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Greece or Maldives: every holiday has its own budget.  How much do you save each month?

Greece or Maldives: every holiday has its own budget. How much do you save each month?

Many have already done so by choosing June and July, others are about to pack their bags and leave for the many long-awaited vacations, but whatever the destination, vacation is always an extra and important expense to your budget. Investments are a valid ally so you can leave for your dream vacation: think about it in time Save small amounts Each month does not affect daily life and allows you to arrive prepared for the moment when huge expenses will appear at our door.

And so Gimme5 – the digital money management solution that allows you to set aside small amounts, starting from €5 per month, via your smartphone and invest them in a mutual fund – shows how by starting to save early, it is possible to achieve over time the amount you can, depending on your availability , to leave for the trip of your dreams.

Greece, New York or the Maldives: a vacation that goes with your budget

So Gimme5 speculates that if one’s desire is the same 3 star holiday on a greek islandJust set aside €26.25 per month to reach an amount of real value of €1,500 in 5 years (net of inflation, assumed to be 2% per annum). And if you want to climb the skyscrapers of the Big Apple and spend an unforgettable 4-star vacation in New York City, the monthly savings will rise to 52.50 euros, bringing the amount to a real value of three thousand euros in 5 years. Finally, for a comfortable vacation in the Maldives, saving a higher amount, i.e. 105 euros per month, in 5 years, the money for your 5-star vacation will have a real value of 6000 euros.

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By starting to save early, you can seize the opportunities that investing provides to grow your money faster, and defend it from inflation. For a 5-year term, you can choose to invest through a balanced mutual fund (the composition of which is mixed between government securities, bonds and stocks), which is ideal for a period of time of that term (it’s actually a mid-way instrument between a bond fund – set for short periods – and an equity fund Recommended for broad prospects.

Assuming an average annual return of 3.44% net of inflation (derived from the average returns of ‘Credit Suisse Global Investment Returns Yearbook 2020’, Credit Suisse, London Business School), it can be seen that value generation is generated through ‘investment and strength’ Compound interest (accumulation of interest on interest), makes it possible to reduce the average monthly savings needed to get the same nest egg: in the case of a 3-star vacation, it is enough to save €22.95 per month; for the four-star category, the monthly savings will be reduced to 45.49 euros, while for a five-star holiday it will be necessary, 91.79 euros.

Save money on vacation in a few simple steps

However, once you leave for the holidays, saving should always be a point not to be overlooked to avoid unpleasant surprises on our return. In this regard, to give some simple ideas and tricks Gianluca Sedotti, independent financial advisor and CEO Wealth International Corporation.

First of all, to save money on vacation, it is better not to spend money, Neither before departure nor after departure nor at airports given the very high commissions. The suggestion is to use card payments as much as possible when you’re abroad and withdraw “safety” cash directly upon arrival at the destination, just in case some merchants won’t accept the card.

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It’s also helpful to stick to a budget: You can make a spending plan by organizing various trips on vacation in advance, before departure, at least in principle. To avoid overspending, you can use a file Prepaid cards to be loaded If necessary with an exact number. Finally, it will also be usefulTake insurance by comparison Costs and ceilings set out in different policies to understand what is appropriate to do. The last thing that many may not know: when traveling abroad it is possible, in the vast majority of cases, VAT refund. It is a tax-free shopping system, a method of purchase that allows travelers to recover the value added tax paid on purchases made in the visited country by going through customs. Of the 130 countries in the world that apply VAT, about fifty countries allow payment including Australia, Argentina, Korea, Iceland, Lebanon, Liechtenstein, Norway, Singapore, South Africa, Switzerland, Thailand, Turkey and Jordan.