Budgeting For A Wedding? Here's A Year-Long Financial Plan

Weddings today often come with a hefty price tag, and without proper financial planning, costs can quickly spiral out of control. To avoid last-minute stress and the need to rely on loans for your special occasion, it's advisable to plan well in advance and systematically set aside funds for your big day.

From grand venues to designer outfits, a wedding can cost anywhere between Rs 5 lakh to over Rs 1 crore for city dwellers, depending on one's preferences and financial status. However, with a well-structured financial plan, you can manage these expenses smoothly—without having to compromise on your dream celebration.

If you have a short-term horizon, like one year, to plan for your special day, a few simple steps can help you build a sizeable fund with consistent monthly investments.

Here's a 12-month financial roadmap to help you plan your dream wedding without compromising your long-term financial stability.

The first step is decide an overall budget based on your current savings and how much you're willing to spend. Break down the major expenses such as venue, catering, clothes, jewellery, gifting and photography.

Consider opening a separate account for wedding-related expenses, and start allocating a portion of your monthly income to this fund.

Start visiting venues to compare costs, and meet photographers and decorators early on. Request detailed quotes with a breakdown of costs and potential add-ons to avoid last-minute financial stress.

Here are a few investment options to build your wedding fund:

Mutual funds that invest in debt and money market securities with comparatively short maturity of typically up to one year are known as short-term debt mutual funds. These are invested in corporate bonds, government securities and certificates of deposit. Debt funds generally offer average returns of up to 9-10% over a one-year period.  

You can deposit a lump sum amount with a bank for a fixed period, such as one year. You will earn interest, typically around 6% to 7.5%, depending on the bank.  

Recurring Deposits allow you to invest a small amount every month and earn interest at a pre-determined rate. Generally, RD schemes offer an average return of 6-7% over a one-year horizon.

Mutual Fund Systematic Investment Plans invest in high-return instruments like equities without getting exposed to market volatility. You can choose equity funds, multi-asset, or flexicap funds from a wide range of schemes, depending on your risk appetite. Though these schemes come with moderate to high risk, they generally offer average returns of 12-14% for a one-year duration.

To conclude, a little planning can go a long way in building a sizeable fund. There is no fixed roadmap for wealth accumulation. You can evaluate multiple options, depending on your risk appetite, financial situation, and the targeted corpus.