Looking To Build A Stress-Free Wedding Corpus? ⁠Here's How '50-30-20' Rule Can Help You

Weddings are joyous but costly affairs in India, with average budgets running into several lakhs. Early planning in a systematic manner is key to staying stress-free while preparing for your special day.

Financial experts often suggest following the 50-30-20 rule, a simple investment framework, which can also be applied to build a wedding corpus without straining household finances.

This rule recommends allocation of 50% of your income to needs, 30% to wants and 20% toward savings. This simple investment strategy allows a couple to celebrate their special day in style without spending sleepless nights over budgetary anxieties.

Not just a systematic investment plan to build your wedding corpus, this strategy will also help you avoid unnecessary expenses. There is no fixed formula and you can adjust the percentages as per your needs and financial conditions.

What is crucial to building your wedding corpus is regular savings, while curbing unnecessary spending. Let’s take a look at how to use the 50-30-20 rule to build your wedding corpus:

It is important to tailor your budget as per your lifestyle. The largest chunk of your earnings, around 50%, should be allocated to regular monthly expenses from rent, groceries, utility bills and transportation to other monthly outgoings.

According to experts, 30% of your monthly income should be utilised for lifestyle expenses. These are not unavoidable expenses, hence you can keep a check on this expenditure. Set aside a portion of your earnings for dining out, hobbies, entertainment and other related activities. However, experts advise reducing such expenses to save more, which can be invested in building your corpus.

At least 20% of your monthly earnings should be set aside for investments and debt repayments, as per the 50-30-20 rule. This amount helps you to build a financially secure future and a corpus fund for important occasions like marriage. Irrespective of the amount, consistency is the key to success here. Experts advise starting early and staying invested over a long-term horizon to build a sizeable corpus. Also, a portion of this amount should be used for loan repayments, especially high-interest debts like credit cards.

Here are a few simple ways to build a wedding corpus easily using the 50-30-20 rule.  

·      Prepare a budget and calculate the amount you need for your wedding. Accordingly, plan your investments depending on when you want to get married.

• Choose the instruments as per your investment tenure. For a short-term horizon, low-risk and secure investment instruments could be helpful in building your wedding corpus. Similarly, over a long-term horizon, you may explore risky assets, like equity mutual funds, which potentially offer higher returns.  

• Diversify your portfolio across different investment instruments like fixed deposits (FDs), mutual fund SIPs and gold, among others, to minimise risks.  

• Automating your savings could help in consistency while promoting disciplined savings.

• It is crucial to review and adjust your portfolio at regular intervals to assess the performance of assets. This will also help you in adjusting your expenses and save more to reach your target, if needed.

There is no fixed roadmap to build wealth. However, the 50-30-20 rule promotes financial discipline by encouraging consistent investment to create a corpus for significant life events.