A country-wide study of India’s aspirations throws up several interesting findings. The 2019 Aspiration Index survey set out to determine which aspirations and life goals are most important to Indians. We recognise six pillars of aspiration: Health, Wealth, Fame, Image, Relationships, and Personal Growth. We assigned 25 different life goals to these six pillars. For example, buying a home is a wealth goal, exercising regularly is a health goal, and becoming a domain expert is a fame goal. The respondents told us through the survey that their No. 1 goal is buying a home, with a score of 92.1 on the Aspiration Index. Saving and investing for children’s education is No. 2, with a score of 92.0. But the goal that’s least important to Indians, with a score of 76.2, is spending on one's own lavish wedding.
CHANGING TRENDS
The big fat Indian wedding may have run its course. Trends show a preference for compact weddings with smaller guest lists, fewer rituals, and lower expenses. This may seem counterintuitive to anyone who’s seen couples these days splurge lakhs just on Instagram-worthy photoshoots. But most millennials today would rather use their hard-earned money towards more pressing goals such as buying a home. Another study done some years ago pointed out that Indian families spend 20 per cent of their life savings on their children’s weddings. Millennials no longer want to impose these high costs on their parents, nor do they wish to bear them themselves. There are plenty of better things they can achieve with that money. So let's take a look at them.
BUY A HOME
The No. 1 life goal of the survey respondents was to buy a home. Consider the typical Indian wedding whose costs easily run up to Rs 10-20 lakh per family. Families do save heavily to get their children married. However, wouldn’t the children be better served if this money was used as a down payment on a new home for them? In metros, the costs of home ownership are steep, especially considering the associated costs of GST, registration, stamp duty, loan interest, furnishing, and brokerage. Therefore, saving up to buy a home instead of blowing up your life savings on a one-day extravaganza seems prudent to many. And that’s exactly what the respondents thought, too.
LET FAMILY ASSETS APPRECIATE
Families often liquidate investments to finance their child’s marriage. The liquidation may be planned or unplanned. For example, a family may buy a plot to fund their daughter’s marriage in the future. But unplanned liquidations can hurt a family’s wealth growth. For example, if your father were to liquidate his PPF for your wedding, he may be cutting back on his retirement savings and putting himself at financial risk. Therefore, a compact wedding allows the family’s assets to continue to appreciate, lowers the need to borrow, and adds to the family’s financial stability.
RETIRE EARLY
The survey also reveals that the vast majority of respondents don’t want to work till their 60s. Given the option, they’ll exit the work force by their 50s. As per the study, the average age at which respondents start saving is 29. The average age they start saving for retirement is 34. And the average age they want to retire at is 56. Using the money they will save by having a budget wedding, millennials can accelerate their retirement plans. Money invested in your 20s would grow steadily for the first decade, but through the second and third decades, it would experience explosive, compounded growth which will help tremendously in retiring early.
COMPLETE YOUR OWN EDUCATION
Often, getting married puts an end to one’s formal education. The high costs of higher education don’t make it easy to get back to the classroom. However, the availability of funds can ease that process. As per the Aspiration Index, the fourth biggest goal of Indians is to be considered an expert in their field. This goal can be struck with the continuance of education even after marriage, which can be facilitated by a low-cost wedding.
SEE THE WORLD
India’s second biggest wealth aspiration is to travel around the globe and create memories and experience. Instead of self-funding a lavish wedding, why not use your savings to see the world? You are not going to get too many opportunities to go to your dream destinations. It wouldn’t be prudent to blow the whole fund on world travel. Rather, using a part of it to fulfil the aspiration and investing the rest may prove wiser.
SAVE FOR YOUR CHILDREN
If you are getting married now, starting a family may be part of your plan. Education inflation is steeper than the average rate of inflation. You may face challenges in getting your child into a school and later getting admission to a college for higher education. Among the survey responde-nts, 52 per cent between the ages of 35-45, and 36 per cent between the ages of 28-34 said education (for self or children) was their biggest monthly expense. There is no sign that things will get easier on your wallet with time. Therefore, one of the things you can achieve with a frugal wedding is saving more for your child's future expenses. Flexing your financial muscles during your wedding is a personal choice. But exercising prudence in your 20s will go a long way in securing your future.
– The writer is CEO, BankBazaar.com
