Your wedding day is one of the most important days of your life which marks the beginning of a new journey with your beloved. A wedding is more than just a ceremony. It is a celebration of love, trust, and commitment. But the cost of weddings can be a major concern for many couples and their families. The current average wedding cost in India is over Rs 10 lakhs. This figure can go even higher depending on the attire, venue, photography, and jewellery you choose.
However, gone are the days where parents would pay the entire bill. Many young Indians now realise that spending a huge portion of their parents’ savings and investments on a single day is not a wise idea. They are now more open to finance their wedding expenses, even if not fully but at least partially. A systematic investment plan (SIP) is one such option that can help young couples save and invest in a disciplined manner and finance their wedding costs. Here is how.
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Let’s breakdown a wedding cost and short term, long-term expenses
Expenses like venue, food, and decorations add up to a significant amount and range from Rs. 3 to 7 lakhs per day. In case you have a 2-day wedding celebration, you can expect to cost around Rs. 6 to 14 lakhs.
Then comes the cost of jewellery for the bride and the groom. This can amount to approximately Rs. 15 lakhs (considering current gold prices at Rs. 63,030 per 10 grams as of May 2023). You can consider investing in a gold ETF or focus on small-cap/mid-cap equity funds.
Expenses like photography and entertainment (like DJs, mehndi, or makeup artists) can go up to 5-6 lakhs.
In total, a wedding based on the above costs can amount up to Rs. 35 lakhs. Considering a 6% inflation rate over a 7-year investment period, your total expenses can increase to around Rs. 52 lakhs.
Here’s how an SIP can help you achieve the target amount for your wedding
- Total targeted amount: You aim to accumulate Rs. 52 lakhs for your wedding (including inflation).
- Investment horizon: Let’s assume a timeframe of 7 years to achieve your goal.
For long-term expenses like venue, food, and decorations. Start an SIP in equity mutual funds of Rs. 15000 per month with 12% interest rate. By the end of 7 years, you will gain around Rs. 20 lakhs.
For gold jewellery expenses, start an SIP of Rs. 14,000 per month in mutual funds schemes offering 12% interest rates. After 7 years, your total returns would be around Rs. 19 lakhs.
For short-term expenses like photography and entertainment, pick the top performing small cap mutual funds fund and start an SIP of Rs. 10000 per month. With 12% interest rates, these funds can help you build a corpus of approximately Rs. 13 lakhs.
You can also consult a financial advisor to help you identify the right mutual funds investment plans for your target amount. This way, you can create a more personalised strategy and achieve your goals in a planned manner.
To wrap up
By starting early, investing consistently, and increasing your SIP contributions annually, you can accumulate funds and finance your dream wedding. Whether it’s for long-term expenses, gold jewellery, or short-term needs, SIPs offer a disciplined and effective approach to investing so that you can make your D-day a truly memorable one.
Don’t forget to take professional guidance so that you stay on track and adjust investments as needed. Expert guidance helps you make the right financial moves and approach your wedding journey with more confidence.