Has it ever happened to you, that you wish to gift someone something exclusive but held yourself back because it is a little expensive & you can’t afford it immediately.
Hear from Shraddha -26 years old working at major Consulting Firm in Hyderabad (name changed.)
“I wanted to gift my parents a European vacation ever since I started earning, but I could never save that amount in one go. I had my monthly fixed expenses & some other unplanned expenses coming up every now and then. Finally, after 1 year of enough trial & error methods, I decided to do it anyway but in a different way.
As soon as I got my bonus, I booked the return tickets (because travel was a major chunk of the entire travel budget). Next I started investing in a Liquid Mutual Funds, as suggested by Finmitra. At the end of each month I made the booking for rest of the trip- accommodation, intercity transfer. When it was time to book most expensive part of the trip – a stay in the costliest city of world – Zurich in Switzerland, I waited for 3 months till that fund had accumulated a larger balance.
Within 9 months, all my bookings were done & now they are going to fly in another 2 months.
What did I learn?
Wishes remain dreams until you plan and take a realistic step.
It was difficult to achieve my desire, and had I waited for the day when the gift becomes affordable in one go, it would have been impossible.
Also, having a liquid mutual fund account was helpful. It gave me the ease of keeping money separate & ease of withdrawing as & when required. Further, it did not affect my monthly fixed expenses. Also, I got an interest rate higher than my savings account.”
So, if you want to gift that something special, how should you go about it?
- How much amount should I set aside?
Calculate it like this-. Cost of the gift / number of months for giving the gift.; every month set aside this amount from your income. You can set aside a higher amount too. By doing that, you can simply achieve your goal faster. However, make sure you do not end up investing a very large amount every month which will make it difficult for you to meet your fixed monthly expenses. So set a comfortable savings target every month, and systematically go ahead.
- When should I start?
Only you can answer it best. You should start investing atleast 3 months before the gifting occasion & if it’s a very expensive gift, then it may even take you 1-2 years of saving & planning. Though 1-2 years may seem very far away, time flies and before you know it, you would have gifted your loved ones, something super special!
- Where should I invest?
If you have a financial planner, discuss your goal. A good financial planner will help you invest the money in a short term liquid fund, which is easy to redeem as & when you need it. If you are a do-it-yourself investor then, then look for funds where there is no exit load at all or no exit load after 3 months. For a short-term gifting option, please avoid investing in equity mutual funds and invest only in debt mutual funds.
When you don’t have ready money, buying a gift, may look like a difficult task. Yet, it is achievable. If you plan in advance and start dedicating some funds towards it , the task gets easier & realistic. Just like what Shraddha mentioned your dreams will remain mere wishes, if you don’t take that first realistic step. Start planning & investing –to gift your someone special something special.