Wednesday, December 19, 2012

Do You Plan to Help Finance Your Childrens' Weddings?

Wedding Dress For Happy Couple in Love
Wedding Dress For Happy Couple in Love (Photo credit:

With the average wedding now costing $27,000, tying the knot has never been more expensive. Although over a third of couples are choosing to finance their big day completely themselves, many parents still wish to contribute to the cost. Even if there is no hint of a wedding in sight, if you have daughters in their teens or twenties – or sons for that matter - you may want to consider how you will save money to put towards their future wedding.

When to start saving

One thing that’s for sure is it’s never too soon to start saving; before you know it they’ll be grown up and engaged and it’s easier to put a little money away each month than to have to find extra money within the space of a year. It’s popular for parents to start a wedding fund after they've put their kids through college, as once this financial obstacle has been cleared you obviously have more available cash. However, this is not necessarily practical if you have a large family of widely varying ages, in which case you may have to juggle the two. Either way, the best course of action might be to participate in a dedicated regular saving scheme, looking at your current earnings and outgoings to determine a realistic amount that can be saved each month. If you do have a lump sum of money available to invest for the purpose you might wish to invest in a portfolio of bonds and stocks, which can potentially provide much greater returns; though there is inevitably an element of risk with these.

Don’t jeopardize your retirement

A couple of 14-carat gold wedding rings. Pictu...
A couple of 14-carat gold wedding rings. (Photo credit: Wikipedia)
While you want your daughter’s wedding day to be the best of her life, it’s important to be realistic about how much you can afford to contribute. It would be foolish to save for her wedding at the expense of your retirement; if you can’t give as much money as you would have liked, it doesn't mean you are letting them down and they’ll more than understand. Your children will be well aware of the current financial crisis and the negative impact this will have had on your savings accounts and pension plans. If your daughter is recently engaged, sit down with her and her fiancĂ© and explain how much money you are able to provide; this means they can plan a wedding within the budget they have available to them, rather than basing it around additional money that you can no longer afford to give. Remember after all that for the majority of weddings the costs are now split three ways between the bride’s family, the groom’s family and the couple themselves, so you should not feel under any undue pressure to foot the whole bill.

Avoid getting into debt

On a similar note to that above, don’t be tempted to get into debt to help finance a wedding. While this might seem like your only option if the prospect of a wedding is suddenly thrust upon you  and you have not had the chance to prepare specific savings, it’s important to keep in perspective that it’s only one day and not even your child’s wedding  is worth getting into debt over. It might seem easy enough to make a payment on a credit card or to take out a loan, but when you consider the interest rates you will be charged for the privilege of doing so, the money you owe will quickly mount up. You wouldn't want your children to get into debt in this way, so follow your own advice. Use the rule of thumb that you will only pay for what you can afford to do so in cash; by paying with cash you can also usually receive discounts on your purchases, with everyone from florists to photographers ready to do a deal with you.

Be aware of the true costs

Before generously offering to pay for a number of items relating to the wedding, be aware of exactly how much they will cost. It might be hard to believe, but the average wedding dress would set you back $1,355, photography now stands at $2,186 and wedding cakes cost almost $500, so that’s over $4,000 before you have even considered the cost of the venue, catering and hiring a car for the day. These figures are based on the findings of the 2012 American Wedding Survey; more details of which are available online and makes useful reading if you feel out of touch with how much it now costs to get married

However, don’t let your knowledge of the true cost sway you into upping the amount of money you decide to give your daughter and your son-in-law to be. Rather than offering to pay for specific items it is probably wiser to offer a set amount of money which they can spend as they see fit.

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