Better Ways to Utilise Big-Fat Indian Wedding Day Savings

Were you dreaming of having a big fat wedding by inviting half the town?

But at the same time were you stressed about the financial commitments and the financial damage it could cause?

Thanks to 2020 and the lockdowns, we are finalising that good weddings can be done in private and life still goes on without a problem.

This has also made us realise – are big fat weddings necessary in the first place?

No need for horses and elephants. No need for over- priced dresses. And no need for diamonds and gold. No one cares.

What looked like a “must-have” until now has gone to “could have” to “ no need”.

In this article I’m going to talk about how you can make use of your wedding day savings and have a great wedding with financial responsibility.

The realisation that weddings are possible without a lakh fresh flowers, hundreds of meters of flowy drapes and red carpets, a gazillion varieties of dishes is absolutely relaxing! Isn’t is?

Relaxing for the couple, their family and for me to list down 😉 Oh wait, I forgot about 20 kilo lehenga worth a lakh and 100 other things!

Never mind.

Point is, chill! It’s the marriage that’s important and not the wedding day of deluding yourself looking like a prince and princess! 

Quick tip to get back to the daunting reality- “Wash off that cakey makeup and check your bank balance” Broke and broken?

This is a highly opinionated and logical article about how you can spend your wedding day savings meant for exhibitionist expenditure and gold pots in the right way. Grow love and grow rich! 

While the former is partially dependent on you and your spouse, the latter is a reasonably confident goal to achieve!

Hey, have you ever thought,  how did the wedding day’s pomp and show become so important?

Blame it on bollywood!

Unrealistic expectations about the wedding day, the neediness to secure every drop of attention on the social media by posting the ‘typical’ and fairytale couple poses in a pre-wedding photoshoot and the slow mo cheesy wedding movies, the burning desire to scure power of status by kilos of gold to please the nosy Indian aunt is what literally pushes people to take stupid decisions about spendings.                       

  GOLD, GOLD, GOLD! GO BABY!

But above all, I feel it is the ‘lack of awareness’ about financial freedom or ‘making money work for oneself’  and ‘overconfidence about uncertain future’ is the core reason for such unreasonable expenses.

“NOOO! You get married once and that’s why it should be king size” 

Well, why king size for just a day, instead choose a safe, consistent and balanced married life, an early retirement or multiple honeymoon vacays for years with your better half. 

Sounds  like a better plan, right? 

Honestly, most financial planning is nothing but the use of common sense. 

Since you and your partner are a team now, start with communication. Talk about your financial goals, retirement age and lifestyle, discuss spending habits and how differently each one of you define ‘wants’ and ‘needs’.

Surprisingly, most couples and marriage counsellors agree that the number one reason for fights in a married relationship is about money. 

Coming to the point- Where can all the wedding day savings be parked?

1. Contingency Fund and Rainy day fund– Begin financial planning with the smaller things. A portion of your savings can be put into a distinct fund for emergencies like sudden pay cut or loss of job or unavoidable household repairs. This one is called a contingency fund. For the major unforeseen expenses.

 Whereas Rainy day funds are usually smaller than a contingency fund. They can be saved for reasons like sudden pet care or to fit the broken door knob or as small as replacing your wrist watch batteries.

Number 2- Use common sense again! As a couple, become debt-free. Pay off the loans taken for buying your vehicles and save yourself from monthly EMIs and the interest thereon. I wouldn’t say pay off your education loan at once, as it helps you claim deduction on the interest on education loan under section 80E of the Income Tax Act,1961.

Also remember, a bad CIBIL score of your partner can affect your chances of obtaining a joint loan. Get rid of that debt, mate!

3. Savings account to SIP- Park the lump sum wedding day saving into a savings account and command a monthly ECS to your bank to move funds to a Systematic investment plan(SIP). 

In this way you’ll earn an interest of 4%-6% p.a (depending on your bank) on your savings and can also have the discipline to transfer equal and regular amounts into mutual funds, trading accounts or retirement accounts rewarding you for long term.

4. Insurance– ‘We don’t need it, because we are young hail and hearty’. 

Instead of making a wasteful expenditure of Rs 10,000 on a white horse that dropped you at your wedding hall in 30 mins, spend the same amount to buy a term or a permanent insurance to protect yourself and your beloved from the unforeseen disasters. Medical disasters or accidents. 

If you have a dependent spouse, then undoubtedly head to life insurance.

Carefully note your requirements, analyse the features of medical insurance and its cover ( Critical illness cover, Inpatient cover, maternity cover etc for a cover of Rs 5 Lakhs, Rs. 10 lakhs etc) and decide the premium as per your comfort.

Pro tip- Revisit all your bank accounts and insurances and update your nominee and beneficiary name after marriage. (If you trust your spouse, that is.) 😛

5. Gold– If you are a person obsessed like the rest of India about gold, buy it! 

But let this not be more than 20% of your portfolio. Gold helps in maintaining money during extreme market volatility and is a quick form of liquid cash. Do not buy it from the small shop at the corner! Precious metals can only fetch good resale value if they have attributes of quality and purity. 

But hey, for buying gold, I mean, buy gold coins and biscuits for a good resale value.

You can also go for Digital Gold if you don’t have an issue with a lock-in period of 5-8 years. Digital Gold or Sovereign Gold bonds issued by RBI are linked to the gold of 999 purity or 24 carats.

Now you know which one of these is good for your health 😛

6. With risks comes better returns. A universal principle. 

Hire a financial expert, qualified and trustworthy and let him assess on your behalf, for your family’s wealth creation and investments. Investments for your real estate, child education and retirement planning.

A good financial planner is worth it and definitely better than prolonging or delaying good financial decisions.  

The one logical advice of the elders from the Indian society that I believe we should all abide by is “Love is not enough”. 

Challenges can creep up even before saying ‘I do’ without financial compatibility. Every couple should learn early and openly about practical decisions, marital finance planning and have logical money discussions. 

Plan ‘money dates’– a date dedicated to review, handle and discuss money calmly. You owe each other a deep talk about your financial goals, practices and apprehensions. 

80% families in India borrow money from either relatives or unregistered lenders to attain the big fat Indian wedding dream. A day’s lavish spending on everything flowery and your expensive trousseau is what can leave you and your family with a financial baggage after you step down the altar and can hamper the future family relationship for a long time afterward. 

I’d suggest, save, budget, manage, invest, explore and have the financial freedom to move to cities before you plan a family. What better than a life spent in harmony with a loving partner and a stress free and healthier financial lifestyle.

 Plan well or pay later.