Every parent wants to make the wedding of their child one of the most memorable occasions of his / her life. Weddings are in fact considered to be synonyms with fun-filled, colorful and musical events. But along with all of this, another important thing attached to weddings is "expenses".

And in order to fulfill these desires, it is imperative that you follow the right approach towards planning for your finances. Having a practical approach to all wedding related expenditure is necessary and that will enable you and your family to live a stress free financial life.

Steps to Plan for Your Child Wedding

Step 1: Start Early

While planning for your child needs, it always pays to start early. This is because if you start saving and invest early, it will give you a larger time horizon to meet the goal and even build a bigger corpus. 

Remember the old adage, “Rome was not built in a day.”

Therefore, to accomplish the dream of getting your child married begin saving and investing early —perhaps when he/she is a toddler.

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

✔ Allows you to contribute smaller amounts regularly over longer periods

Step 2: Rationally Estimate Wedding Expenses

Do not be carried away by societal pressures or affluent friends or neighbours. Remember, each one personal finance is unique. There is also no need to ape others blindly; as each one financial circumstances/situations are different.

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

While estimating the wedding expenses, take into account the present value i.e. the amount you would have spent today on your child 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.

Step 3: Follow an Asset Allocation That Best Suits You

It is important to build a portfolio on the basis of your asset allocation. An ideal asset allocation is decided on the basis of various factors such as your age, income, risk appetite, risk tolerance, nearness to goal and so on.

A well-defined asset allocation is capable of dealing with different market conditions and helps you reach your goals in a systematic manner. Different asset classes have different attributes. Hence, a mix of all or some is important. 

For instance, equity is a must for your long-term goals. As the goal nears, you may rebalance your investment portfolio gradually towards fixed income or debt.

A well-planned asset allocation helps to act as a shield to protect the portfolio value during uncertain economic conditions and market volatility.

Step 4: Invest Smartly To Build the Corpus

Mere savings would not be enough. Hence, you should invest in mutual funds via Systematic Investment Plan (SIP).

With SIP you inculcate the habit of regular savings. You systematically invest in funds over a period of time and eventually a corpus of huge amount is built. Investing in equity mutual fund schemes may prove rewarding if time horizon for marriage is more than 5 years.

Step 5: Get Insured Optimally

As parents ensure that you are optimally insured for life. The demise of the breadwinner of the family causes a BIG setback to your dream of providing the best to your children.

Therefore, as parents, ensure that you are adequately insured.

Pure term life insurance plans may be considered to indemnify risk to life for the cost-to-benefit they offer.

Likewise, optimally insure for health, as not having an adequate medi-claim cover or not having one altogether, can potentially derail your financial goals if medical emergencies arise.