How to travel without draining your savings? Gen Z and millennials are budgeting smarter and investing to take holidays

From SIP-style savings to advanced planning, learn from experts on why smart financial decisions make your trip stress-free.

A holiday can be memorable and rejuvenating, but don't let that joy be temporary, only for financial stress to build up once you return home and realise how much you have spent. So, how do you ensure you are not returning home to a frightening bank balance? After all, a trip is meant to restore your wellness, not leave you drained with a hole in your pocket.

This concern is behind a shift in how Gen Z and millennials approach travel, encouraging them to be more financially savvy. Let's take a closer look at what they are doing differently and how it is reshaping the way Indians travel.

In an interview with HT Lifestyle, experts weighed in on how financial planning is changing the way Indians travel and why holidays are no longer treated as impulse expenses, but as long-term financial goals.

How is advance planning changing the way Indians travel?

Here are some notable changes being observed:

1. Travel plan begins with a budget

Travel planning is no longer impulse-oriented. As per Pranav Dangi, founder and CEO of The Hosteller, final considerations are becoming an integral part of planning a holiday.

He said, “The biggest shift we're seeing isn't really about where Indians are travelling anymore. It's about the way they think about travel long before they even book it. A few years ago, trips were often spontaneous. People would pick a destination, get excited about it, and figure out the finances later. Today, it's almost the reverse. Travellers are setting aside budgets months in advance, keeping an eye on fare drops, redeeming reward points, and planning with a lot more intention.”

This demonstrates that the financial aspect is now considered even before the itinerary is prepared. It ensures clarity right from the beginning, reducing the risk of facing a financial crunch during or after the trip.

2. Budgeting means prioritising, not compromising

Pranav also noted that budgeting is neither restrictive nor about compromising or cutting down on experiences. Instead, travellers have simply become smarter about managing their budgets.

He added, “Younger travellers, especially, are comfortable using every tool available to stretch their budget. They compare prices, track deals, and know exactly where they want to spend and where they don't.” So, budget-conscious travel is more about prioritising the experiences you truly value instead of simply following a generic travel checklist.

3. Advance planning can reduce stress during the trips

Advance planning, with the budget worked out in detail, can also help reduce stress. When you have already factored in all major expenses and identified your priorities, you are less likely to feel anxious about your money during the trip.

Pranav observed that holidays can indeed feel more relaxing when travellers are not constantly calculating every expense. "Travellers who have planned ahead tend to enjoy the trip differently. Instead, they're choosing experiences they've already decided matter to them, whether that's signing up for a local activity, extending their stay by a day, or finally trying that restaurant they'd researched weeks earlier.”

4. Planning ahead can broaden travel choices

When you prepare financially, Pranav confirmed that your travel choices also broaden. You have more options! This means you compare different alternatives, destinations, peak travel periods, and how long you should keep your itinerary.

The travel expert also debunked a common misconception that budget-conscious means travelling less. No, now, travel is less haphazard and more driven by purpose, clarity, and confidence behind every decision.

Trips are strategically planned instead of being impulsive. (Picture credit: Unsplash)

Why Gen Z and millennials are investing in travel?

The younger generations take travel seriously, and they are investing in it. Ramneek Ghotra, chief growth officer of Finvasia, shared how Gen Z and millennials are investing, "Over the last few years, we have witnessed a significant shift in behaviour, particularly among millennials and Gen Z, who are adopting the same disciplined approach to travel planning as they do for investing and wealth creation.”

This means they are moving away from last-minute spending, credit card debt, or dipping into emergency funds, but rather, as per Ramneek, creating a dedicated travel budget.

How are they doing it? According to the finance expert, many are now creating dedicated travel budgets, setting aside monthly savings, and using financial planning tools to track expenses well in advance

Next, how exactly are they investing? The expert shared a detailed lowdown and shared an example for easy understanding: “Just as investors use SIPs to build long-term wealth, many individuals are allocating a fixed portion of their monthly income towards experiential goals such as domestic vacations, international trips, adventure tourism, or destination weddings. For instance, someone planning a ₹2 lakh international holiday a year later can comfortably save around ₹16,000-17,000 every month rather than bearing the entire cost at once.”

A wider picture, based on expert insights, suggests that travel is becoming more intentional and purposeful, with the main question shifting from 'Can I afford this trip today?' to ‘How can I plan this trip responsibly without disrupting my broader financial objectives?’

Note to readers: This article is for informational purposes only and not a substitute for professional advice. HT.com has not independently verified the claims and does not endorse them.