Things to Settle Before Planning a Family Holiday

Planning a family vacation requires a clear understanding of your financial standing, according to financial planner Aliyah Natasya. She stresses that before booking flights or planning itineraries, families must conduct a comprehensive evaluation of their financial health.

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Vacations are not a taboo subject in family financial planning; the problem isn't the vacation itself, but how it's managed.

Natasya advises that essential financial pillars must be secure before considering leisure spending. This includes ensuring emergency funds are intact, ideally covering three to six months of household expenses. "Emergency funds must be 100 percent whole," she stated, emphasizing that these funds should not be touched for any reason, including vacations. Furthermore, all educational expenses for children, such as tuition fees, uniforms, and books for the next semester, must be fully paid.

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Emergency funds must be 100 percent whole. Before booking plane tickets, ensure that emergency funds equivalent to at least three to six months of household expenses remain untouched.

To avoid financial strain, Natasya recommends setting up a separate savings fund specifically for travel. This dedicated fund should be built up gradually over time, distinct from regular household budgets. She strongly discourages using high-interest debt instruments like online loans, "buy now, pay later" services, or credit cards for holiday financing. "If the source of vacation funds comes from online loans, paylater installments, or credit cards that cannot be paid off in one billing cycle, it's not a vacation. It's debt being celebrated," she warned.

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Not almost paid off, not partially paid. Registration fees, new uniforms, and books for the next semester must be fully paid before the vacation budget is touched.

Natasya also highlighted the importance of managing debt-to-income ratios. If monthly debt payments exceed 35 percent of income, the financial flexibility for additional expenses like a vacation is significantly reduced. "If your total monthly installments exceed one-third of your income, then a big vacation must go on the waiting list, not the planning list," she advised. Ultimately, the decision to take a family holiday should be made only after all basic needs, educational costs, and financial protection measures are met.

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If the source of vacation funds comes from online loans, paylater installments, or credit cards that cannot be paid off in one billing cycle, it's not a vacation. It's debt being celebrated.