Children's Marriage Fund - India

Cost of Children's Marriage Fund - India

1. Cost Estimation for the Children's Marriage NOW.

In India, its a good culture that the parents try to reduce the burden of the children by funding the marriage expenses.

In my family culture, we have the habit of dividing the costs equally between both families. Expense per family (Engagement + Marriage) : 1,50,000
Cost of dress per family : 50,000

Total costs (Without Jewels) : 2,00,000


2. The costs of Funding the Children's Marriage in FUTURE.

Lets assume the number of years needed to fund the Child's Marriage: 15 years. 

The cost of inflation is 10 to 15%. As usual, I am keeping it on the higher end 15% so I don't end up in trouble. 

Years : 15 
Inflation : 15.
Amount needed after 15 years : 200000*(1+15/100)^15 (Compound Interest formula : P[1+R/100)^N])

Amount needed : 28,46,354.33

3. The savings required per month.

I am not going to talk about Equity or MF. I am simply concentrating on Recurring deposit at the rate of 8% for 15 years.

We can use a simple formula in MSExcel: PMT(Rate,Num of Years,PV,FV,type)
Rate = 8%
Num of Years = 15
PV = 0 (Initial amount)
FV = 64,56,758.40
Type - Not Required

SIP Monthly = 8,225.55. [PMT(8%/12,15*12,0,6456758) ]

Tax on Interest yielded is not taken into account. 

Next, We could plan for Retirement Fund.
http://healthywealthyhomemaker.blogspot.in/2013/01/how-to-plan-for-retirement-fund.html

Child Education : http://healthywealthyhomemaker.blogspot.in/2012/12/how-to-fund-your-childs-education.html