Financial Planning for Children’s Marriage

Marriages are made in heaven, but how we celebrate this auspicious occasion of our child’s life shall depend upon how well we plan our finances to create a marriage fund. Start early and invest systematically in best mutual funds for child marriage to create a large fund for your future goal.

When do Parents Start Saving?
Most of the parents start saving for the future of their children immediately after their birth and some even start before that. This is good sign because the sooner you start the bigger will be the corpus.

Are You Saving Enough To Pay For Your Children’s Marriage?

Financial planning for children’s marriage is a major financial target that every parent needs to achieve. Although the exact age of marriage and expenses for marriage cannot be determined, however, planning and allocating funds for it is definitely one smart move, so better build a fund that will support your children’s marriage in future.

Start early – The Sooner your start the bigger corpus you get – To achieve the dream of getting your child married begin saving and investing early —perhaps when he/she is a very small.

Starting early has a variety of benefits:
✔Permits you to take a relatively higher risk and invest in equity mutual funds and benefit from potentially higher returns in the long run
✔Helps to benefit from the power of compounding; and
✔Allows you to contribute smaller amounts regularly and in disciplined way over longer periods

Rationally estimate wedding expenses – Don’t be carried away by societal pressures or affluent friends or neighbours. Remember, each one’s personal finances are unique. There’s also no need to follow others blindly, as each one’s financial circumstances/situations are different.

Therefore, focus on YOUR budget as there are other vital financial goals to fulfil as well like your child’s education and your own retirement, among a host of others.

While analyzing and estimating the wedding expenses, take into account the present value i.e. the amount you would have spent today on your child’s wedding on a rational basis. Extrapolate the future value considering inflation and the time horizon before the goal befalls.

Then work out the periodic monthly investments you need to save in mutual funds via systematic investment plans or SIPs. Keep in mind that the earlier you start this exercise, the lesser you would have to set aside and invest per month to accomplish this financial goal.

Avoid creating any debt – Adopt a practical approach to all wedding related expenditure. For instance, if the means are limited, consider choosing an affordable venue, compromise on décor, limit the guest list; among others.

The last thing you should do is use credit cards for any large wedding expenses or taking a personal loan. It’s best to avoid borrowing for a wedding.

Instead, only use those funds you have accumulated via financial planning for this goal of your child’s marriage.

Avoid utilising funds from other goals – If you’ve also assigned funds to meet other important goals such as child’s education and your retirement, avoid utilising them for your child’s marriage.

With the help of financial advisor – Plan and Invest smartly to build the corpus –Investing in equity mutual fund schemes may prove rewarding if time horizon for marriage is more than 5 years.

Follow an asset allocation approach – besides equity, you may include gold as an asset class to save for this goal. Also you may invest via gold mutual funds or ETFs or Gold Bonds rather than physical gold.