A monthly savings plan for your child's lavish wedding

Weddings are one of the most elaborate family gatherings in India and you want to complete everything. While parents are delighted for their child to go on a grand journey, they secretly worry about the expenses of a wedding fit for their prince/princess. According to statistics, over 20% of loan applications received from young Indians were to support wedding expenses ⁽²⁾.
Although extravagant, experts feel that organizing your child's wedding is one of the most accessible goals and 100% attainable if you do two things correctly: plan and manage your funds wisely and begin your investment as soon as practical.

The expense of a wedding may vary enormously depending on how big or modest you want to go. A usual wedding budget includes fees for the celebrant, wedding cake and dessert, wedding and engagement rings, stationery, bride and groom`s outfit, hiring a band, catering, and flowers ⁽⁴⁾.

Therefore, you must start creating a baseline for each portion of the wedding:

• Food and Beverages:
  We all agree that one of the most significant components of a wedding is food and drinks. You will want your wedding guests to have access to high-quality alcohol and a diverse food selection.


• Entertainment:
  A live band will be the most expensive, and the cost can quickly escalate, whereas a DJ may be significantly cheaper. Evaluate what you want to book for your child's special evening.


• Allocate a portion to the destination:
  The cost can vary significantly depending on the venue. Whether there is the inclusion of a meal in the price per person, so it might be best if you choose a predetermined sum.


• All other items will receive the remaining portion of the budget. This bucket may involve more than the first three combined, based on your child's preferences.

Having more time to plan and save for your wedding is best. As a result, you must follow the following procedures to get one's wedding savings plan on track.

• Make a wedding budget:
  A budget will only benefit you if it is reasonable and achievable. Big-ticket items like the ring, caterer, and clothing are easy as they are visible. Still, small extras like decorations, wedding favours, and props may drastically boost costs. As a result, parents must first sit down and contemplate their vision for their child's wedding.


• Priorities establishment:
  As you tally up the prices, you may need to prioritise. Make a note of everything you wish to purchase, even if it seems insignificant. Now go back over the list and remove the must-haves from the items you can do without jeopardising your wedding preparations.


• Divide the budget into target savings goals:
  The next stage is calculating how much you must save each month or each week to reach your goal once you have determined your overall budget. A reasonable budget procedure is as follows: Total wedding budget = several months till wedding x actual monthly savings + contributions and current savings.
  
  For example, if your child is five years old, you may have another 20 years before she considers marriage—this time, you need to devote your savings to accumulate the necessary funds for this goal. If your current budget is Rs. 20 lakhs, you will need approximately Rs. 54 lakhs in 20 years to meet the same standards. When it comes to your current savings for the goal, you can either. Leave them alone or consider moving them to the new investment plan.
  
  The Marriage calculator assists you in creating an inflation-adjusted investment plan, which is a more suitable method of investing because the impact of inflation chips away at the savings you intend to use for your child's wedding. ⁽⁵⁾


• Save your wedding savings in the right place:
  Determine where you'll store your wedding account before you start contributing to it on a regular schedule. The three main possibilities are a traditional bank account, a savings account, or a money market account.

You have several investment options such as ULIPs, PPF, Mutual Funds, NPS, FD and RBI Bonds when you have 15 to 20 years to save for your financial objective. Although if you have a high-risk appetite for funding, you only want the safest means to achieve your goal.

You would like the investment to:

• Work without your regular participation


• Protect the growth of your investment.


• Protect your child's goal and optimise tax* efficiency.

As a result, once you've determined your budget, begin putting money into an investing account and putting it to work. To get the most out of compounding and get guaranteed# benefit, set aside a monthly amount.

It's also crucial to remember to keep these funds apart from your investment holdings. The funds allocated for your child's wedding, while they can be in the same account, should be recognised differently for such savings to be applied as desired.

You can opt for a unit-linked insurance plan wherein you have the option of investing any of the funds and plans offered by the insurer and systematically moving out of equity into debt as the day of the wedding approaches. This is done to reduce the overall risk of the portfolio and lower the dependence on the market.

Unit-linked insurance plans offer insurance as well as an investment opportunity and excellent tax advantages*, which are unparalleled.

• The premium paid towards a unit-linked insurance plan is tax-free under section 80C upto Rs 1.5 lakhs per annum.


• The maturity benefit for ULIPs with annualised premiums less than Rs 2.5 lakhs is tax-free under section 10(10D) provided the sum assured is at least 10 times the annual premium. However, for ULIPs with annual premiums of more than Rs 2.5 lakhs, a year would fall into the category of equity taxation, wherein capital gains tax norms would be applicable.


• The switches from one fund to another within the ULIP are tax-free and do not have any capital gains tax implications.

Here are the top ULIPs for you to choose from:

• ABSLI Wealth Aspire Plan (UIN:109L100V05), which has 2 plans and 4 investment options along with guaranteed additions and an additional top-up facility.


• ABSLI Wealth Assure Plus (UIN: 109L120V02)has 5 investment strategies in 16 funds, guaranteed additions and premium waiver benefits, critical illness, and total permanent disability riders.


• ABSLI Wealth Secure Plan (UIN: 109L074V05)has 3 investment options, whole-life coverage, and guaranteed additions.


• ABSLI Fortune Elite Plan (UIN: 109L090V04)offers flexibility and guaranteed additions.


• ABSLI Wealth Infinia (UIN: 109L129V01)has 5 investment strategies in 16 funds along with loyalty additions.


• ABSLI Wealth Max Plan (UIN: 109L073V05),which is a single premium ULIP with 16 funds - Self-managed options and guaranteed additions.

While still being married is a joyous experience. It is the marriage that's going to last, not the wedding day. It's more important to start your new life together financially stable than to have a specific number of guests or decoration plans.

As a result, properly organising your budget and striving to save for your child's wedding, so you don't wind up in debt can contribute to your child's happily-ever-after marriage.