There are several investing possibilities to take into account, such as fixed deposits and bonds, which offer predictable returns and little risk and may be excellent for short-term aims. For long-term objectives, couples might also consider higher-risk choices with the potential for greater returns, such as stocks or mutual funds. So, choose the best investment plan based on your financial objectives, risk tolerance, and timetable.
Financial Planning Before Marriage: How to Start Saving for a Wedding?
4 Financial Investment Options to Choose Before Wedding
1. Equity Mutual Funds
Investing in equity mutual funds is a viable option for individuals looking for higher returns over a longer investment horizon. Here's what you can expect from this investment:
- Allocation: You can allocate 50% of your savings to equity mutual funds if your wedding is at least four to five years away.
- Fund Types: You can choose between aggressive hybrid funds or moderate-risk pure equity funds.
- Increased Exposure: If your wedding is further away, consider increasing your equity exposure to 60% to 70% and invest in mid-cap and more aggressive funds.
- Returns: Historically, equity investments have the potential to generate significant returns over the long term. However, the performance of equity mutual funds is subject to market fluctuations and risk.
2. Debt Mutual Funds
After allocating 50% of your savings to equity funds, you can invest the remaining amount in debt mutual funds. Here's what to expect from debt funds:
- Duration: Debt funds are suitable for both shorter and longer investment durations.
- Better Returns: Debt funds often offer better returns compared to traditional fixed deposits (FDs).
- Liquidity: Debt funds tend to be more liquid, allowing you to easily redeem your investment when needed.
- Tax Efficiency: Debt funds can offer tax advantages, such as indexation benefits, which can reduce the tax liability on your investment gains.
3. Gold ETF Bonds
Investing in gold ETF bonds can be another attractive option if you believe in the importance of gold in Indian weddings. Here's what you can expect from investing in Gold ETF bonds:
- Online Investment: Gold ETF bonds allow you to invest in precious metals online, eliminating the need for physical possession and associated risks.
- Safety: By investing in Gold ETF bonds, you safeguard your gold from thefts and other risks.
- Returns: Gold has historically been considered a store of value and a hedge against inflation. Investing in Gold ETF bonds can potentially yield returns over the long run.
4. Wedding Loans
For those with big dreams but limited time to save, wedding loans are an option to consider. Here's what you can expect from wedding loans:
- Availability: Various financial organisations and banks offer wedding loans, which are essentially personal loans designed to fund wedding expenses.
- Easy Installments: Wedding loans can be repaid in easy installments over a specified period.
- Interest Rates: Interest rates for wedding loans can start as low as 10.99%, but they may vary depending on your creditworthiness and the lender's policies.
- Financial Support: Wedding loans can provide the necessary funds to make your big day extra special, allowing you to manage expenses effectively.
Disclaimer: Note that these investment options carry their own risks and returns. It is advisable to consult with a financial advisor and carefully evaluate your financial goals, risk tolerance, and investment time frame before making any investment decisions.
5 Tips on Saving Money for Getting Married
1. Hire a Wedding PlannerConsider hiring a wedding planner, as they can help you stay within your budget while arranging a memorable event. They handle arrangements, schedules, and vendor negotiations to ensure smooth execution, allowing you to relax and enjoy your special day. A wedding planner can be cost-effective, providing a well-organised and budget-friendly wedding experience.
2. Minimise Your GuestlistCreate a budget-friendly guest list for your wedding by choosing who to invite. Consider limiting plus ones and trimming extended family and long-distance friends to save on food costs. Making thoughtful decisions about your guest list can help you stay within your budget while planning your special day.
3. Do Not Book Multiple VenuesAvoid renting expensive or multiple venues, and stick with one that fits your budget. Remember that a well-decorated venue of any size may perform well. Additionally, since Indian weddings are multi-day affairs. To save on paying for a second site, transportation, and other expenses, you could simply perform various rites and rituals in your own residence.
4. Go Off-SeasonYou can opt for an off-season wedding to save on costs. Winter weddings in India (November to January) can be expensive due to high demand. So, instead, consider a lovely spring or summer wedding at a beautiful location for a more budget-friendly option, as prices may be lower during non-peak seasons.
5. Decide Where You Want to Spend More MoneySetting priorities for your wedding costs will significantly help in budget reduction. For instance, the most significant expenses for an Indian wedding are food, decorations, bridal attire, jewellery, and photographs. Therefore, you could prioritise your costs to prepare a list of the items you wish to concentrate on and save on the rest.
Importance of Saving for Wedding
Indian weddings are elegant and lavish and naturally a costly affair. Therefore, if you are not financially prepared, it will affect your dream wedding and your long-term plans.
So, here are 7 points highlighting the importance of investing and saving for marriage, along with the advantages and long-term benefits:
1. Rising Costs of WeddingsWeddings in India include extravagant affairs and multiple ceremonies and events. The costs associated with weddings have been increasing significantly over the years, including expenses for venue, catering, decorations, jewellery, clothing, and other miscellaneous expenses. So, saving and investing can help you accumulate enough funds to meet these rising costs without falling into debt or financial stress.
2. Financial IndependenceSaving and investing let you be financially independent and self-sufficient. It allows you to make choices and decisions about your wedding without relying solely on family or borrowed funds. This financial independence can empower you to plan and execute your dream wedding without financial constraints.
3. Long-Term Financial PlanningBesides wedding funds, saving and investing are part of long-term financial planning. It instils a sense of financial discipline and responsibility, helping you develop good financial habits that can benefit you in the long run. It also encourages you to set financial goals and work towards achieving them, ensuring a secure and stable financial future.
4. Emergency Fundour savings can also serve as an emergency fund. Life is unpredictable, and unforeseen expenses or emergencies can arise anytime. Marriage brings a slew of unexpected costs you need to bear. A dedicated financial plan for your wedding can provide a financial cushion to handle unexpected situations such as medical emergencies or other unforeseen circumstances.
5. Avoiding DebtIf you fail to save enough money for your wedding, you might have to take out a loan to cover the costs. Taking on debt to pay for your wedding might put you under financial stress since you must repay the borrowed money plus interest. So, instead, you can prevent getting into debt and lessen your post-wedding financial stress by saving and investing in advance.
6. Investment GrowthSavings and investments allow you to see your money multiply over time. By investing in options such as fixed deposits, mutual funds, or other investment vehicles, you will be able to earn returns on your savings and potentially increase your wedding fund. This can provide a substantial financial boost and help you comfortably meet your wedding expenses.
7. Post-Wedding Financial Stability
A wedding savings plan and an investment plan not only help you fund your big day but also put you in a position for financial stability after your wedding. It helps you start your married life on a financially sound footing, with a buffer of savings and investments to fall back on. This can provide peace of mind and enable you to focus on other priorities in your married life.
Financial planning before marriage as a couple can be easier with effective money management, including investments and savings. You can take several actions to ensure you begin your married life on firm financial ground, from picking the appropriate investment vehicles to intelligently budgeting and avoiding debt.
Moreover, a strong financial partnership requires open communication and shared financial goals. So, create a personalised financial plan with the help of a financial expert to fit your needs and position you for a happy future together.
FAQs on Money Management Planning for Marriage
Setting a budget is an essential part of managing the finances for a wedding as it assists couples in planning and wisely allocating their finances. You may prioritise wedding costs, prevent overspending, and keep track of their spending by setting up a budget. Couples may make educated decisions regarding their wedding costs using a budget to uncover cost-effective solutions, bargain vendor contracts, and identify alternatives.
In general, taking on loans for a wedding is not a good idea. Your finances may be strained, and your long-term financial well-being may be impacted. So, instead of turning to credit cards or loans, it is critical to budget for and save for your wedding within your means. Beginning your married life in debt might make it difficult to meet your future financial objectives and add additional strain to your relationship.
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