The children's examinations were over and the summer vacations had begun. The family was contemplating to go on a well-deserved holiday trip. There was a wide variety of places -- both domestic and foreign -- to choose from. Finally after much debate and discussions we settled for Singapore-Bangkok-Hong Kong package.

The mood was upbeat. Last year had been pretty good. Apart from a good jump in the salary, the booming economy had resulted in considerable appreciation of my investments in stocks and real-estate.

Moreover, the competitive business environment had ensured attractive air & rail fares, increased availability & choice of hotel rooms, easy financing options, and excellent packages from tour operators.

Therefore, we didn't give much thought to the money part.

The trip was a great success. We all enjoyed ourselves thoroughly. However, in all the fun and excitement we ended up spending way beyond our means. Before we could realise, we found ourselves in a financial trap. The financial balance had gone for a toss. Now it's going to take months to rebalance our budget.

As I sit back and try to sort out the financial mess, I recollect my close friend's advice on holiday budgeting. Had we paid heed to his advice, we could have done away with all the post-trip financial hardships and made our holidays an enduring happy experience.

1. I wish we had planned. And planned within our financial capability. We should have set ourselves a spending limit, which would not have strained our finances. Moreover, we could have kept aside 5-10% as contingency amount, so as to not constraint ourselves too much and also leave some room for unforeseen expenses. Spending more money does not necessarily mean more enjoyment.

2. I wish we had not tried to imitate our neighbours. Just because they had gone for a foreign junket last year, didn't mean we should have also gone for one too. This me-too culture and unbridled consumerism is one of the most common of the causes of financial misery.

3. I wish we had not been swayed by jazzy advertisements and read the fine print on the terms and conditions of our tour operator. While the operator was quite professional and experienced, the advertised cost did not cover all the expenses. These included amongst others airport taxes, entrance fees at a few places of tourist interest, local conveyance when left for shopping on our own, optional meals at local restaurants, etc.

4. I wish we had given some thoughts on gifts too. We were keen to get presents for our near and dears, but most of it was impulse purchases. Instead, we should have listed down all the friends and relatives for whom we wanted to get some gift and the amount we were willing to spend on each one. This would have ensured sensible buying and also not left us short-changed at the last minute.

5. I wish we had updated ourselves about the places we were going to. We could have spoken to friends & relatives who had already been there. Today the Internet gives loads of information. We should have used the Net extensively to arm ourselves with all the knowledge about the place, the weather, the places of interest, local specialties, etc. This would have saved us a lot of time and money.

6. I wish we had not used credit cards. These give a false sense of financial comfort. Using cash or travellers' cheques would have automatically kept a check on our spending and we would not have gone overboard.

7. I wish we had not opted for the 'holiday-on-EMI' offer available. As I didn't have sufficient cash for such a long trip, I took the EMI offer. All we had to do was to just pack our bags and go off to have our fun. The payment could be made later and in installments.

But this essentially meant that we were borrowing money for consumption, which is definitely not a very prudent thing to do. Living off ones' future income is a sure way of inviting financial disaster. Therefore, one may keep away from such schemes, no matter how strong the temptation.

8. I wish we had scheduled our trip during the off-season or may be just before or after the peak season. This was an excellent way of cutting down expenses while still enjoying the best of everything. We would have saved a lot of money -- on tickets, on hotel rooms, on shopping, on local sightseeing, etc. These savings would have been as high as 30-40%.

A little bit of thought and care was all that was needed to make our holidays a memorable experience -- forever. The extravagant and wasteful spending wouldn't have turned our trip into a nightmare later. To put it in a few words -- the motto should be: Limited Spending, Unlimited Fun.

The author is an investment advisor. He can be reached at smatai@hotmail.com

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