These days, the cost of a wedding can be mind boggling. Weddings are more expensive than ever before. Whether you plan to pick up the entire tab for the big day or are sharing the costs with your daughter or son and their soon-to-be in-laws, having a sound budget in place will help keep it from getting out of control.
Everyone thinks being a bride or groom is stressful. But what about being his or her parent? Paying for a big event like a wedding can seem prohibitively expensive. But with a little planning and forethought, you can help give your son or daughter a memorable wedding without breaking the bank.
Save for the special day
It’s never too early to begin thinking about saving for your child’s wedding. If you start before the teenage years, you could consider higher growth potential investments like stocks or mutual funds. If you’re saving closer to the wedding date, a money market account may be more appropriate. A word to the wise though: Saving for a wedding is an admirable goal, but may need to be prioritized after college and retirement savings.
Don’t offer what you don’t have
Let’s say you want to give your son or daughter $10,000 for the wedding. You may have $10,000 stashed away in stocks, but what’ll you do if the market takes a significant downturn before you cash out? Consider offering what you have in cash, a savings account or in a certificate of deposit instead.
Don’t dip into your retirement savings
If you withdraw money from your retirement account before you’re 59½, you’ll face a 10% penalty on top of the taxes you’ll pay. And you might not be able to replenish your account, which may really set you back. You may think you’re doing your child a huge favor by making the sacrifice now, but think about how she might feel if she has to start helping you with your living expenses later in life.
Talk about it
The economic downturn hit many Americans hard. And for some parents, the costs of a wedding are more than they can handle. If that’s the case, it’s best to talk openly and honestly with your children about it. It’s not worth going into a lifetime of debt for the sake of one day.
We’re not wedding planners, but we’re here to help
At Voya Financial Advisors, we will be happy to talk to you about savings and the other financial factors involved in planning your child’s wedding. Give us a call.
This material is provided for general and educational purposes only; it is not intended to provide legal, tax or investment advice. All investments are subject to risk. We recommend that you consult an independent legal or financial advisor for specific advice about your individual situation.
The information herein is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.
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