There is little doubt that a family wedding is one of the biggest calendar events of the year. It’s likely to be remembered, treasured and talked about at family gatherings to come, but it can – and should – take years of careful planning.
The more you’re able to arrange in advance, the more you can relax on the day. And the earlier you start saving, the easier you should find it to meet the costs. Planning for a wedding can be a major undertaking and involve the whole family. Decisions need to be made on everything from the location and guest list to the choice of jewellery and honeymoon destination.
India with its lavish [=high cost] weddings is a good example. Economic Times recently reported that the average Non‑Resident Indian wedding in India costs Rs50 lakhs [Dh290,000 or over US$74,000 at today’s exchange rate].
Weddings are an expensive business and having to fund one from an annual income is unrealistic, even for very high earners.
In 2013, the wedding of the niece of steel tycoon Lakshmi Mittal cost an alleged $85 million.
While both families have a significant role to play, the most vital part of the wedding process should be done years in advance.
Start planning for your children’s weddings at birth and you can spread the cost over a number of years, benefiting from any growth in the market during that period
The Cost of Delay
Let’s assume that your daughter has just been born and the family wedding you have planned would cost $100,000. Assuming inflation at 3 per cent per year, this figure would rise to $180,611 by the time she is 20. In order to pay for her wedding, you would either need to invest a lump sum of $68,070 today, or save $5,202 every year, from now until her wedding day, assuming you paid annually, in advance, and invested in funds which achieved 5 per cent annual growth (after fund and product charges).
If you were to delay starting to save until your daughter is five years old, you would need to invest substantially more to fund her wedding.
Starting aged five, you would need to invest a lump sum of $86,877 to pay for her wedding – an increase of $18,807. Alternatively, you’d need to pay $7,971 every year – or an extra $2,769. The earlier you start saving for your children’s weddings, the simpler and more manageable your financial planning should be.
Please remember that investment involves risk. Fund prices may go up and down and you could get back less than you paid in.
Whether you have a lump sum to invest now or you are planning to save regularly over the medium to long term, financial planning solutions could help you meet the costs associated with a memorable family wedding.
If you have a lump sum to invest, you could consider investing in single premium bonds. By setting funds aside early and investing them wisely, you could generate a substantial sum towards the cost of a wedding. These bonds are flexible and allow you to top up, with additional payments in the future.
Or, you may decide to allocate a set amount on a regular basis, through a regular savings plans. You can pay on a monthly, quarterly, half-yearly or annual basis and have the flexibility to make one-off lump sum payments, for example, if you receive a bonus.
Combining a lump sum investment or regular savings plan with a separate life insurance plan could give you and your family additional financial security and peace of mind. Incorporating life cover, critical illness cover and/or total and permanent disability benefit into your financial plans would enable your children to enjoy their perfect wedding day, even if you weren’t around.
If you start saving now, you could give your children – or even your grandchildren – a truly memorable start to their married life, and save yourself a significant sum in the process.
This article has been supplied by Friends Provident International.