Budgeting for a wedding
The average wedding costs $32,641, according to a 2015 survey by wedding magazine The Knot. If you’ll be paying for nuptials soon, consider these steps to ease the budget stress and balance wedding dreams with financial realities.
Start saving right away
Whether the big day is a few months or a few years away, it’s smart to stockpile cash for it as soon as you can. If you have a longer time frame before you’ll need to pay the florist and the caterer, consider ways to save that also provide some growth potential. For example, money market savings accounts tend to have higher interest rates than regular savings accounts. Bank of America’s savings goal calculator can help you figure out a time frame and savings plan.
You could also devote the savings account to your future goals and expenses as a couple. If you don’t end up using all of your wedding fund, you can put it toward something else, such as a honeymoon or a down payment on a home.
Discuss contributions and expectations
It’s important to have honest conversations with everyone who will help pay for your wedding. Find out how much each party can contribute and whether that money comes with strings attached—for instance, parents may have a certain number of guests they’d like to invite. Some contributors might want to cover certain costs, like the wedding dress, while others may offer a lump sum. Settling these details early can help you avoid misunderstandings later. Once everyone has talked, you should have a clear idea about how much you can spend.
Create a detailed budget
Creating a budget is a great way to help keep your costs under control. You can begin by learning more about the real costs of a wedding, from the ceremony to the celebration.
Then, set up a budget that includes all categories of expenses to help reduce surprises heading into the big day. Don’t forget about things like pre-wedding parties or showers.
A number of online wedding tools let you play with your budget and see what couples in the area typically spend. From there, you can prioritize what’s most important. Figure out where you might be willing to compromise and where you don’t mind spending a bit more. For example, you might choose to make your own centerpieces so you can afford your favorite band.
Consider cost-cutting measures
Experts say the easiest way to reduce costs is to cut your guest list. This can have a trickle-down effect, allowing you to pay less for everything from catering to favors. Renting a venue for any day other than Saturday is often less expensive, as is considering a location outside a metropolitan area.
Don’t forget about happily ever after
Resist the temptation to dip into retirement savings to pay for your wedding. Not only are you likely to incur an additional tax from an early distribution but you also lose out on interest and earnings the money could accrue. Instead use flexibility and ingenuity to plan a celebration you’ll never forget.
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