The rising cost of weddings is one of the most significant financial challenges that modern parents confront.
In India, a marriage is seen as a life-altering experience and one of the most important choices an individual or family can make. When two people get married, they often separate their finances and spend their savings brazenly. But how much of a savings do we need to start planning a wedding? You can't just choose a number, like Rs 50 lakh, or aim for Rs 1 crore or whatever it takes to pay for your kid's wedding. How much you can invest on a monthly basis, in turn, determines how much you can afford to invest overall. Another important issue is how to estimate how much money is needed for a certain marriage.
Your child's wedding budget will be affected by a number of variables, the vast majority of which are intimately connected to your own life and financial choices. So, let's learn the methodical approach to calculation.
How many children
A single kid means a single wedding to plan. If you have two kids, you'll need to put away twice as much money for their education and your own, as they'll each be using the same amount of resources. All of your kids should be on your thoughts at all times.
Estimated wedding costs at present
You should estimate the overall cost of your wedding based on what you can afford, what you need, and what is appropriate. Catering costs, guest home rent, décor, jewellery, presents, etc., are all fair game.
Current expense value in the future
Determine the future worth of your present projected budget for the wedding based on the inflation rate in India based on historical data. The formula is below, or you may use a variety of internet calculators to get the value.
FV = PV (1+R)^N
Where,
FV = Future Value
PV = Present Value
R = Rate of return on the investment
N = Duration or time-frame of the investment
Also, READ: How is e-Rupi different from UPI? Here are 5 key differences
SIP
The ideal way to reach your financial objective would be to have a well-thought-out and diversified portfolio. Depending on your comfort level with uncertainty, you may want to consider a systematic investing plan, or SIP. The sum you already have set up for your kid's wedding is where the computation starts. Let's say you've followed the preceding advice and are now sitting on Rs. 25 lakh, with Rs. 5 lakh set aside for your child's wedding.
You're preparing for your kid's wedding when he or she is 23 years old, and right now he or she is 7. You have 16 years to save up 20 thousand rupees. The minimum amount to start a systematic investment plan (SIP) is 10,500 per month.
When the market is showing signs of being optimistic, investors have a better chance of reaching their goals sooner than planned. You can do the job faster if you have a well-diversified portfolio and evaluate it often.
To successfully rebalance your portfolio on a regular basis, you need a thorough financial strategy that specifies your target amount and desired rate of return. Every six months is a good time to take a look at how your investment is doing.
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