How to Start an SIP for your Dream Vacation?

‘Starting a SIP in your 'holiday fund' is the most effective way of building the corpus for that much-awaited vacation’

SIPs inculcate the habit of saving a fixed sum every year and help you meet your financial goals. If you also love to travel and travelling is as important as other financial goals just like buying a car, or your own house then you can benefit by creating a travel fund in one of the ‘best SIP in India’.

Just like you, a lot of people have their bucket-list of dream destinations where they wish to jet off to and rejuvenate. From Universal Studios in Singapore to Skiing in the Swiss Alps, there are options galore.

While the thought of taking up a vacation brings the smile on our face, but the harsh reality is that traveling involves a good amount of money- whether you travel solo or as a couple or with your family.

And the reason why most of our vacations just remain aspirational is professional commitments, urgent expenditures – health or personal, and an ample of other reasons that never motivate us to save for a vacation. But with careful financial planning, you can achieve that too. If you already have the will to go on a dream destination, there is a way - SIP or Systematic Investment Plans.

So, we bring to you some prudent financial steps; that will help you unwind without stressing about sponsoring that long-pending trip.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

So, What Should You Do?

You have the option to leave the money in your bank savings account but that money can be used for any urgent requirements. Because your savings account does not have a lock-in period, it gives you immediate access to your money.

And most of the times we end up using that money for some other expenses. You must be wondering why not start investing in an RD, but that also comes with a fixed tenure and if you withdraw it before the tenure, it will call for penalties.

So, the most simple and disciplined approach is to put aside a fixed amount in SIPs every month. As you do not have access to your SIP investments, there is minimal risk.

Moreover, you can easily automate your SIP investments. You just need to give a standing instruction to your bank and the ‘selected amount’ will be debited to your SIP every month.

And your money will grow at the ongoing SIP interest rate. In an ideal scenario, it is better to choose a SIP date a few days after your salary date, so that you don’t spend that money unnecessary.

How to Create a Holiday Fund with SIP Investment?

First, analyze the cost of your vacation and create a ‘Holiday fund’ to build the desired corpus.

In this fund, you can start monthly SIPs. However, make sure that you invest in this fund after you have invested for your retirement and other long-term goals like your child’s education, his/her wedding, your retirement, etc.

The right approach is to start small if you cannot make huge contributions. With time, as your income increases, you can also increase your SIP contribution towards your vacation fund. When you have the desired corpus, you can withdraw the money.

And voila, your holiday becomes a reality! You can invest in any of the best Sip in India and start saving money, and then take as many vacations you want to take.

Here is an illustration of two couples who manage to take vacation often with their SIP investment:

Here are the two cases of couples who continue to take up vacations only by putting their money in a Systematic Investments Plan (SIP). Just like them you can also put your money in one of the best SIP in India and to quench your wanderlust.

Let’s see how they have been doing it so far:

Let’s take Delhi based Neha and Deepak Case

Millennial couple who prefer to save and spend rather than accumulate debt to fund their vacations.

They have created a separate vacation fund for their holidaying and contribute Rs. 10,000 to a SIP on a monthly basis. With a Systemic investment plan, they have been able to save for their holidays without depleting there regular savings.

Both of them earn well and love to spend on leisure just like most of us. In the past 18 months, they managed to take 3 vacations, including a 10-days trip to Europe and 5-day sojourn in Thailand.

But unlike most of us, the couple doesn’t like to rack up loans or swipe a credit card to make their bookings. As an alternative, they find it sensible to put Rs. 12,000-15,000 every month into a SIP in liquid funds for travel purposes. As most of the vacations are short-term goals and it if you start planning well in advance you would never have to postpone it.