Financial Planning For Your Child's Blockbuster Wedding

As wedding season returns, you may have received numerous invitations, attended weddings and observed the significant costs involved in hosting such events. Weddings are not just emotional milestones but major financial ones as well, and if you have children or plan to have children, preparing for their future wedding expenses is a critical financial goal.

Among the key financial goals to plan for—buying a home, a car, vacations, children's higher education, and your retirement—saving for your child's wedding is also a significant one that requires long-term planning and investment. Weddings often come with substantial costs that cannot be covered from regular monthly income. Hence, you need to start saving and investing specifically for this goal to ensure you are financially prepared.

Setting the financial goal

A financial goal is any large expenditure that cannot be managed from your current monthly income. Given the large sums typically required for weddings, it's essential to begin planning early—starting today.

Let's take a hypothetical example: You have a child who will likely get married in 15 years. If you estimate that the cost of the wedding in today's terms is 30 lakh, you must account for inflation when planning. Assuming an inflation rate of 7% annually, the cost of the wedding in 15 years could increase to around 83 lakh.

How much to save & invest?

To build a corpus of 83 lakh over the next 15 years, investing consistently and staying invested is essential. Assuming an annual return of 12% on a Systematic Investment Plan (SIP) in mutual funds, you would need to invest around 18,000 per month, to reach INR 83 lakhs in 15 years. This SIP should be exclusively for the wedding fund, while other financial goals—like retirement or your child’s education—will require separate SIP amounts earmarked. SIPs are best looked at as “Sapna in Progress”—a dream you're working towards with every monthly investment. By keeping your goals clear and your investments strategic, you can bring your aspirations, like your child's wedding, to life in a financially secure way.

It's important to remember that saving alone won't get you there. For long-term financial goals, only mutual funds, stocks, and gold should be considered. Other investment options may not beat inflation and grow your money optimally.

Planning Ahead

It's important to note that financial planning is not a one-size-fits-all process. Every family's goals, timeframes, and capacities differ. Consulting with a financial advisor is a must. Financial advisors come with necessary education, wisdom, experience and expertise to help you plan, invest and protect your wealth. They can help you calculate your specific needs, tailor your investment strategy, and adjust your plans as necessary to stay on track.

Start early, stay disciplined, and secure your financial future for all of life's major milestones—including your child's wedding.

(The author is a Chartered Accountant and CFA (USA). Financial Advisor.

Views personal. He could be reached on 9833133605. )