Watch this to save money on your wedding | Money Psychology

Summary

In this script, a man is planning his wedding and seeks advice on managing expenses. He learns about 'Marry Now, Pay Later' (MNPL) loans, which are specialized for weddings and offer benefits like vendor connections and lower interest rates compared to regular loans. The conversation also covers financial tips, such as unbundling services to save on GST and considering wedding insurance for unforeseen cancellations. The groom-to-be is advised to be financially prudent, comparing loan terms and considering the impact on his personal finances.

Takeaways

• 💡 Consider the type of wedding you want before making financial decisions.
• 💰 Utilize savings wisely and explore options like 'Marry Now, Pay Later' (MNPL) for managing wedding expenses.
• 🏦 Be aware of the differences between MNPL and traditional bank loans, including interest rates, payment flexibility, and vendor connections.
• 🔍 When taking a loan, compare interest rates, prepayment penalties, payment frequency, and loan limits with standard personal loans.
• 💸 Avoid over leveraging by ensuring that loan EMIs are manageable against your income.
• 💳 Learn about tax-saving hacks such as bundling venue and catering to reduce GST from 18% to 5%.
• 🎁 Understand the tax implications of wedding gifts, including the non-taxable nature of most gifts and the documentation required for cash.
• 🏠 Be aware that receiving a property as a gift may not be taxable but is subject to stamp duty.
• 🌐 Explore wedding insurance for coverage against unforeseen events that could lead to cancellations or delays.
• ⏱️ Know the coverage period of wedding insurance, which typically extends a few days before and after the wedding event.

Q & A

What is the main topic of discussion in the script?

The main topic of discussion in the script is about planning a wedding and the financial aspects associated with it, including the concept of 'Marry Now, Pay Later' (MNPL) loans.

Why does the groom-to-be call the person in the script to the wedding location?

The groom-to-be calls the person to the wedding location to discuss wedding planning and to seek advice on how to save money and manage wedding expenses effectively.

What is the significance of the pink roses in the script?

The pink roses are significant because they were mistakenly ordered instead of red roses, which the groom had requested, highlighting the need for attention to detail in wedding planning.

What does the acronym 'MNPL' stand for in the context of the script?

In the context of the script, 'MNPL' stands for 'Marry Now, Pay Later', which is a type of loan specifically designed to help finance weddings.

How does the MNPL loan differ from a traditional bank loan according to the script?

The MNPL loan differs from a traditional bank loan in that it is specialized for wedding expenses, offers assistance in connecting with vendors and caterers, and may have more flexible payment terms and lower interest rates.

What are the four key points the person in the script suggests to consider when taking an MNPL loan?

The four key points suggested are: checking the interest rate, understanding the penalty for early payment, knowing the payment frequency and tenure, and verifying the actual loan limit sanctioned.

What is the 'bundling and unbundling of services' strategy mentioned in the script?

The 'bundling and unbundling of services' strategy is a financial hack where services like catering and venue are combined to reduce the GST rate from 18% to 5%, potentially saving a significant amount on the wedding bill.

How can wedding gifts impact the couple's finances according to the script?

According to the script, wedding gifts such as cash, stocks, bonds, gold, electronics, or even property are generally not taxable, which can help the couple financially without adding to their tax burden.

What is the purpose of wedding insurance as discussed in the script?

Wedding insurance, as discussed in the script, is intended to cover unforeseen events such as natural calamities, man-made events, or even pandemics like Covid-19, which could lead to wedding cancellations or postponements.

What is the potential cost of wedding insurance as a percentage of the total wedding budget?

The potential cost of wedding insurance is roughly between 0.2% to 0.4% of the total wedding budget, as mentioned in the script.

What is the timeframe that wedding insurance typically covers according to the script?

Wedding insurance typically covers a few days before the wedding, the wedding day itself, and up to the next day after the wedding, as discussed in the script.

Outlines

00:00

💒 Planning a Wedding on a Budget

The paragraph revolves around a man planning his wedding and seeking advice on how to save money without compromising on the quality of the event. He is considering an 'MNPL' (Marry Now, Pay Later) loan, which is a specialized loan for weddings that not only provides funds but also connects borrowers with vendors and caterers. The advice given includes comparing interest rates with personal loans, understanding the terms of prepayment penalties, knowing the payment frequency and tenure, and ensuring the loan covers the estimated expenses. The conversation also touches on the importance of personal finance management and not over-leveraging oneself with debt.

05:01

💡 Smart Wedding Cost Management

This paragraph discusses strategies for managing wedding costs effectively. It introduces the concept of 'unbundling and bundling of services' to save on GST. By combining catering and venue services under one bill, the GST can be reduced from 18% to 5%, leading to significant savings. The paragraph provides an example using an Excel sheet to illustrate how different billing strategies affect the total wedding cost. It also highlights the potential tax benefits of receiving gifts during the wedding, such as cash, stocks, or property, and the importance of depositing cash gifts into a bank account to avoid tax implications. Lastly, it mentions wedding insurance, which covers unforeseen events that might lead to cancellations, with a premium typically ranging from 0.2% to 0.4% of the total wedding cost.

10:02

📞 Unexpected Wedding Cancellation

The final paragraph takes a dramatic turn when the groom receives a call from his fiancée indicating a potential wedding cancellation. The groom is left in a state of shock and confusion, unsure of how to proceed with the wedding preparations that have been made. The conversation about wedding insurance and its coverage is abruptly interrupted by this personal crisis, highlighting the unpredictable nature of life events and the importance of having contingency plans in place.

Keywords

💡MNPL (Marry Now, Pay Later)

MNPL, or 'Marry Now, Pay Later,' is a financial concept introduced in the script as an alternative to traditional bank loans for financing weddings. It is a specialized loan designed to cover wedding-related expenses, with the unique feature of providing assistance in connecting with vendors and service providers. In the script, the groom-to-be mentions using MNPL to fund his wedding, highlighting its utility in managing the financial burden of a big event without immediate payment.

💡GST (Goods and Services Tax)

GST is a value-added tax levied on most goods and services sold for domestic consumption. In the context of the video, the script discusses the tax implications on wedding services. It is mentioned that combining catering and venue services under one bill can reduce the GST rate from 18% to 5%, which is a significant saving strategy for wedding planning. This illustrates the importance of understanding tax policies when budgeting for large expenses.

💡Bundling and Unbundling

Bundling and unbundling refer to the strategy of combining or separating services for financial or tax advantages. In the video, the concept is used to explain how wedding expenses can be strategically grouped to optimize GST savings. By bundling catering and venue services together, the couple can benefit from a lower tax rate, thus reducing the overall cost of the wedding.

💡Personal Loan

A personal loan is an unsecured form of loan offered by banks and financial institutions to individuals for various purposes, including weddings. In the script, it is contrasted with MNPL, highlighting the differences in terms of interest rates, flexibility, and the provision of additional services like vendor connections. The groom considers both options to finance his wedding, indicating the personal loan's role in large personal expenditures.

💡Interest Rate

The interest rate is the percentage of a loan that is charged as interest to the borrower by the lender. It is a critical factor when considering any form of loan, including MNPL. The script emphasizes the importance of comparing interest rates between different loan options to ensure the most cost-effective choice for the wedding expenses.

💡Prepayment Penalty

A prepayment penalty is a fee charged by a lender when the borrower pays off a loan earlier than the agreed terms. In the script, the groom is advised to inquire about any penalties for early repayment, which is a prudent step in financial planning to ensure flexibility without incurring additional costs.

💡EMI (Equated Monthly Installment)

EMI refers to the fixed monthly amount paid by borrowers to repay a loan, including both principal and interest. The script mentions the importance of considering the EMI in relation to one's salary to avoid overburdening oneself financially. It's a reminder of the need to balance monthly expenses with income when taking on debt.

💡Wedding Insurance

Wedding insurance is a type of event insurance that covers the costs associated with cancellations or postponements due to unforeseen events. In the video, it is presented as a safeguard against financial loss in case of natural disasters or other covered incidents that might disrupt the wedding. It's a relatively unknown but potentially valuable consideration for wedding planning.

💡Stamp Duty

Stamp duty is a tax levied on certain legal documents, including property transactions. In the script, it is mentioned in the context of receiving a property as a gift, where the recipient would be liable for stamp duty but not income tax. This highlights the different types of taxes and their implications on various forms of asset transfers.

💡Shagun

Shagun refers to the traditional Indian custom of gifting money or valuables to the bride and groom during a wedding. In the script, it is mentioned that such gifts are not taxable, provided they are deposited into a bank account to document their source. This illustrates the cultural practices and their intersection with financial and tax regulations.

Highlights

Mistake with flower order leads to a discussion about correcting it to red roses.

Unexpected guest questions the purpose of their presence at a wedding planning location.

The groom reveals his upcoming marriage and the need to plan amidst chaos.

A meeting is held at an unconventional location due to the groom's busy schedule.

The groom explains his choice of 'Marry Now, Pay Later' (MNPL) for wedding financing.

MNPL is differentiated from a traditional bank loan for its specialized wedding services.

The groom and his fiance have utilized all their savings for the wedding.

Advice on checking the interest rate and comparing it with personal loans.

Importance of understanding prepayment penalties and payment terms in loans.

The concept of unbundling and bundling services to save on GST during wedding planning.

Potential savings of 10-20% by smartly managing the billing of wedding services.

The tax implications of wedding gifts, including the non-taxability of most received gifts.

Details on the tax benefits of receiving a property as a wedding gift.

Introduction to the idea of wedding insurance and its coverage for unforeseen events.

The cost of wedding insurance is roughly 0.2 to 0.4% of the total wedding budget.

The groom receives a call from his fiance considering canceling the wedding.

Transcripts

It is supposed to come till here.

Till down here.

Who asked for these pink roses?

I said red roses.

Red rose.

What are you guys doing here?

Brother please pick that up & keep it inside.

Let's replace pink roses with red roses.

Perfect!

Yes!

Let's do this quick, we don't have enough time.

What are you doing?

Why have you called me here?

Hello sir.

Good afternoon, sir.

It's my marriage.

But why would you call me to a location?

We have a nice office. I'm getting married.

I have to plan.

We have a meeting, right?

Yes.

Let's do it here only.

Let's do it here. Yeah.

Just come with me.

Sir, I have to block decoration.

Internal decoration is left, I have to check on the catering team as well.

Okay, okay.

I was married nine years ago.

I've been through what you have been through.

And you have this marriage after one month, right?

Just remove this.

And you're probably spending a bomb over here, right?

You and your.

Ah, 50-50%.

And it's a big amount I'm sure, right?

It's a big indian wedding.

We can talk about some ways you can actually save some money

and get some mental peace without compromising on all these things that you want.

Quality same?

And to be honest, save some money.

And to be honest, even I did not know some of these things back then.

So at least you should do it.

It will take ten minutes.

Done, sir.

Done. Ready?

Let's do it.

Yes sir.

Maybe we can cover all of it in like four points.

Dude, what is this?

No one should see this.

So I think the first question you guys need to answer is what kind of wedding do you actually want?

Me and my fiance? Yeah.

So me and my fiance want a big fat indian wedding.

Right, okay okay!

We will do all that.

But this is going to cost a lot of money, right?

Yes sir.

We have utilized our savings, me and my fiance.

100 percent.

How are you managing it?

Sir, we have opted for MNPL with our savings.

MNPL?

What is that?

New cricket team?

Fancy term.

So it's marry now, pay later.

So I'm getting married right now.

I'll pay the amount later.

Are you serious?

Is someone scamming him?

No, it's a legit thing.

Okay, tell me about it.

Okay, so it's different from marriage loan.

Oh, sorry.

It's different from normal bank loan.

So hold on.

Okay.

You can marry now, but you can pay it later.

It's basically debt.

It's a loan.

It's a loan.

No, no.

Yes, it's a loan.

But they'll also help me in, you know, connecting with these vendors, caterers, decorators.

That's not going to happen with bank loan because they'll just give me the money and I'll have to utilize that.

So you're saying a personal loan is just a loan.

But an MNPL loan is specific for a marriage.

Marriage, yes.

And they'll help me with everything.

Connect me with the vendors and decorations.

So these guys know locations, videographers?

Yeah.

We have to tell them yes.

Oh, okay.

And what else?

Like, low interest rate as compared to the..

As compared to a normal bank loan, plus some flexibility in terms of payments.

And I think they have a very,

not very strict criteria in terms of credit score evaluation as compared to a normal loan process.

If you have a low credit score, they will give you the money?

No, no, no.

I don't think so.

But they don't have super hard checks is what I know.

Okay.

To be honest, we didn't have MNPL back then, but this sounds pretty good.

Good.

If the interest rate is low, sir, whether basically it's a loan.

Okay.

And it's a specialized loan for your marriage.

Correct.

Assuming the company and all you choose is correct.

I think four things you should check for sure.

And you should check in any loan.

You should check in the MNPL loan as well.

So the first thing is, what's the interest rate?

You should check.

No, you should check with the personal loans of normal banks to see whether it's actually lower or not.

I don't think you should be taking a loan anyway.

But this is a personal choice, so I won't comment on it.

It's fine.

Don't over leverage yourself, obviously.

So make sure the interest rate is actually lower.

Second, what's the penalty if you pay early, like a prepayment?

Oh, check the fine print.

Ask them if I pay a little early in case you get a bonus.

Not now, later, in case he gets a bonus.

Then you know you are able to prepay.

What's the penalty on that?

You should know that.

Third, how often are you paying and how long is the tenure?

You should know, what are the payment options?

What if you skip an EMI, etc.

I'll have to compare this with a normal loan?

You should compare with a normal loan

But you should also ask the rules of how this works.

And finally, what's the actual limit that you're sanctioned for?

You don't want the actual expense to be this much and the MNPL to cover only this much.

It has to cover a decent amount.

Oh, so I will have to give them a total estimate.

And obviously your last thing.

I hope you have your basic personal finance in order up there.

Right?

You can't be over leveraging yourself.

And what is the EMI for this compared to your entire salary?

It can't be too much.

Anyway, but this is an interesting thing to think about.

This has been noted.

The second thing is unbundling and bundling of services.

So this is actually a really cool hack.

So you're probably paying for venue and catering and photography.

Obviously, that's why I've taken the loan.

Okay, cool.

And there's obviously GST on everything, right?

So if you actually club catering and venue together,

you don't pay 18% GST, you pay 5% GST.

So that's actually pretty cool hack.

If you actually include catering and the venue in the same bill by the same person, then the GST is 5%.

But if you included something like, say, decoration and say, photography in it,

it will become 18% on the full bill.

So you save a lot, actually, because outflow is less.

Oh, I will just take my check with the with the manager here.

Not right now.

My time is more important.

Two more points.

Yes, we finished the two more points. Yes.

So I think if you unbundle it like this, overall, you can save, like, a decent amount from your total bill, right?

5% v/s 18%.

And catering is one of the largest costs, right?

Correct.

All that food, all that wastage.

Never mind.

Point number three.

So this means you can actually save ten to 20% on your total bill, because maybe,

what, 30, 40, 50% is follow this point.

Yeah.

Like, more than 40% would be catering in venue, right?

Right.

Unless you are doing it the Ambani way, where you have Justin Bieber coming.

This is not the only place, sir.

Entertainment will be more, but not the case.

Got it.

I did not understand, sir!

What?

Please explain it to me one more time.

I am your student.

I have excel sheet over here.

Excel sheet for everything.

Yes, of course.

Okay, so look at this over here.

You can see the bundling and unbundling of costs.

What that means is so let's talk about the big ticket items.

Okay?

We have the venue and catering.

So if you rent a venue by itself, without any catering, you'll have to pay 18% GST,

whether it's with hotel rooms or not.

So let's say we have case number one, where you don't bundle your expenses.

If everything is separate, the total costs ends up to this, 15.22 lakhs.

Now, let's look at case number two.

When you bundle and unbundle a little smartly, in this case,

you combine the venue and catering to get that 5% GST, while the rest, you know, like decor and

videography, etc. That will be taxed at 18%.

Just by doing this, your total expenses decrease a little bit to 14.96 lakhs.

And then we have case number three.

What most people do.

Most of the time, the venue providers will offer a package that includes everything.

Venue, catering, decor, videography.

But here's the catch.

You'll pay 18% GST on the whole package, which is much, much higher than just when you're in catering combo.

So in this scenario, the cost jumps to 16.52 lakhs.

So the comparison is simple.

16.52 lakhs v/s 14.96.

Of course, these expenses you save you can use somewhere you really want to.

Like maybe on your honeymoon.

So by being smart about how you bundle and unbundle these expenses,

you can actually save about 13% on GST payable.

In this example, that's about 1.56 lakhs saved.

Which is almost 10% of your entire wedding budget.

Let's get back to the episode to participate in Abhishek Ki Barat.

So you got it right?

Yeah, that's cool.

But you know what's cooler?

In your wedding or on your wedding day, you will get lots of gifts.

Obviously you'll also gift me no?

Yeah, I'll gift you a watch so that you come on time to the office.

Forget about that.

Around your wedding you will get gifts.

Right?

This could be stocks, bonds, cash, could be gold, could be electronics, could be a car.

All of these things that your friends gift you or people gift you is not taxable.

Just make sure if you get cash, deposit it in your bank account around the wedding day.

So you know it's proof that it's from Shagun.

Even though it's probably not a lot.

No, it'll be. It'll be. It'll be.

And then.

And then, you know, it's just not taxed.

Then there comes property.

Oh.

If someone gifts me a house?

If someone gives you a house, you actually don't pay tax on it.

But there is a catch.

Yeah, there is a catch.

The catch is that you'll pay stamp duty up to Rs. 50,000.

The house should be gifted to you by an unrelated party.

Unrelated party?

Someone who is not your relative.

Why would he give me a house?

I don't know.

I dont make these rules.

This is the income tax.

I get it. Okay.

And of course if you generate rent from that property, then you pay tax on it.

Oh sir, that I know! Why are you telling me that?

And then finally we have, the last point.

Wedding insurance.

Wedding insurance?

Where are we going?

I don't know.

Let's not go here.

Let's just go.

It's a good view.

So wedding insurance is basically if you have any cancellations due to unforeseen events,

then the wedding insurance basically covers it.

Where are you going?

I'm not sitting here.

So any unforeseen event that happens, like a cancellation due to, like, a man made event

or a natural calamity, and the wedding's not happening, the insurance comes into effect.

If there is a storm and destroys everything.

I'll get the money?

Yes.

Oh, that's interesting, sir.

I did not know.

Also, Covid. Right.

Like, Covid is a very good example.

And it basically costs.

Why do you want to do everything now?

Do it later.

0.2 to 0.4% of your total cost will roughly be the cost of the insurance.

That's the premium?

Yeah.

That's the premium you pay.

The 0.2% of the total budget is going to be the premium.

Roughly, yeah.

I'll just have to pay it once?

Yes, and in case of any natural calamity.

It's a good thing to have.

To be honest, I didn't even know that insurance existed until after we got married.

But it's a cool thing.

I think everyone should consider at least.

Oh, that's interesting.

I will talk to them.

I'll just tell my.

Sir, I have one question.

So what it doesn't cover?

So, I don't know, stuff like extreme pollution.

I mean, anyway, stuff like kidnapping, war, terrorism.

Stuff like that is not is not covered.

Oh.

So what's the term of this insurance plan?

So your wedding's a day.

I meant two days before or after?

It'll cover a few days before your wedding.

Let's say seven days.

And the day the wedding is over, up to the next day is till when this is actually coming.

That's interesting!

Are there any companies who does that?

I mean.

I mean, you know, dude, you have a phone.

You're intelligent.

Just google it.

Oh, sir, my fiance is calling me.

I'll give you privacy.

No, no, it's okay.

Hanji.

Cancel.

Wedding, what?

why?

Let's talk, hello.

Let's talk it out.

Hello?

She said.

Did she say cancel?

I heard.

Yeah.

She said she's not going to.

What are we supposed to do with this?

This is wrong.

Relax, relax.

What did she say?