Taking a vacation? Avoid these 5 common financial mistakes

Most of us look forward to taking a vacation from our daily hectic schedules. This summer when you plan a trip, make sure you avoid these financial planning mistakes:

1. Not planning the vacation in advance: This is one of the most common and costliest mistakes generally made. If you plan ahead for your vacation, you can get a better deal on your travel fare. Fares are costlier once the date approaches. Even the hotel bookings get costlier during summers. So we end up paying higher for the travel arrangements and accommodation if we fail to plan ahead.
2. Not having a budget plan: Any trip can be ruined if you suddenly find yourself without enough money to cover your expenses. You can avoid such scenarios by creating and following a budget specifically designed for your travel destination. Even if you book an all-inclusive package, be sure to calculate how much money you'll need in case of an emergency. Your budget should cover important items such as food, accommodation and transportation.
3. Not sticking to the budget: Not sticking to the budget is another common mistake people make on vacations. We allow ourselves to spend that extra buck thinking it's only once a year. We find some good deals on products, a bargain too good to miss out and buy things without considering whether it is within our budget or not. We often fail to do our research on the food arrangements and end up spending more on meals. Generally, restaurants at famous places are costlier than at other locations. So make sure you have a list of available restaurants and their price range in the locality you are visiting.
4. Not knowing your credit card charges if travelling abroad: Sometimes card companies levy extra charge on debit and credit cards used abroad. Know the additional charges you have to bear while making any transactions using your card. Contact your card provider to know about fees that may apply for purchases while on foreign land. And if still in doubt, take cash instead, but know the exchange rate.
5. Losing the receipts: During our vacations we treat ourselves with a new phone, music players or watches. Being busy enjoying the vacation, we generally forget to file all the receipts of the payments. So if we want to get anything repaired or serviced we don't have the receipts and we end up paying for those Maintaining receipts of every transaction helps us in analyzing our vacation spending.

Nitin Vyakaranam is the founder and chief executive officer, ArthaYantra, an integrated online personal finance company.

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