When the children are small, planning for their marriage begins. To allow your money time to develop into a significant corpus, you must start saving and investing as soon as feasible. You must select an investment that provides a long-term return over inflation.
To accumulate the corpus at the time of the financial objective, invest in equities or fixed-income products according to your risk profile. The force of compounding, often known as return on investment, allows you to build a little investment into a considerable quantity of money over time.
The investment must be planned according to the time horizon and risk tolerance. If you’re a cautious investor, fixed-income instruments can provide a higher return than inflation over time. The adventurous investor might choose equity investments that offer enormous profits in exchange for a greater risk. To reach the financial aim of children’s marriage, you can engage in stock investments with a time horizon of at least five to seven years.
Child’s Marriage Planning Calculator
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The child’s marriage planning calculator is a handy tool for figuring out how much your child’s ideal wedding will cost. The wedding cost calculator for children will show you the cost of the wedding based on the child’s age at the time of marriage. You get an estimate of how much the child’s marriage will cost in the future. By investing when the child is small, you can build a corpus for the financial objective.
A formula box on the child’s marriage planning calculator allows you to enter the child’s current marital expenditures. You must also enter the predicted rate of inflation (imagine a rate of 5% to 6% per year), the child’s present age, and the child’s age upon marriage.
The child’s marriage planning calculator will show you how much the marriage will cost in the future at the time of the child’s wedding. You can fill in the number if you have already put money aside for your child’s wedding. You must also put in the projected investment return. The child’s marriage planning calculator will show you how much you need to invest each month to build up the necessary corpus for the child’s wedding.
How Does the Child’s Marriage Planning Calculator Work?
The accumulated corpus at the age of marriage is calculated using the notion of future value in the child’s marriage planning calculator. You may use the following formula:
FV = PV (1+R)^N
FV = Future Value
PV = Present Value
R = Rate of return on the investment
N = Duration or time-frame of the investment.
For example, the youngster is currently five years old. The marriage age is 18 years. Your current wedding costs are estimated to be Rs 10 lakh. Assume a 6% annual inflation rate. The future cost of marriage will be calculated using the following formula:
PV = 10 lakh
R = Inflation rate of 6%
N = Child’s age at marriage – present age of the child = (18-5) = 13 years.
FV = 10,00,000 (1+0.06)^13 = Rs 21,32,928.
If the current wedding cost is Rs 10 lakh, you will need Rs 21,32,928 for the child’s wedding.
Let us now compute the monthly investment necessary to cover the child’s marriage costs. You haven’t put any money down for your child’s wedding yet. Let’s assume that the projected return on investment is 8%.
In the Excel Calculator, use the PMT Function and input the rate = 8/100/12. (Translate into a monthly fee.)
The investment duration in months must be calculated as 13 * 12 = 156 months.
Pv = 0 and FV = Rs 21,32,928 (as calculated previously).
The child marriage calculator estimates the monthly investment for the kid’s marriage to be Rs 7,815.
Why Should You Make Marriage Plans for Your Child?
- Planning allows you to deal with the unexpected costs related with your child’s marriage.
- Inflationary pressures can be mitigated by making timely investments.
- You won’t have to touch your retirement savings or the funds set aside for your children’s schooling.
- Setting away a tiny amount each month to build a consistent corpus lessens financial stress.
FAQs
Que.1 What are the plans for the child’s wedding?
Ans. When the children are small, planning for their marriage begins. To allow your money time to develop into a significant corpus, you must start saving and investing as soon as feasible. You must select an investment that provides a long-term return over inflation.
Que.2 What is the formula to calculate Child’s marriage plan?
Ans. FV = PV (1+R)^N
FV = Future Value
PV = Present Value
R = Rate of return on the investment
N = Duration or time-frame of the investment.