But if you want to give your child any assistance in financing a wedding, starting a wedding savings plan well in advance may help. That way, you might be able to avoid taking on debt or dipping into a retirement fund to pay for your child's nuptials. Here's what to consider as you start to put a plan in place to save for your child's wedding.
Remember What's Important
Financing your child's wedding is a gift, not a requirement. It may be easy to get caught up in giving your child a dream wedding by looking for creative ways to find the funds that are necessary. But tapping into your retirement account, home equity or credit cards to pay for the special day may not be the smartest move. Ultimately, the wedding is just a single day, while the marriage will last a lifetime. Consider helping the new couple get off on the right start by keeping the financial aspect of the wedding day in perspective.
If you're committed to paying for your child's wedding, your strategy for saving will likely depend on how far away the big day is. Here are some tips to consider as you make a plan:
- Budgeting ahead: The earlier you start setting money aside for your child's big day, the less you'll need to save each month. Consider figuring out how much you want to give to your child, and then divide that amount by the number of months between now and the big day. You may want to revisit your budget, cut back on unnecessary expenses and put this money toward the wedding.
- Savings accounts: If the wedding is already in the planning stages, then you might consider focusing on maintaining liquidity for when catering and venue deposits are due. A CD, savings account or money market account could help potentially grow your money while still giving you the flexibility you need to pay for wedding expenses as they arise.
- Investments: If you have a little more time before your child says "I do," you may be able to give up some flexibility in exchange for more growth. For instance, you could invest in mutual funds or even purchase individual stocks. It's important to remember, however, that no investment is guaranteed to increase in value and you may also lose your initial investment.
While paying for or contributing to your child's wedding is a wonderful gift, consider having a conversation with your child to help make sure you're on the same page around expectations. Start by laying out the details of what you will give to your child, whether that's a specific dollar amount, a percentage of the total cost or payments for specific costs. This conversation can be a great way to model good communication around finances to the couple ahead of their union.
You will likely also need to listen to your child's wedding expectations and preferences to help make sure no one's feelings are overlooked in the planning process. Listening to the engaged couple with an open mind and speaking openly about your hopes and ideas may help to prevent any unwanted friction. In the end, it's their special day, so it's important that they're heard every step of the way, even if you're helping with the cost.
The Bottom Line
Consider trying to get ahead of any stress about paying for your child's wedding by planning ahead, saving early and often, making savvy investment decisions, and clearly communicating your expectations. Building a strategy for how to save for a wedding ahead of time can help you focus on what's important: celebrating your child's next chapter in their life.