Smart Saving and Investing Tips for Your Dream Wedding

Who doesn’t love weddings? The food, dance, togetherness, and general happy vibes. But all seems fun when you’re attending a wedding instead of hosting it. Indian weddings are known for luxury, and there seems to be no ceiling to the potential expenditure. Weddings then are not just about celebration but a large financial commitment, too.

But worry not. This article guides young Indian couples and their families on saving and investing to get their dream wedding.

How much does a wedding in India cost?

The Indian wedding industry was estimated to be worth approximately Rs. 5 lakh crore. It involves a wide range of costs. Location and type of venue contribute significantly to the cost. For example, destination weddings are expensive to plan. Food undeniably takes precedence over everything else and leaves a lasting impression on the guests. You may choose from a sumptuous spread with or without alcohol or opt for an economical option. Decor and entertainment contribute to a wow factor in the wedding.

Attire is the fastest-rising expense, with clothes and gold getting expensive. A bride may also need to budget for her trousseau. Photographers, guest accommodations, wedding favours and transportation are the miscellaneous costs. The expense of an Indian wedding can vary from a modest amount to a substantially larger figure. By establishing a comprehensive plan well in advance; couples can navigate the intricacies of wedding expenses with confidence and prudence.

How to make your dream wedding come true?

Traditional Methods

Traditionally, Indian families have relied on methods like

• Setting aside savings from the child’s birth: They may establish a dedicated savings account or investment fund specifically earmarked for this purpose. Over the years, these savings grow, ensuring a substantial financial cushion available when the child reaches marriageable age.
• Monthly/ yearly investment in gold: Many families consider investing in gold to build wealth for their children's wedding. They may buy gold jewellery, coins, or bars. This is either gifted during the wedding, used to make jewellery, or sold to get cash for wedding expenses.
• Government schemes: Schemes like the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana offer attractive interest rates and tax benefits, making them popular choices for long-term financial planning. These government-backed schemes provide a structured way to accumulate funds over time.
• Loans: Many families take personal loans to finance the wedding expenses. This is not a healthy practice, especially if done just to maintain a social status.

Modern Methods

While the old methods remain relevant, modern financial tools have emerged as efficient options for building a wedding fund.

• Wedding insurance: This innovative financial tool can help safeguard against unforeseen circumstances that may impact the wedding. It provides financial protection during unexpected cancellations, adverse weather conditions, vendor mishaps, or other emergencies.
• Mutual funds: Mutual funds have gained prominence as an efficient and effective investment tool providing means to save for major life events, including weddings. Mutual funds provide an opportunity to earn returns on investments and offer the flexibility to withdraw funds when needed, making them a popular choice.
• Active Schemes: With options like various categories under equity schemes of mutual funds, investors can enjoy the benefit of diversification and potential returns from professional management.
• Passive Schemes : In recent times, there has been a notable shift among Indian investors towards passive investment vehicles such as ETFs (Exchange-Traded Funds) and Index Funds. These funds are designed with an aim to mirror the performance of underlying market indices, offering a straightforward and cost-effective investment solution. They are particularly advantageous for couples seeking to grow their wedding savings in a manageable and uncomplicated manner.
   

How to use Mutual Funds for Wedding Savings

Mutual funds can be very effective investment vehicle to enhance saving for your dream wedding. For couples aiming to plan their destination wedding, mutual funds are a good solution for goal-oriented investment strategy. Couples can opt for mutual funds that align with their risk tolerance and investment horizon and benefit from capital appreciation. Similarly, systematic and disciplined investments in mutual funds can be a rewarding option for parents looking to plan for their children's future and provide for their potential wedding expenses.

Different Mutual Fund products work for different situations:

• A 22-year-old with a newly initiated career and planning to get married by 30 might opt for Balance advantage fund to capitalize on its diversified portfolio for potential returns. This allows them to benefit from the power of compounding and the ability to withstand market fluctuations.
• A couple with a wedding corpus, preparing for their wedding in six months would be better served by investing in liquid or arbitrage funds.
• For parents aiming to build a wedding fund for their children within the long term, opting for various categories under equity schemes of mutual funds can be a reasonable choice.

Strategies for smart wedding planning

To pre-emptively manage financial stress during the wedding planning process, it's essential to strategize and plan.

• Begin by creating a comprehensive budget that factors all foreseeable expenses and provides a buffer for flexibility to accommodate unexpected costs.
• Establish a payment schedule with each vendor and ensure sufficient liquidity on designated payment days.
• Regularly revisit your budget and expenditure and eliminate any unnecessary or extravagant costs.

Mutual funds can be your wedding planning partner to help you achieve your wedding goal. They can be customized to align with one's financial capabilities and objectives.

Advantage of investing in mutual fund for your dream wedding:

• Power of compounding

Mutual funds benefit from the power of compounding, providing an added financial advantage. Compounding refers to reinvesting earnings to generate more, creating a snowball effect of wealth accumulation over time. It is also useful for long-term financial growth beyond the wedding.

• Combine short-term and long-term benefit

To balance between fulfilling immediate wedding needs and secure long-term financial stability, it is imperative to consider investment options that blend short-term and long-term benefits. Opting for debt funds can provide the security for short-term financial goals, aiming to provide stable returns over a predetermined period. Simultaneously, exploring equity mutual funds, known for their potential to generate substantial long-term returns, can foster the necessary financial security for your future together.

Equity-linked savings schemes (ELSS) offer the dual benefits of tax savings and potential wealth appreciation. These schemes provide short-term tax benefits and long-term wealth accumulation.

Conclusion

In preparing for a dream wedding, some key principles can be a secret sauce to a solid financial plan. Starting early and setting a practical budget are like laying the groundwork for a sturdy house - they provide the structure you need to build your savings effectively. Consistency is key, much like watering a plant daily; regular savings efforts can make a significant difference over time.

However, it's equally vital to steer clear of loans. It is like avoiding a traffic jam; dodging unnecessary loans can keep your financial journey smooth and stress-free. By sticking to these simple yet powerful rules, you can avoid financial hiccups and ensure that your wedding planning sails smoothly without any unnecessary turbulence.

Financial planning is like a well-rehearsed dance; it requires coordination, discipline, and flexibility. By embracing these easy-to-follow steps, you can waltz your way into your dream wedding without any financial jitters. So, start early, set that budget in stone, stay consistent with your savings, and avoid the debt trap at all costs. With this financial rhythm, you can create a beautiful melody of financial stability and joy as you begin your new journey together.

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