Dubai: Now that the holiday season is here, it’s tempting to get carried away in our spending. But you don’t have to break the bank or go into debt just to go on vacation.
If you’re an expatriate jetting off to your home country for the summer break, or just looking for a quick getaway, chances are you are depending on your paid leave salary to get you by on your break.
Most people do.
Many expatriates treat their entire month’s salary as a "vacation allowance" often forgetting that there will be expenses regardless of their presence.
You don’t get a holiday from paying your utility bills or rent, remember?
Failing to set aside funds for recurring expenses — by spending most of it on a holiday — is just way of derailing your finances.
Borrowing, usually by using plastic money to relieve the situation, is never a good idea.
Andrew Prince, a financial planner, told Gulf News that careful planning is essential to make a vacation or annual holiday memorable.
“Anything that you do in life requires planning. You won’t build a house without a plan, a blueprint or a foundation, right? The same is true with holidays,” he said.
“The foundation of that holiday is planning at least 12 months in advance.”
Here are tips on enjoying an annual vacation or break without taking on debt or going broke:
1. Make a plan
Don’t just plan where to go and what to do. Plan also how to finance it. Budgeting is vital. Set your budget, stick to it and track your expenses.
Most importantly, decide not to go into debt. Always compare prices and pay cash.
As American financial guru Dave Ramsey says, “The best vacations are those that don’t follow you home”.
“You can go away on your two-week vacation, but if you come back heavily in debt, it leads to an awful lot of financial stress and tough decisions when you come back. So did you really have a holiday? No. Often, the debt lasts a lot longer than the suntan,” Prince said.
2. Organise your budget
If you think your holiday is going to cost you $1,200 (Dh4,400), set aside $100 a month 12 months before your break. At the end of the year, you will have $1,200.
If you will need Dh12,000, save Dh1,000 each month.
Dalton is a Filipino welder in Dubai earning Dh4,000 a month, including overtime. In 2017, he went on his first annual holiday after working for two years with Dh24,000 pocket money by doing the above.
Also, purchase a pre-paid cash card and load that up with the local currency in the destination of your choice, Prince said. Sending money ahead of time when exchange rates are to your favour will also help.
Do not get the foreign exchange at the airport because you will pay a high price for the convenience.
Always pay in the local currency.
3. Live like a local
The key is in the preparation. Know where you’ll stay; research the best bargains. Look at reviews and independent reviews.
Since Dubai is home to almost 200 nationalities, ask a friend or colleague from that country for referrals and the best deals.
Eat where the locals eat. You pay a premium for the setting you are in. You’re a captive audience. Go prepared, Prince said.
4. Insure yourself
Anything can happen when you’re on vacation. So it’s best to have a safety net by getting a travel insurance.
Some unforeseen circumstances when travelling include medical emergencies, injuries, emergency assistance, evacuation, personal accidents, flight-related problems such as flight cancellations due to bad weather conditions, delay or loss of baggage, theft, etc.
Travel insurance costs between Dh50 and Dh1940 for policies for individuals, groups, families or frequent flyers. Choose which suits you best for your own peace of mind.
5. Don’t fall for souvenirs
Often, souvenirs given to friends end up gathering dust in a corner. Unless your friend is a collector, there’s no point contributing to his mess at home.
Don’t buy crap. Buy sweets for your giveaways instead.
6. Manage expectations
In some Asian cultures, expatriates who come home on holiday are expected to treat family members and relatives—if not the whole village.
Giveaways are also common as a sign of goodwill.
But if there’s no money in the budget and you’re only doing it because you’re morally obliged, it’s not a crime to say no, Prince said.
“Why not invite them to your house and cook them a nice meal? Organise something at a karaoke bar and make it a fun environment. Don’t make decisions when you’re obliged to do it,” Prince said.
“People appreciate the fact that you have travelled thousands of miles to meet them.”
7. Choose memorable activities like volunteering
Volunteering overseas can also be a good break away from city life.
“My friend in the UK volunteered to work in an orphanage in southeast Asia. They gave her very basic accommodation and food. She paid for her air tickets. She got one day off every week to go around the country,” Prince said.
“So consider volunteering. You get to do good for others and for yourself. At the same time, you get to experience different countries while keeping within a sensible budget.”