Planning for your Child’s Marriage
By Akhil Chugh
Date September 4, 2022
It is said, “Marriages are made in heaven but celebrated on Earth.” It is the celebration of the formation of a new bond between two individuals and two families. Most parents wish to celebrate it lavishly. A grand wedding for children is the dream of every parent. However, with the rising living standards and increasing inflation rate, meeting the expenses of a marriage ceremony may turn challenging if you don’t pre-plan everything.
To gift your child a grand wedding, you must consider your child’s marriage as a financial goal and should start saving and investing systematically towards it from today itself.
Your financial planning for your child’s marriage should be based on 3 key factors i.e. the rising cost of weddings, the need to make a social statement and to ensure that your plan is fool proof enough to take care of your child’s security before and after her marriage.
In this article, lets understand some key steps involved in planning for mutual fund investments for child’s marriage.
Key Steps to Plan Your Child’s Marriage
1. Estimating the cost of the wedding:
To start any investment journey, the first step is to quantify all the financial goals to be achieved and their respective timelines.
While planning for a child’s marriage, one should consider that the nature of weddings has drastically changed in the last few years and that trend is likely to continue making it hard to correctly estimate the wedding expenses. You need to factor in normal inflation and you also need to factor in new trends. Nowadays, weddings have become elaborate affairs and they encompass a host of extravagant ceremonies before and after the wedding. Then there are the dresses and the gifts and they can amount to quite a bit. Add the cost of renting the hall, the catering costs and the jewellery and you may end up staring at a huge sum. So, if you are looking at an average wedding cost of around Rs.50 lakhs today then you would be looking at a bare minimum of Rs.2.1 crores in 25 years from now. Use our Child Marriage Calculator to estimate the future cost of the wedding.
Considering the marriage expense of approximately Rs 2.1 crores 25 years from now, we have worked out the monthly SIP of Rs 11,422 that you need to invest to achieve your goal as shown below:
2. Choosing the right mutual fund schemes:
Once the financial goal has been quantified, one should plan the roadmap to achieve it. So, while the destination for the investment journey is ready, it is time to prepare the vehicle to help undertake the investment journey.
Mutual funds are an excellent tool to help you achieve the goal of your children’s marriage investment plan. Before investing, however, you need to find out your risk appetite. Are you an aggressive investor, a moderate investor, or a conservative investor?
If you want to look at the right children’s marriage investment plan in line with your needs, get in touch with us right away.
3. Regular investments through SIP:
SIP is a process for a disciplined investment of a certain amount on a pre-decided date in a specific mutual fund scheme, regularly over a period of time. With SIP, the investment amount is deducted from the bank account periodically and invested in the chosen mutual funds on specified dates. The investments continue to be made across market movements, thereby also averaging the cost of investments over time and minimizing the effects of volatility on the investor’s portfolio.
Plan for the dream wedding of your child with a Systematic Investment Plan (SIP) in mutual funds and enjoy a stress-free wedding!
Contact us today to get started.
4. Reviewing the goal & rebalancing the portfolio periodically:
After setting a goal, one must review the performance against such goals periodically. Equally important is to review the goal itself, for the assumptions made while setting the financial goal may have changed.
Like inflation expectations may have changed over time. One should suitably adjust the financial goals as per the changed circumstances. Further, the performance must be reviewed periodically to identify underperforming schemes. This enables investors to replace such schemes with better-performing ones and achieve the financial goal effectively.
Net Brokers Takeaways:
- Net Brokers strongly suggest to start investing for your child’s marriage as early as possible to reap the advantages of the power of compounding.
- It is recommended to invest systematically into mutual funds via SIPs to beat market volatility and take advantage of rupee cost averaging.
- Always review and rebalance your portfolio depending on market conditions and your portfolio performance to achieve your desired target corpus,
- Seek professional help whenever required. Successful planning requires professional expertise to guide you to make an investment into suitable products as per your investment goals and risk appetite to help you reach your financial goals.
- Gold ornaments are never the most suitable investment for the children’s marriage. The prices of these ornaments can fluctuate with time. Combined with inflation, it can be difficult to recoup the investments made on gold ornaments. Mutual funds are an excellent tool to help you achieve the goal of your children’s marriage investment plan.
At Net Brokers, we have a team of experts capable of guiding clients through the most effective investment plans for children’s marriages. Based on the target corpus, suitable mutual funds in the market can be suggested, resulting in wealth creation over a period of time.
For more information, get in touch with us today! Download our mutual fund app & start investing for your long-term financial goals.
Happy investing.