How To Pay for Your Child’s Wedding Without Touching Your Retirement Savings
Weddings can be incredibly expensive events, made even more so by large guest lists, fancy venues and all the add-ons people often get to make their big day as special as possible. According to Zola, the average cost of a wedding in 2024 is about $33,000.
But location plays a major role in determining how expensive a wedding is. In Rhode Island, for example, couples spend closer to $49,000 on their wedding. In Alaska, meanwhile, the average cost is under $15,000.
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Whether your child’s wedding is on the more expensive side of the scale or not, the last thing you should be doing is paying for it with your retirement savings. After all, you want your kid’s big day to be memorable and brilliant, but you also want to be able to retire as planned.
If you’re planning to cover your child’s wedding expenses, here are some of the best ways to do so without touching your retirement savings.
Start a Dedicated Fund
You might have already started saving for your child’s college education, but if you haven’t created a dedicated wedding fund, you might want to do so now.
“Saving specifically for your child’s wedding early, with a dedicated savings account, is an effective strategy,” said Taylor Kovar, CFP, founder and CEO at 11 Financial. “By setting aside a portion of your monthly income, these funds can accumulate over time to cover wedding expenses without having to use personal savings.”
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Create a Budget
It’s easy to go overboard with spending when you don’t have a budget, so make one as soon as you can.
“My top piece of advice for parents paying for their kids’ weddings would be to set a budget yourself. The caveat there can then be that your kids can choose to stick within this budget and have their entire wedding covered, or they can take this sum of money as a gift to put toward the wedding and cover the rest themselves,” said Carter Seuthe, CEO of Credit Summit Consolidation.
Having a budget is a good way to set and maintain your financial boundaries and protect your other hard-earned assets for future use. Decide how much you’re comfortable with spending on the wedding, and make that a hard limit.
Automate Your Savings
Automating your savings contributions can help you stay on track as you set aside for your child’s future wedding. This is because you won’t have to think about when to transfer money into savings, nor will you have to worry about missing a month or two leading up to the wedding.
And as long as you’re putting your savings in a high-yield account, you can watch your money grow without having to do much else but wait. If you happen to receive a windfall of your own, or you’re able to save more money, you can always make additional contributions manually.
Liquidate Other Assets
Another way to cover your child’s wedding without touching your retirement savings is to turn to your other assets — specifically those you don’t absolutely need for retirement purposes.
“As someone with extensive financial experience in the events industry, I fully understand the desire for parents to contribute to their child’s dream wedding celebration. However, it’s crucial to strike a balance between supporting loved ones and safeguarding your own financial future and retirement plans,” said Misti Morningstar of Elevate Event Staffing.
“You could liquidate non-retirement assets like investments, property or use inheritance funds if available,” she continued. “Providing a monetary gift towards specific areas like the venue, catering or attire can also ease some of the burden.”
Some assets to consider liquidating include stocks, bonds and alternative investments.
Take Out a Loan
If you don’t have enough cash but still want to help out, you could consider a loan or a low-interest credit card. This could be particularly viable if you have good credit and qualify for low interest rates and good terms.
Some credit cards also come with a 0% introductory interest rate. If you pay off the balance in full before that introductory period ends, you could cover the wedding expenses without having to pay any interest at all.
Be cautious about relying on any form of financing, though. If you’re not careful, you could end up with a debt you weren’t prepared to pay. If that happens, you might end up with strained finances in the future, too.
Find Ways To Cut Costs
It’s your child’s wedding, so they should get everything they dream of. But that doesn’t mean you can’t make a few suggestions here and there.
“Suggest cost-cutting measures like an off-peak wedding date, shorter guest list or unique all-inclusive venues,” said Morningstar. You can even advise your child to have a longer engagement that gives both you and them more time to save up — and potentially receive financial gifts from other family members or guests.
Pay the Vendors Instead of Gifting Money
Gifting money could come with some tax repercussions, so be cautious about handing over a large chunk of cash.
“Check with your financial advisor, but you may be better off paying suppliers directly vs. gifting money to your child if it will exceed the annual gifting limits,” said Vijay Goel, co-owner of 440 Elm, a wedding and events venue. “There are multiple combinations depending on if you have a spouse and you want to gift to your future son or daughter in-law.”
Use Points or Rewards Programs
Do you have a credit card, or are you a loyalty member of a certain club, airline or hotel? If so, you might be able to use your rewards or points to help with wedding costs.
“If you have points at any major hotels or air[lines], those may be very helpful in offsetting expenses for wedding-related travel or the honeymoon,” said Goel.
Focus on the Celebration
Having a dream wedding is important, but it shouldn’t be more important than the family’s financial well-being and the future the joyous occasion marks.
“At the end of the day, focus on the matrimonial celebration itself over opulent spending. An intimate gathering centered on the union can be just as meaningful,” said Morningstar. “Open family discussions, setting realistic expectations from the start and careful planning prevent jeopardizing long-term financial well-being for one milestone event.”
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This article originally appeared on GOBankingRates.com: How To Pay for Your Child’s Wedding Without Touching Your Retirement Savings
