Last Updated: February 25, 2023, 12:54 IST
To calculate wedding costs, you need to take a closer look at the type of event you have in mind.
You do not need to worry about not having enough money to start investing in SIP because it starts from as little as Rs 500.
You might have heard your parents worrying about wedding expenses and the rising inflation. Parents continuously worry about saving and investing for their children’s weddings. But the majority of Indian parents don’t know how to strategically invest in different schemes to get good returns. When it comes to weddings, the earlier you start investing, the better. If you are also confused about how to choose the best investment option for the wedding, continue reading this article.
To calculate wedding costs, you need to take a closer look at the type of event you have in mind. Developing a financial plan for a wedding requires you to consider a few issues. How much money can you comfortably put aside for this? What percentage of the costs do you want to bear, and how much money can your folks afford to spend? You must map your responses to these inquiries with inflation as well. Every year, the cost of catering, the location, the décor, and other non-negotiables for bridal celebrations will rise, so your budget must reflect these escalating expenses.
The best method to do that is to invest in mutual funds through Systematic Investment Plans. Investment instruments with lock-in terms may be challenging because, unlike retirement, it is impossible to predict when you will get married. If you wind up getting married within the next three years, money invested in a five-year FD would be of little use.
Debt mutual funds, large-cap equity funds, or diversified funds with a predominant large cap element are better suited for this purpose given that the time horizon in this instance cannot be longer than 5-7 years. The danger in a large-cap equity mutual fund will be lower. High-rated debt mutual funds can offset the risks of the stock component and are more likely to produce more stable returns.
A better option than applying for wedding financing is investing in mutual funds. Think about this: a monthly SIP of 10,000 at a projected annual return rate of 15% will equal 8,96,817 in five years. You’ll need to borrow the same sum for five years at a 7.5% interest rate. You would have to pay 17,864 in monthly instalments and 10,71,841 in total to repay a loan for the same sum with a five-year term and a 7.5% interest rate.
It will be better for your overall financial health to start SIPs with modest amounts and increase your investments occasionally if you have extra money than to take out a loan. Furthermore, you do not need to worry about not having enough money to start spending because you can start a SIP with as little as 500.
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