Tips Every Parent Should Know before Contributing to Their Child’s Wedding

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By Dave Henderson, CFP, ChFC, CLU

In 2014, the average wedding cost $31,213 – no small sum.

The median cost is lower, but almost any way you slice it, weddings are expensive. And paying for them can be stressful.

Before you contribute any money towards your child’s wedding, read these tips to avoid matrimonial money mayhem. I know they worked for us.

And like great food and drink, these tips pair well together!

1. Don’t wreck your retirement to fund a wedding

Too often people think it’s important to put on a big show or spend a ton of money on a wedding when they’re already behind on their savings. And they’ll pull from retirement accounts, which can be a huge mistake.

Say you paid for an “average” $31,213 wedding. That might have grown to $75,000-100,000 over 15 years or more, if it remained invested.

Ask yourself – will the party be worth 2 or 3 times the amount you withdraw?

2. Be upfront about finances

Be honest about finances from the start with the bride and groom. Let them know where things stand, regardless if you’re making a large contribution or not. If possible, include the in-laws too.

Having an open dialogue helps avoid miscommunication and the accompanying hard feelings.

Traditionally, the bride’s parents paid most of the wedding costs, but today, it’s becoming more of a joint effort. And with more people marrying later in life, the bride and groom could possibly contribute. If they can, they should.

3. Create a budget and stick to it

It wouldn’t surprise me to find a correlation between wedding costs and heart trouble. But this tip practically eliminates planning-related financial stress.

Set a budget early and let the kids spend it as they wish. Most importantly, stick to the number! Then they can plan, and you can reduce your financial stress. 

My daughter knew exactly what we’d contribute from day one. Then they designed their wedding, funding extras themselves. For my wife and me, there was no conflict or stress.

4. Save early Most parents don’t start saving for weddings early because other financial obligations take precedence. This makes dipping into retirement savings seem like a viable option – but generally it’s not!

Start saving for a wedding early if you can. A little set aside regularly over time adds up.

And it’s OK to not fund a wedding if you can’t afford it, especially for parents with multiple children. It can be emotional, but remember tips 1-3!

5. Tap Cash Value Life Insurance

Cash value life insurance is a great source of funds for things like weddings and college because when you have money built up in a policy, you can borrow from it via the insurance company. 

Terms vary between carriers and policies, but usually, rates are competitive and generally your policy won’t lose value as long as the loan is fully paid back. And under current law, the loan is tax-free.

6. Even if you contribute, it’s not about you

While not necessarily a money-saving tip, it’s incredibly valuable to remember that it’s the kids’ wedding, even if you don’t like their choices with your money.

To keep things harmonious long after the nuptials (i.e., stay on good terms, see the grandkids), sometimes it’s best to butt out. Your contribution isn’t leverage to get your way.

Remember, something will go wrong on the special day. A great marriage is the goal, not the perfect wedding. Contribute to their great marriage!

7. HAVE FUN

It’s a special occasion for everyone involved so enjoy it!

Using these tips, you’ll lay the groundwork for a stress-free wedding day, so you can celebrate the happy couple and the guests as much as possible. 

What you don’t want to do as a parent is think about the thousands of dollars in accumulated debt or big hit to your retirement it took to make everything happen.

Conclusion

Of course, it’s best to start saving early for weddings. But even if you can’t or didn’t, the above tips can usher in matrimonial bliss without sending your finances into a tailspin.

Believe me, the more of these you adhere to, the smoother everything is likely go. My wife and I know from experience!

Securities and Advisory Services Offered Through Client One Securities, LLC Member FINRA/SIPC and an Investment Advisor.
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