Experts suggest how a proper financial plan can prove to be a better option than investing in a big fat wedding, says Ayushi Sharma
Wow! What a grand wedding,’ everyone praised. No one saw the board ‘house for sale’ on their home. Indeed, Indians are totally obsessed with the idea of big fat weddings. Various shows and films have held up a mirror of these too. One can easily recall the recent examples Band Baaja Baaraat, Shaandaar, Veere Di Wedding and Made in Heaven. All of the above have had a fair share of instances, where a wedding planner, months before the D-day, starts to make endless arrangements with affluent decorations, manages the best of catering, exchanging of pricey gifts, wedding trousseau, and of course, the never-ending ceremonies and functions. But all this at what cost? Well, it’s beyond one can redeem. Some clients even put all their life’s savings and acquisitions.
However, financial planners suggest that more than making heavy expenditure on unnecessary arrangements and glitz and glam, it’s important to channelise the energy and funds in the right direction. And amid the current economic slowdown, it’s better to distribute the ‘grand amount’ in various chunks for future rather than investing a lumpsum for marriage at once.
Financial experts tell us that when you are married, you and your partner become a single economic unit. His/her fallout from a bad financial decision lands on your plate as well. So don’t let that all-important conversation about money get forgotten or postponed amid the excitement of your forthcoming wedding. It becomes quite evident with the above statement that more than depending on your wedding planner, couples need to start looking for a financial planner, especially during this period of recession.
Tanvi Goyal, founder of Wealth Aware, tells us that most parents in India spend approximately 1/5th of their total wealth accumulated over their lifetime (also called the jamapoonji) on their kids’ wedding, which is quite huge. “And if the couples are aligned towards the financial well-being of the family, creating a unified wealth management strategy with adequate communication about finances can work wonders in future. Money alignment can happen gradually over the course of time, with the security of family being in the forefront for both husband and wife. However, these days individuals have strong personalities and different view points and this can become a big black hole for a marriage if not addressed amicably with the help of a professional right in the initial years of a marriage,” she says.
Experts feel that just as each individual is unique, every couple has its own chemistry. There can be a great difference in the way a husband and a wife think and feel about money and that reflects in their pattern of spending, investing and saving habits.
With an economic slowdown, spending blindly on weddings needs to change for better. And the trends suggest that increasingly, working couples are realising that instead of looking for grandeur in their weddings, they need to hire a financial planner to create a successful life plan.
Also, trends indicate that the first wave of change came with the advent of GST. “Initially, the wedding industry was highly impacted by the changes in the budget of the country when GST was introduced. However, things have settled now. But with frequent changes in its rates, mostly reduction on various services such as catering and hotel bills, the decrease has allowed the couples to follow the same limited budget, which simultaneously provides them with many disparate options. The increased purchasing power also acts as an impetus for the economy. Overall, the reduction in the GST till date has witnessed a positive impact on wedding budgets,” says CA Anuj Kakkar, co-founder, Vriddhi Advisors.
Tanvi explains that couples go through the initial ‘newly married’ phase, where there may not be many liabilities, two streams of income and an aspiration-based lifestyle fuelled by credit card spending. ‘You Only Live Once’ (YOLO) becomes the motto for life and they save but not that frequently. It only becomes a once in a while event. At this phase, the most important advice is to map out the money mindset and understand and appreciate the differences.
The ‘parent’ phase follows. Here, the two might start feeling more responsible as well as interdependent and want to actively save and invest. The two important things to note during this phase are, “First, having a strong, unified family wealth strategy along with financial education at the same level for both husband and wife. Here the family goals can be clearly defined. For instance, higher education for children, their marriage etc,” she says. The next phase is ‘empty nester,’ when the kids have left home for higher education or work opportunities. “Now the couples no longer want to live a retired life. Instead, they may want to search for newer hobbies and discover their philanthropic side. Once again, the unity and readjustment of goals is important. They rediscover their personalities. And working with an experienced financial planner before marriage can help a couple voyage in this journey of life more smoothly,” believes Tanvi.
To sum it up well, experts suggest that a good financial plan for couples must include the following points — First, it’s important to keep a track of all their cash flows and expenditure. There are a number of apps nowadays which can help keep a track. Second, open and honest communication about money between the couple. Third, making sure that the asset creation and payment of liabilities are being done equally by both husband and wife. Fourth, sticking to your goals can be tough in a slowdown so automating saving and investing will bring in a discipline and also help you to stick to your budget. Lastly, have an abundant mindset with right execution of the plan. Remember, you can’t hit the ball if you aren’t playing. Similarly, you can’t achieve your goals if you aren’t well invested.