Key Financial Considerations to Address Before Planning a Family Holiday

Jakarta (ANTARA) - Financial planner Aliyah Natasya has emphasised the importance of conducting a thorough evaluation of a family’s financial condition before deciding on and planning holidays during school breaks. The founder of DNA Finance Indonesia stated that holiday planning should be carried out by considering the family’s overall financial status.

“Holidaying is not a taboo topic in family financial planning; the issue is not the holiday itself, but the method used to fund it,” Aliyah told ANTARA on Friday. She advised families to assess their financial health before finalising any travel arrangements.

Assessing a family’s financial condition can be done by checking indicators such as the availability of emergency funds and the fulfilment of routine payment obligations. According to Aliyah, families should ensure that emergency funds, which should cover at least three to six months of household expenses, remain intact and are not diverted to other needs, including holiday costs.

“Emergency funds must remain 100 per cent intact. Before booking flights, ensure that emergency funds equivalent to at least three to six months of household expenses have not been touched,” she said.

Furthermore, she continued, families need to ensure that children’s educational costs, including re-registration fees and the purchase of uniforms and books, have been paid in full before allocating funds for recreation. “It is not about being almost paid off or partially paid; re-registration fees, new uniforms, and books for the next semester must be fully paid before the holiday budget is touched,” she added.

Aliyah suggested that families prepare holiday funds separately from the budget for routine household needs. According to her, financially healthy families generally prepare allocations for recreation well in advance. Funds for family recreation are typically accumulated gradually and placed in a dedicated account.

“If the source of holiday funds comes from online loans, ‘paylater’ instalments, or credit cards that cannot be settled within a single billing cycle, that is not a holiday. That is debt being celebrated,” Al렀ia remarked.

She also urged families to monitor their debt-to-income ratio. If monthly debt instalments exceed 35 per cent of income, the financial room for additional expenditure becomes increasingly limited. “If your total monthly instalments exceed one-third of your income, then a major holiday should be put on a waiting list, not a planning list,” said Aliyah.

To ensure that family recreation does not create a financial burden in the future, Aliyah stated that the decision to go on holiday should only be made after all essential costs, educational expenses, and family financial protections have been met.