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The ultimate guide to plan investments for wedding fund

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In your 20s? It might seem too early to think about a wedding and expenses associated with it, especially if you’re still single or not feeling like you’re with the right partner!

The ultimate guide to plan investments for wedding fund
Weddings are the meeting of multiple realities. When two individuals come together, their families’ and friends’ in town with blessings for a strong union and a bright future.
Although the fact remains, weddings come with their own price tags. Whether it’s a pandemic appropriate wedding that allows only 50 people, a larger Indian wedding with 500+ people, or a larger than life Bollywood-isque one, each one requires the moolah!
The movies have played their part in showing us weddings we may not have originally imagined,yet may suddenly yearn for.
Well how do you build your ready reckoner for your wedding? First things first though: discuss what kind of wedding you want with your partner and work on a budget that you both are comfortable with. This is definitely easier said than done, but super critical! This ensures that you start with being on the same financial footing on this one!
As per a report published by KPMG, India’s current wedding market is estimated at $50 billion, with an annual growth rate of about 25% per year. The bottom line: weddings can be expensive, so having a financial plan for it is key!
We’ve started seeing a number of young folks who wish to self-fund their weddings, in addition to owning the entire vision - even though their parents can afford it. It’s part of the strong intent and desire to have control and autonomy over decisions, including these large financial ones!
Breaking down wedding expenses
Let’s define, what all you will need to account for while planning your wedding festivities:
1. Pre-wedding festivities.
2. All that jazz ! Jewelry
3. The actual Day!
4. Post wedding holiday
Setting a financial goal for your wedding
In your 20s? It might seem too early to think about a wedding and expenses associated with it, especially if you’re still single or not feeling like you’re with the right partner!
However, the next 5-7 years will fly by, and you may not realise how your savings will take a hit. Your current savings that can be used to build a corpus for your future wedding goal. The bottom line is to start thinking about this wedding financial goal as early as possible, especially if a wedding is something that’s in your life plan.
How do you plan out this financial goal? Let’s imagine for a wedding today, you’d need Rs 10 lakh to contribute towards wedding expenses. Now, let’s assume your wedding ends up being in 2027. At an inflation rate of 6.5 percent, we’re now talking about the wedding expenses to be Rs 14.6 lakhs six years from now. In order to maximise chances of hitting that number of nearly Rs 15 lakh, you’ll have to start investing somewhere between Rs 12,000 - Rs 14,000 every month in a combination of mutual funds. The Basis app has an easy goal planning tool that will help you calculate these numbers (including factoring in inflation) in a jiffy!
Since the example had a time period of 6 years to plan for that wedding goal, it meant you could possibly take a slightly higher risk with your investments. If that time frame is shorter, you might need to work with higher monthly savings and lower risk investments to maximise chances of hitting that dream wedding corpus!
The fundamental premise here is that you should aim to get to your goal amount with simple small, incremental steps that don’t seem overwhelming - as early as possible.
All that jazz!
What’s a wedding without some bling? For the jewellery requirements, people have changed approaches recently. With destination weddings and other elaborate and crowded affairs, safety has become a concern.Hence, women are choosing to wear close-to-real jewellery. However, they may prefer to have gold more from an asset standpoint as they are embarking on this new life chapter.
Building that gold in the form of physical gold is not practical anymore. There are multiple alternatives now - ranging from gold ETFs, to gold mutual funds and even digital gold. These track the gold market, and come without the risks of security, storage and quality checks that physical gold comes with.
Things to do when the wedding date is getting close…
Once you have worked towards your goal and built the corpus, let’s see how to utilise it:
1. Pre-wedding festivities and that singles trip: You’d typically have at least a few months of a heads-up before the final wedding dates. 9-12 months before the festivities begin, move your money from the high growth investments to mostly safe investments. Based on when you will need it, you can park it in a combination of 3-6-9 month FDs or liquid funds.
2. Jewellery: The investment you accumulated into gold funds, digital gold or gold ETFs can be converted into physical gold as appropriate at the time of requirement.
3. Wedding festivities: You’d typically have at least a few months of a heads-up before the final wedding dates. 3-6 months before the festivities begin, move your money from the high growth investments to mostly safe investments. Based on when you will need it, you can park it in a combination of 3-6-9 month FDs or liquid funds.
4. Did someone say vacay!: Don’t forget the much-needed post-wedding craziness bonding time with your partner! When weddings become costly affairs, people often compromise on this part. Understand what’s important to the both of you, and allocate some funds for this part of the celebration!
You may wish for a small wedding with a lavish post-wedding trip. Or you may want that Bollywood style wedding. Either way, have a financial goal - and a savings and investing plan to work towards it, and you’ll be a happy, stress-free person.
The author, Dipika Jaikishan, is Cofounder and COO at Basis. The views expressed are personal
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