Weddings are an amalgamation of multiple realities, a celebration of at least a few days. It’s the coming together of two individuals, with their families’ and friends’ blessings for a strong union and a bright future. However, weddings come with their own price tags. Whether it’s a pandemic appropriate wedding that allows only 50 people, a more “typical” Indian wedding with 500+ people, or a larger than life Karan Johar-inspired one, wedding finances are a reality, whether you like it or not.
Bollywood has played its part in showing us weddings we may not have envisioned, yet may yearn for. 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!
As per a report published by KPMG, India’s current wedding market is estimated at USD $50 billion, with an annual growth rate of about 25 per cent per year.
Weddings can be expensive, so having a financial plan for them is key!
We’ve started seeing a number of young Indian women 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 large financial ones!
Breaking down wedding finances
On a high level, here is what we’re looking at in terms of budgeting wedding celebrations:
- Pre-wedding festivities
- Wedding festivities
- Post-wedding trip
Setting a financial goal for your wedding
In your 20s? It might seem too early to think about a wedding and the expenses associated with it, especially if you’re still single or not feeling like you’re with the right partner!
But the following five to seven years will just fly by, and you may not realise how your savings will take a hit — savings that can be used to build a corpus for your 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 on your life plan.
How do you plan out your wedding finances?
Let’s imagine that for a wedding today, you would need ₹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 per cent, we’re now talking about wedding expenses to the tune of ₹14.6 lakh. In order to maximise chances of hitting that number of nearly ₹15 lakh, you’ll have to start investing somewhere between ₹12,000 – ₹ 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 above example had a time period of six 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 small, incremental steps that don’t seem overwhelming as early as possible.
Let’s talk about bling!
What’s a wedding without some bling? For jewellery requirements, Indian women have changed their approach recently. With destination weddings and other elaborate setups, security has become a concern. Due to this, 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.
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: You would typically have at least a few months of a heads-up before the final wedding dates. Nine to 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 in gold funds, digital gold or gold ETFs can be converted into physical gold as appropriate at the time of requirement.
3. Wedding festivities: Follow the allocation path of point #1.
4. Post wedding trip: 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 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 with designer lehengas and the works. Either way, have a financial goal, and a savings and investing plan to work towards it, and you’ll be a happy, stress-free bride!
About the author: Dipika Jaikishan is the co-founder and COO of Basis, India’s financial services destination for women, powered by communities and financial education.