You’ve decided to make that leap into marriage, but turning that wedding dream into reality takes a lot of careful thought and planning. You want to celebrate your marriage with a wedding that honors you as a couple, without mortgaging your souls to do so. Here are some things to think about when planning for that special day.
Paying for the wedding
The average wedding cost in the United States is more than $26,000. At these prices, and with couples already well into their careers and waiting longer to get married, many families are re-evaluating the old-time traditions of the bride’s family footing the majority of the wedding bill. With this in mind, you should think about what kind of wedding you want, how much are you willing to pay, and who will pay for it?
Nothing is off limits in terms of deciding how to pay for your wedding these days, especially when you’re weighing your (or your family’s) longer term financial priorities, like saving for retirement or a down payment for your first home. However you choose to pay for your wedding, make sure it’s true to you and keep everyone involved informed of what you’re doing and why. This will avoid hurt feelings and fights, which no one wants to experience while preparing for a wedding.
What to do with wedding gifts/money
Once you think about marriage, a natural next step is thinking about buying a home. This is where a parental (or grandparental) wedding gift can be especially meaningful. While you can be gifted any amount of money at any time, the gift giver must pay taxes on any amount over $14,000. But there are a few ways to receive more than this amount without providing a tax headache for the gift giver. For instance, each one of your parents can give you $14,000, which adds up to $28,000, per year. And because you are married, your spouse can also receive $28,000 per year. At the end of the day, that’s $56,000 to put toward a down payment – a not insignificant amount – that doesn’t require any IRS paperwork.
Paying for the honeymoon
The average cost of a honeymoon is $5,000, which can easily increase if you don’t plan ahead and stick to your budget. It’s easy to think that it’s an extra special trip because it’s your honeymoon and allow that to affect your decisions. But it’s important to set expectations around costs, such as hotels, airfare, activities and eating out while traveling. Having a candid conversation about what you can and can’t afford is so much better than having a fight because one of you booked a luxury scuba-diving adventure the other has no interest in.
Don’t forget there are myriad alternative methods that are out there that can help pay for wedding and honeymoon costs. Read our free Personal Capital Wedding Guide to learn more about how to plan for your wedding – and for your lives beyond the big day.
The Marriage Guide Series:
- Living Happily Ever After: Finances After the Wedding
- Financial Considerations Before Saying “I Do”
- Guide: Marriage, Weddings and Money
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Amin Dabit, CFP®Amin Dabit is the Director of Advisor Services with Personal Capital. Along with the EVP of Advisory, Amin helps lead Personal Capital’s financial planning experience and advice. Amin brings over a dozen years of experience in private wealth management and financial planning. Amin works with the advisory team to identify and establish strategies for reaching clients' financial goals by providing comprehensive, customized financial advice designed to improve their financial lives.