Now that summer is here, you might be planning a holiday. Researching destinations, comparing flights, and finding exciting activities is easier than ever with access to the internet. That’s why we now spend more time than ever organising our holidays.
According to Expedia, the average person spends over five hours researching their trip, looking at 141 pages of travel content before deciding where to go and choosing accommodation.
You might spend this much time researching your holiday because there are a lot of crucial steps involved with booking a trip. Yet, you may not realise that many of those steps are similar to important aspects of financial planning.
- Decide on the kind of trip you want
Before you think about the specifics, you may need to decide what you want your holiday to look like. For example, would you enjoy a city break with lots of opportunities to learn about the history and culture of a country? Perhaps you might prefer relaxing on a beach for a few weeks instead.
It’s important to consider what you want to get out of your trip first. Then, you can begin looking at different destinations that can offer the type of holiday you want.
You might find it useful to approach your finances in the same way. Before you consider your pensions or investment strategy, you may need to decide what you want to get out of your financial plan.
Understanding what you want your lifestyle to look like now and in the future gives your financial plan some direction. This is similar to how understanding what kind of trip you want narrows down your choice of destinations.
Once you have clear goals, you can then develop financial behaviours that help you work towards those aims.
- Pick the most suitable dates
Next, you’ll need to think about when you want to go on your trip. There are several factors that might inform this decision. For instance, you might need to consider your work schedule and when you can take time off, what the weather is like at different times of year, and the busiest periods in your chosen destination.
Timing is crucial because it could have a significant impact on the quality of your trip. If you pick the date poorly, you could end up visiting overcrowded destinations or missing the best weather.
You may find that timing is equally important when developing your financial plan because you’ll need to choose a target date for your retirement.
If you set this date too early, you might not give yourself enough time to build your savings. Yet, if you wait too long, you could miss opportunities to achieve your goals in retirement.
We can help you determine the most suitable time to retire so you can fund your dream lifestyle.
- Set a budget to save for your trip
Once you’ve planned your trip, you’ll need to pay for it and save some spending money. The easiest way to do this is to review your budget. By making some simple adjustments, you can free up funds to set aside for your holiday. The better you are at budgeting and cutting down on wasteful spending, the more you’ll have to put towards your trip.
Similarly, if you want to reach your long-term financial goals, you’ll need a detailed budget. By tracking your expenses and eliminating unnecessary spending, you can contribute more to your savings and investments for the future.
- Invest in the right protection
Your summer holiday should be a time to relax and unwind, explore new places, and spend time with loved ones. Unfortunately, you never know what life could throw at you and there is always a small chance that you might have an accident or fall ill while you’re away.
That’s where travel insurance comes in. If the worst happens, you can rely on your insurance provider to cover medical costs and any additional travel expenses if you need to cut your trip short. Hopefully, you won’t need to use it, but a good travel insurance policy acts as an important safety net.
You’ll need the same safety net to underpin your financial plan. Protection policies such as life insurance could ensure that your family are looked after if the worst happens to you. Additionally, income protection might allow you to continue paying your living expenses and contributing to savings and investments for the future.
In short, the right protection can prevent unexpected disasters from derailing your financial plan.
- Consider seeking expert advice
The rise of online booking sites created a lot of competition for travel agents, and you might believe that high street travel companies are all but obsolete.
However, a survey reported by Business Insider found that 38% of millennials and Gen Z said they prefer using a traditional travel agent over booking online. This option might be preferable because you benefit from an expert who can do a lot of the research for you before making their suggestions.
They can also answer any important questions you might have, especially if you’re travelling to exotic destinations that you’ve never visited before.
The same kind of expert advice could be beneficial when trying to develop a financial plan. We can help you determine your goals, research and understand different options about pensions and investments, and overcome challenging situations.
Get in touch
For more information get in touch or email us at advice@mlifa.co.uk.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.