LLP. Please visit: https://theriteplan.com/index.php?route=common/home/