HOW TO PLAN FOR WEDDING BY HELP OF MUTUAL FUNDS?

Does not matter if you are rich or poor, high class or middle class, weddings are a grand affair in India and require a bulk of your life time savings. It is commonly accepted truth that preparation and taking advance approach towards any foreseen event; keep us cool and calm and more confident at the time of the event.

Drawing and writing financial plan for any foreseen bulk expenses in life just like child education, child marriage, Housing, creating retirement corpus is done by most of the sensible person now a days, as this habit at one end  help us to control our unwanted expenses  and at other end it make us financially prepared too . 

How to begin?

It takes only few minutes to calculate how much fund will be required at that time, how much save monthly or early to get created that corpus etc.   

Start Investing!

A great place to start is with a Systematic Investment Plan (SIP) that allows you to save a certain amount of money on a regular basis. With SIP you can invest a fixed amount in mutual funds, on frequencies like weekly, monthly or quarterly thus encouraging regular savings and also offer the benefits of power of compounding. It is best to stay invested for a longer period of time to create wealth.

Secondly, when you have time on your side, you can invest in equity instruments. Equity instruments are risky and are only suitable for long time frames. However, they also offer superior returns to bank deposits or debt funds, allowing you to reach your goal with relatively smaller savings.

SIP in equity mutual funds is an easy way to adopt discipline in investing, reduce volatility associated with equities and get long-term capital returns.

Moreover, the dividends earned are tax free! Not just that, if you stay invested for more than a year, then the capital gains earned are also tax free!

It’s also a good idea to know approximately how much you need to save. You can arrive at this by looking at average wedding costs today and inflate this cost by the number of years you have before the intended wedding.

Where do you invest?    

As said earlier, equity is a great option if you have a longer timeframe. If the wedding is at least 4-5 years away, include about 40-50% of your savings into equity. The equity portion can be in the form of aggressive hybrid funds or moderate-risk pure equity funds (typically, funds that are oriented towards large-cap stocks). Invest the rest in debt funds such as corporate bond funds or short-duration or medium-duration funds. Remember that debt funds are better-returning, more liquid and more tax-efficient than bank fixed deposits.

If the planned wedding is much farther away – say you’re saving up for your child’s wedding well down the line – you can get more aggressive. Step up equity exposure to 60-70%, and start including mid-cap and more aggressive funds. 

If it’s a shorter timeline, then stick only to debt-oriented options and do not venture into equity.  If your timeframe is 1-2 years away, then a combination of liquid, ultra-short and low-duration funds work well. If you have a couple more years than this, then you can consider including fund categories such as conservative hybrid funds and equity savings funds in addition to pure debt funds. This can help you get a little better return. 

Gold is integral to any wedding. Therefore, if you have a few years before the wedding, you may want to accumulate gold gradually. Here, avoid going for gold savings schemes than jewelry shops typically run. Instead, invest in gold ETFs or gold mutual funds. These are a more effective, liquid, and low-cost way to benefit from gold price movements. You could make small investments in such funds/ETFs until the wedding, at which time you can liquidate the investment and buy the jewelry. 

INVESTMENT TIPS:

While saving for your wedding, start early

This will allow your money to grow over time and will allow you to gain from the power of compounding through market cycles.

Diversify to increase the stability of your wedding plans

Diversify your investments. This will help increase stability even in a volatile market and ensure that your wedding plans  are on  track.

Your dream wedding may be an expensive affair but you can make it possible. It just requires a bit of early planning, a bit of regular investment and lots of friends and family gathered around you to have a wonderful celebration. 

You can use GIIS Financial tools or Our Android App  for Investment, tracking and Asset allocation planning. 

*Mutual Fund Investments are subject to market risk, read all scheme related documents carefully.

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