Broker Check
A Dreamy Day versus a Lifetime of Dreams

A Dreamy Day versus a Lifetime of Dreams

March 01, 2018

A Quick and Easy Guide to Wedding Budgets

Do you have children and grandchildren who are planning for a wedding? Are you planning for your own wedding? If so, read this before you do anything else - because weddings can be very expensive. Like any financial objective, it makes sense to plan and save in advance, if possible. The absence of planning often results in families borrowing against their homes or increasing credit card debt to pay for wedding expenses. It often results in withdrawing money from retirement plans and paying associated taxes and penalties. None of these is ideal.

For parents and grandparents who want to help their children pay wedding expenses, try to understand the impact of your commitment on your other goals. For example, a family who wants to pay for two weddings at $25,000 each could forfeit around $4,000/year in inflation adjusted retirement income over the course of their lifetime.* This is due to the fact that once money leaves your checking account, you lose the ability to grow that money over time using the magic of compounding. I’m not suggesting that you don’t help your loved ones; I am suggesting that you make the funding decision in the context of your other financial priorities. 

For the bride and groom, setting a wedding budget can be challenging. The cost of a day of dreams can impact the ability to achieve a lifetime of dreams. Weddings can cost tens of thousands of dollars. When you consider other financial priorities, such as paying down credit card and student debt, developing an emergency fund, purchasing a home, saving for retirement and college funding for future children, it makes careful financial planning  for a wedding all that more important.

Fortunately, you can use the trusted financial planning process to help. For many couples, this might be their first introduction to the financial planning process. And, it might even be their first introduction to addressing disagreements over financial priorities – the process helps with that, too. Here’s how it works:

Step 1: Determine the Goal

Brainstorm what you would like your wedding to look like. Make a list of everything that you want as part of your wedding. Next to each item, write down an estimated budget amount. There are several websites out there that can help with this; one many couples use is They have useful checklists and online budgeting tools. Please over estimate. I’ve never met anyone who told me their wedding came in under budget!

Step 2: Determine the Resources

The first part of this step is to determine if the bride and groom’s parents are going to participate. If so, determine how much they will contribute to the total cost of the wedding. The second part of this step is to determine if the parents planned contribution will cover 100% of the estimated costs. If not, the bride and groom need to determine how much of their personal funds they are willing to commit.

When deciding what personal funds can be committed, make sure you maintain a sufficient cash emergency fund. Also, if you are in debt, do not overcommit your personal funds so that you get behind a reasonable debt reduction schedule.

Step 3: Manage the Gap

Most likely, there still will be expenses that need to be covered. This is the point where the bride and groom should determine how much they can save each month prior to the wedding to cover the gap. For example, if the couple is short $2,400, and they have 12 months until the wedding, they would need to save $200/month. The best way to handle this is via a joint checking account with automatic monthly deposits.

Step 4: Prioritize

If there still is a gap, the bride and groom need to go through each item on their wedding checklist and prioritize each item. The objective is to eliminate items altogether or decrease the budget for items that aren’t high up on the priority list. This way, they will spend money on what is most important to them. For one couple, photos and videos may be more important than the venue. For another, flowers at the wedding may be more important than reception decorations. Here’s where you can really focus on what is important to you. Take turns prioritizing items – that way you both get a say. Repeat this step until there is no gap.

Hopefully, by the end of this process, you will have planned a wedding that excites everyone and can be purchased without anyone going into debt. How you handle these financial decisions will have a direct impact on your financial foundation and future financial goals. In other words, you should be able to have a dreamy day and still be able to make progress toward a lifetime of dreams!

What are you doing to help find success in your second half?


*Assumes $50,000 initial investment growing at 6%/year for 12 years until a hypothetical retirement age of 67. Approximate account value at that point is $100,000 which might generate about $4,000/year in inflation adjusted income. This is a hypothetical example and is not representative of any specific investment. Your results may vary.